US stocks jump on inflation report
US stocks opened higher on Tuesday, boosted by another report suggesting inflation may be slowing.
The Dow Jones Industrial Average rose 1% in early trade while the S&P 500 rose 1.7%. The Nasdaq Composite also jumped 2.6%.
The product price index, a measure of wholesale inflation, rose 0.2% in the month, compared with the consensus estimate of a 0.4% increase according to Dow Jones.
The producer price index in October rises less than expected
The producer price index, a measure of wholesale inflation, rose 0.2% on a monthly basis in October. Economists polled by Dow Jones had expected a 0.4% rise.
The report comes less than a week after a consumer price index report also showed a smaller-than-expected rise, fueling optimism that inflation may ease.
— Jeff Cox
German investor sentiment jumps on hopes of peak inflation
The ZEW Institute for Economic Research said on Tuesday its economic sentiment index rose to -36.7 in November from -59.2 in October, well above the Reuters consensus projection of -50.0.
The improvement in German investor morale, although the outlook remains negative, is likely the result of hopes that inflation rates will soon begin to fall from their record highs in the eurozone, ZEW President Achim Wambach said.
“In this case, policymakers would not have to hold back monetary policy as strongly and/or for as long as feared.”
– Elliot Smith
Stocks on the move: Teleperformance up 8%, Ambu down 17%
Shares of French call center company Teleperformance rose more than 8% by mid-afternoon to lead the Stoxx 600 after Citigroup upgraded the stock to “buy” from “neutral.”
At the bottom of the index, Danish healthcare equipment company Ambu fell more than 17% after reporting a quarterly loss.
– Elliot Smith
Our structural growth depends on two mega trends, says Infineon’s financial director
Sven Schneider, CFO of Infineon, talks about decarbonization and digitalization.
The UK labor market cooled slightly in the third quarter
The UK’s tight labor market cooled slightly in the third quarter as the economy contracted.
Unemployment stood at 3.6% in the three months ending in September, down from a nearly five-decade low of 3.5% recorded between June and August.
Figures from the Office for National Statistics show that the number of people employed on payrolls rose by 74,000 in October to an all-time high of 29.8 million, although the number of unemployed rose slightly during the month.
Job vacancies fell for the fourth straight quarter, but remained at historically high levels, while wage growth picked up, signaling continued inflationary pressures.
Daniel Mahoney, UK economist at Handelsbanken, said the latest figures underlined that the UK labor market remained a “headache” for policymakers.
“The rise in inactivity rates is a particularly worrying issue given that it has been seen much more strongly in the UK compared to many G7 peers. This goes some way to explaining why the UK’s economic performance has been weak post-pandemic, with its GDP still below pre-pandemic levels crisis,” Mahoney said.
“Rising inactivity has also fed inflationary pressures as it has contributed to employers too often struggling to hire staff. As the UK moves into recession, the Bank of England now has to strike a difficult balance between curbing any signs of domestic inflationary pressures and ensuring that the downturn is unnecessarily prolonged. “
– Elliot Smith
Stocks on the move: Teleperformance up 5%, Ambu down 11%
Shares of a French call center company Teleperformance rose more than 5% to lead the Stoxx 600 after Citigroup upgraded the stock to “buy” from “neutral.”
At the bottom of the index is a Danish healthcare equipment company Ambu fell more than 11% after posting a quarterly loss.
– Elliot Smith
Credit Suisse is selling most of its securitized products business to Apollo as it accelerates restructuring
Credit Suisse announced on Tuesday that it would accelerate the restructuring of its investment bank by selling a significant portion of its securitized products group (SPG) to Apollo Global Management.
Credit Suisse said the transaction, along with the potential sale of other assets to third-party investors, is expected to reduce SPG’s assets from about $75 billion to $20 billion.
The bank said the move represents “an important step towards a managed exit from the Securitized Products business, which is expected to significantly reduce the investment bank’s risk and free up capital to invest in Credit Suisse’s core business.”
Read the whole story here.
– Elliot Smith
China’s industrial production and retail sales missed expectations in October
China’s industrial production rose 5% in the month of October compared to last year, slowing from the 6.3% growth recorded in September. The latest figure misses estimates of 5.2 percent growth predicted in a Reuters poll.
Separately, retail sales in China fell 0.5% in October from a year earlier, which was not expected.
Analysts polled by Reuters had expected a 1% increase, with retail sales rising 2.5% in September.
— Abigail Ng
CNBC Pro: China eases its Covid measures. Here’s how market professionals play it
Which Stocks Could Benefit If China Reverses Its Zero Covid Policy? Market professionals reveal how to play the reopening as China relaxes some of its virus controls.
Pro subscribers can read more here.
— Zavier Ong
CNBC Pro: Morningstar’s chief strategist says stocks are 15% undervalued and shares 6 favorites
With many stocks in a bear market, the stock could be undervalued by 15%, according to Morningstar.
The US equity research firm’s chief strategist believes that the headwinds that were present at the beginning of the year will begin to recede early next year and favor stocks.
Dave Sekera also shared his “fair value” estimates for six companies with “broad economic moats” that will outperform in such an economic environment.
CNBC Pro subscribers can read more here.
— Ganesh Rao
European markets: Here are the opening calls
European markets are set to open in mixed territory on Tuesday.
Britain’s FTSE is expected to open 14 points lower at 7,374, Germany’s DAX down 6 points to 14,312, France’s CAC up 10 points to 6,617 and Italy’s FTSE MIB down 19 points to 24,464, according to IG data.
Global markets will follow events at the Group of 20 summit in Bali, Indonesia, which begins on Tuesday.
The latest IEA report on the oil market is due to be released, as well as the earnings of Infineon and Vodafone.