European markets improved, and the Stoxx 600 closed up 1.7%
Europe Stokes 600 The index temporarily ended the session up 1.7%, with retail stocks advancing gains of 2.8%.
The rise came in part from sportswear brands including Puma and Adidas, which topped European stocks with gains of 9.5% and 6.8%, respectively.
Those earnings were boosted by better-than-expected second-quarter Nike earnings, with US stocks jumping 13%, as the company fueled hopes that big corporate earnings might weather the upcoming recession reasonably well.
France’s CAC 40 rose 2%, Britain’s FTSE 100 rose 1.7%, and Germany’s DAX rose 1.5%.
– Jenny Reed
Stocks open higher, and the Dow is up 300 points
Stocks opened higher on Wednesday.
The Dow Jones Industrial Average rose 303 points, or 0.92%. The S&P 500 jumped 0.66% and the Nasdaq Composite climbed 0.35%.
– Samantha Sobin
Prime Minister Viktor Orban said Hungary must avoid a recession next year
Hungarian Prime Minister Viktor Orban said on Wednesday that the country must avoid a recession next year and bring inflation down to single digits by the end of 2023.
According to Reuters, the head of state told a press briefing that Hungary will likely face an energy bill of between 17 billion and 20 billion euros ($18 billion to $21 billion) next year. He added that his government would be able to raise funds to cover these expenses.
Orban said it would not be necessary to contact the International Monetary Fund for additional funding.
The Hungarian economy is facing a slowdown and currently has the highest central bank interest rates in Europe at 23.1%. The annual inflation rate is expected to rise to between 26% and 27% in the coming months, Reuters reported.
– Hannah Ward Glinton
UK retail sales unexpectedly rose in December
British retailers reported an increase in sales year-on-year in December, but expect purchases to fall again in 2023, according to a survey by the Confederation of British Industry.
Retailers and a Reuters poll of economists expected demand to decline year-on-year this month as a result of the cost-of-living crisis in the UK.
The CBI Trade Index rose to +11 in December from -19 in November, well above the -21 estimated by retailers. Forecasts indicate that the month of January will witness a decline in the balance of sales to -17.
– Hannah Ward Glinton
Corporate debt and good quality gold is where you want to be next year, the analyst says.
High-quality corporate debt and gold is where it wants to be next year, according to Michael Hoyle, CEO of CrossBorder Capital.
Hoel also said the US Federal Reserve may focus on liquidity before it does so on “Squawk Box Europe” interest rates on Wednesday.
Stocks on the move: Uniper stock rose 4.7% as the EU approved the government’s bailout
Shares of energy giant Uniper were up 4.7% at 10:30 a.m. London time, after shareholders approved the German government’s bailout Monday.
The European Commission approved the plan on Tuesday. Reuters reported that the move has already cost Berlin 50 billion euros ($53 billion) and will include up to 34.5 billion euros ($36.60 billion) in additional cash injections until 2024.
The company warned that it would face collapse if no deal was reached and that shareholders could be left with nothing.
As Germany’s largest importer of Russian gas, Uniper has been stabilised by high market prices and a sharp disruption in deliveries this year.
Among the many bailout terms, the company must divest its 84% stake in Russia’s Unipro, the German provincial heating arm, and parts of its North American energy business, all by 2026.
“Uniper has been stabilized,” said CEO Klaus-Dieter Mobach. “We will do everything we can to find the best owners for the assets and businesses to sell.”
Germany should also have an exit strategy by the end of next year and seek to reduce its stake to no more than 25% plus one share by the end of 2028.
Despite the uptick in recent news, Uniper’s share price is still down more than 90% in the year to date.
Sportswear brands post gains after Nike results
Shares of European sportswear brands gained after Nike beat its latest earnings estimates.
Puma topped the pan-European Stoxx with a gain of 7.4%, followed by JD Sports and Adidas, which gained 7% and 6.6%, respectively.
Nike shares rose more than 9% in after-hours trading in the United States after the activewear maker reported stronger-than-expected revenue and earnings.
– Hannah Ward Glinton
CNBC Pro: Fund manager says recession is “imminent” — and names cheap stocks to play with
Market watchers are increasingly concerned about a looming recession, and fund manager Stephen Glass is no exception.
Against that backdrop, he says he’s focused on dividend-paying companies that trade at attractive valuations.
His picks include Big Tech which he said is “very cheap” with a “huge margin”.
Professional subscribers can read more here.
– Xavier Ong
Expect a more challenging environment ahead, Atlantic Equities says
Atlantic Equities analysts expect a more challenging backdrop for the global consumer in 2023.
“Inflation may have peaked on a headline basis but input costs remain high and companies will look to hold out at least if they don’t take in more pricing in some cases,” analyst Edward Lewis said in a note on Tuesday. “This could become more challenging as resilience levels begin to normalize as US retailers begin to unwind prices, in line with where European peers have been all year.”
He highlighted Coca-Cola and Pepsi as some of his favorite consumer picks, noting “category momentum, continued investment and strong execution underpinning high growth.”
— Tanaya Machel
The stock market has fallen over $11.7 trillion so far this year
It’s been a tough year for stocks, which are currently in a bear market and down so far.
From the market’s annual high on Jan. 3 through this morning, US stocks have shed more than $11.7 trillion in market value, according to data from Bespoke Group.
“The maximum withdrawal was $13.6 trillion at the low of 9/30, so we have seen the market cap increase by just under $2 trillion since then,” analysts wrote on Tuesday. “In terms of the dollar, this downturn was sharper than anything investors have ever seen. That’s quite a downturn if you ask us!”
Of the $11.7 trillion, more than $5 trillion in losses comes from just five companies – Apple, Microsoft, Amazon, Alphabet, Meta and Tesla.
– Carmen Renick
European Markets: Here are the opening calls
European markets are heading for a higher open on Wednesday, reversing the negative trend of the previous session.
United kingdom FTSE 100 index The index is expected to open up 23 points at 7389, the German Dax 99 points higher at 13,969 in France kk Up 34 points at 6478 and Italy FTSE MIB Up 137 points at 23,830, according to IG data.
There are no major earnings or data releases.
– Holly Ellytt
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