Stocks on the move: Chr. Hansen up 11%, Philips down 11%
Shares in Danish life sciences company Chr. Hansen rose more than 11% in early trade after a robust quarterly earnings report and promising outlook.
At the bottom of the Stoxx 600, Philips shares plummeted more than 11% after the Dutch health-tech company issued a third-quarter profit warning and a 1.3 million euro ($1.26 billion) charge for its struggling sleep – and ventilation business had highlighted.
-Elliot Smith
The British pound hits after mixed reports from the Bank of England
UK economy shrinks 0.3% in August
Britain’s GDP contracted 0.3% mom in August, the Office for National Statistics said on Wednesday, below expectations of stagnation in a Portal poll of economists.
The drop in activity was partly due to production weakness and maintenance work at oil and gas assets in the North Sea, the ONS said, while both manufacturing and service activities fell.
July GDP growth has been revised down to 0.1% from a previous estimate of 0.2%.
“While this figure is not what the country would like to see, it will not significantly change the path we are already on. The Bank of England (BoE) will continue to raise interest rates to tame flight inflation,” said Marcus Brookes, chief investment officer at Quilter Investors.
“The BoE continues to face the incredibly difficult task of guiding the country through this uncertain period as it finds itself in a difficult phase by raising interest rates to counter inflation but embarking on a government bond-buying operation, to stabilize the markets after the turmoil triggered by the mini-budget.”
-Elliot Smith
CNBC Pro: It’s too early to buy the dip, says investor, listing 8 stocks to buy when the time is right
A fund manager is warning against buying the dip even as the S&P 500 is down 25% this year.
Instead, investors should switch to interest-rate sensitive stocks, said John Ricciardi, head of asset allocation and fund manager at Deuterium Capital.
He names three stocks in the consumer staples, three in utilities and two in materials sectors that investors can buy when the time is right.
CNBC Pro subscribers can read more here.
US economy is doing well despite economic uncertainty, says Treasury Secretary Yellen
Treasury Secretary Janet Yellen said the US is doing “very well” amid global economic uncertainty.
Although the US economy has slowed after a strong rebound, jobs reports point to a resilient economy, she said in an interview with CNBC’s Sara Eisen on Tuesday.
She also acknowledged that inflation is too high and that bringing it down is a priority for the Biden administration, stressing the importance of maintaining a healthy labor market while doing so.
— Chelsey Cox, Tanaya Macheel
The IMF lowers the global growth forecast for the next year
CNBC Pro: This stock is a better pick than even US Treasuries, the fund manager says
Nick Griffin, chief investment officer at Munro Partners, is so bullish on a stock that he says it’s a better bet than Treasuries.
“It’s cheaper than a US Treasury. It’s growing faster than the US Treasury and it probably has a better balance sheet than the US Treasury. So from our point of view it’s a pretty safe place [put your] cash,” he said. Short-dated US Treasuries have become increasingly popular with investors of late as yields have skyrocketed.
CNBC Pro subscribers can read more here.
— Wheat Tan
Wed Aug 17 2022 12:29 PM EDT
European Markets: Here are the opening calls
European markets are poised for a lower open on Wednesday, with global growth concerns dominating sentiment and investors eyeing Thursday’s inflation data from the US
According to data from IG, the UK FTSE index is expected to open 22 points lower at 6,867, Germany’s DAX down 56 points at 12,148, France’s CAC down 27 points at 5,799 and Italy’s FTSE MIB down 127 points at 20,511.
On Tuesday, the International Monetary Fund lowered its global growth forecast for next year to 2.7%. The forecast is 0.2 percentage points below the July forecast and suggests that 2023 will feel like a recession for millions around the world.
European markets closed lower on Tuesday, with all major exchanges and the majority of sectors ending the trading session lower. The region’s markets have endured consecutive days of losses as volatility continues to shake sentiment.
The Bank of England intervened again on Tuesday to restore order to UK markets, citing volatility in long-dated government bonds as what it called a “key risk to UK financial stability”.
— Holly Ellyatt