European markets muted but mark sixth week of gains
Europe’s Stoxx 600 index closed flat on Friday, capping an upbeat week that saw it break a three-month high and secure a sixth week of gains.
Major German and French stock exchanges were flat, with Britain’s FTSE 100 gaining 0.3%.
Expectations of a slowdown in Federal Reserve rate hikes and economic data suggesting that the next recessions in Germany and the wider eurozone could be shallow encouraged markets.
This is despite the negative performance of stocks such as Credit Suisse, which is facing major restructuring after several scandals.
Stocks open little change ahead of short trading day
Stocks opened little change on Friday ahead of the short day of trading as Wall Street looks to close out a winning holiday week.
The Dow Jones Industrial Average rose 19 points, or 0.09%. The S&P 500 lost 0.03% and the Nasdaq Composite slid 0.48%, weighed down by shares of Activision Blizzard, which fell nearly 4% on news that the FTC could block Microsoft from resuming the game company.
Credit Suisse shares down more than 5% to all-time low
Swiss credit shares fell more than 5% on Friday to an all-time low of 3.37 Swiss francs ($3.55).
The struggling Swiss lender has seen its shares continue to fall despite securing more than $4 billion in funding from investors, including the Saudi National Bank, to shore up its financial position.
Credit Suisse is carrying out its second strategic overhaul in less than a year as it seeks to address persistent underperformance at its investment bank and a string of risk management and compliance failures , which have burdened the bank with substantial legal costs.
Investor fear of missing the upside is back, analyst says
Emmanuel Cau, head of European equity strategy at Barclays, speaks to CNBC’s “Squawk Box Europe.”
We’re still positive on the UK, but it’s headed for a deep recession, says chief economist
The UK is heading for a deeper recession than Europe and the US, according to Rupert Thompson, chief economist at investment firm Kingswood.
Black Friday deals match 2021 so far, Barclaycard says
Black Friday card transaction volume is in line with 2021 levels, according to data from Barclaycard Payments.
The data covered purchases up to 10am London time made through Barclaycard Payments, which processes £1 of every £3 spent on debit and credit cards in the UK.
Investors are watching the annual shopping extravaganza closely to see how inflation and cost-of-living woes are impacting consumer spending.
German yield curve inversion hits new 30-year high
The German yield curve has reached its deepest inversion since 1992, Reuters reported, citing data from Refinitiv.
The spread between 2-year and 10-year government bond yields was -27 basis points on Thursday evening and -26 basis points on Friday.
Many economists consider an inverted yield curve a precursor to a recession.
There is a broad consensus among analysts that Germany is headed for a recession, although Friday’s final GDP reading for the third quarter showed growth of 0.4% quarter-on-quarter and 1 .3% on an annual basis, fueling the hope that it will be superficial.
Eurozone PMI data for November, showing a moderation in the slowdown in business activity, also bolstered cautious optimism.
German GDP growth raises hopes of a more moderate recession
German GDP figures show the country’s economy grew slightly more in the third quarter than expected thanks to consumer spending.
Europe’s largest economy grew 0.4% from the second quarter and 1.3% year-on-year, according to the Federal Statistics Office.
Germany is expected to enter a recession, but data suggests it may not be as severe as initially expected.
Stocks on the move: UK homebuilders down on first-time buyers survey, Rockwool up 4%
UK homebuilder stocks Taylor Wimpey, Bell and Khaki all fell more than 2% in early trading after a survey showed first-time British buyers increasingly favor rental properties.
Top of the Stoxx 600, Danish manufacturer of mineral wool products Rockwool International gained 4% after Morgan Stanley raised its price target for the stock.
Here are the opening calls
Great Britain FTSE100 is seen about 2 points higher at 7,467, Germany DAX should add around 8 points to 14,548 and France CAC 40 is expected to slip about 6 points to 6,701.
CNBC Pro: Asset manager names two stocks for sale as UK commercial property turns ‘toxic’
The UK commercial property sector is in a “toxic environment” for investors, according to the chief investment officer of Plurimi Wealth.
Patrick Armstrong told CNBC’s Pro Talks that the real estate sector is “sensitive” to rising interest rates, which he says will drive down property values and stock prices.
He revealed two stocks he was betting against in the sector by shorting their shares.
CNBC Pro subscribers can learn more here.
CNBC Pro: Outperforming asset manager picks stocks that should gain as margins tighten
Patrick Armstrong, chief investment officer at Plurimi Wealth, believes that margin squeeze is the “biggest risk” for stocks. But he thinks some stocks could beat the trend.
“Own sectors with defensible margins or that create margin compression elsewhere,” he added, naming his favorite sectors and stocks.
Pro subscribers can learn more here.
— Zavier Ong
CNBC Pro: UBS says recession in 2023 will be an inch deep but a mile wide — and that’s not factored into stocks
Global economic conditions will change next year and that will change which markets and sectors are underperforming, according to UBS Investment Bank’s chief strategist.
“It’s an inch deep but it’s a mile wide,” he said of the expected recession. “Global growth is 2% and that’s not factored into stocks,” Bhanu Baweja told CNBC’s “Squawk Box Europe” on Wednesday.
He also named the sectors he expects to outperform next year.
CNBC Pro subscribers can learn more here.
— Jenny Reid
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