Stocks in motion: ING up 8%, Rational down 12%
Dutch banking and financial services company ING Group rose 8% in afternoon trading, following the launch of a share buyback plan worth 1.5 billion euros.
Meanwhile, the German home appliance maker Rational fell 12% after reporting its third-quarter financial results on Thursday.
— Karen Gilchrist
US stocks open lower
U.S. stocks opened lower on Thursday after the Federal Reserve announced another interest rate hike and dashed hopes of a pivot to a looser tightening stance.
The Dow Jones Industrial Average was down 0.9% in early trades, while the S&P 500 was down 1.2%. The Nasdaq Composite also traded down 1.4%.
— Karen Gilchrist
Bank of England raises interest rate by 75 basis points, biggest hike in 33 years
Buses pass through the City of London financial district outside the Royal Exchange near the Bank of England on July 2, 2021 in London, United Kingdom.
Mike Kemp | In pictures | Getty Images
The Bank of England raised interest rates by 75 basis points on Thursday, its biggest hike since 1989, but adopted a dovish tone as policymakers sought to temper market expectations for further aggressive tightening. Monetary Policy.
The 75 basis point increase takes the Bank Rate to 3%, its eighth straight hike in the main policy rate, after the Monetary Policy Committee voted 7-2 in favor. One member voted for an increase of 0.5 percentage points while another preferred an increase of 0.25.
“The majority of the Committee believes that, if the economy evolves broadly in line with the latest projections in the Monetary Policy Report, further increases in the Bank Rate may be necessary for a sustained return of inflation to target, although than at a lower peak than expected in financial markets,” the MPC said, offering unusually market-specific guidance.
Read the full story here.
ECB’s Centeno says majority of rate hikes already done
European Central Bank policymaker Mario Centeno told Portuguese newspaper Publico on Thursday that much of the euro zone’s interest rate hikes had already been made.
The ECB has raised rates by a total of 200 basis points in its past three monetary policy meetings as it seeks to contain record inflation, which is expected to peak in the fourth quarter.
Stocks in motion: Netcompany up 16%, RS Group down 10%
Netcompany shares soared more than 16% in early trade to top the Stoxx 600 after the Danish IT consultancy reported strong third-quarter results.
At the bottom of the European blue chip index, shares of the British industrial distributor RS Group fell 10% after the company’s half-year report and the announcement that its CEO will take a leave of absence.
The crisis is over for the pound, but analysts predict further weakness ahead
The pound is on stronger footing since the appointment of new Prime Minister Rishi Sunak, but Wall Street sees even greater vulnerability over the next 12 months.
In a note on Monday, Deutsche Bank Vice Chairman and FX strategist Shreyas Gopal said the “crisis” chapter on the UK could now be closed, with the pound now likely to trade as a currency. “normal”, but noted that the downward pressure from large external financing needs and low real rates remain.
Read the full story here.
Refinitiv data shows 2-year US Treasury yield briefly above 5.1%
Data from Refinitiv showed that the 2-year US Treasury yield briefly rose above 5.1% during the afternoon session in Asia. It last stood at 4.6804%.
The reason for the spike was not immediately clear.
The 10-year Treasury yield rose during US hours after Fed Chairman Jerome Powell said the terminal rate would still be higher than expected – and last stood at 4.1448% .
The 30-year Treasury yield was also higher at 4.1908%.
Yields move inversely to prices and 1 basis point equals 0.01%.
– Jihye Lee
Investors should remain wary of unverified ratings on China reopening: Credit Suisse
Investors should “stay cautious” of unverified notes circulating on social media hinting at a possible reopening of China early next year, a Credit Suisse strategist has said.
“I think, judging from different angles with a lot of news feeds – especially unverified ones, we have to be careful,” said Edmond Huang, head of China securities research at Credit Suisse. .
Speaking at the company’s China investment conference, Huang said it’s more likely to be a measured process of reopening than an abrupt process.
“It will take time, especially after the party congress and the formation of the new government – which means it will be a more gradual process than overnight, with China fully reopening to the rest of the world,” did he declare.
JPMorgan Asset Management predicts lower Fed hike in December
JPMorgan Asset Management expects the Federal Reserve to raise rates by 50 basis points in December, according to a note.
APAC chief market strategist Tai Hui said the Fed may take a more moderate course in the near future.
“If underlying inflation declines by the end of the year, the Fed could opt for a more moderate rate path and avoid plunging the economy into a recession,” he said in the statement. note.
“We believe there is some easing in inflation on the horizon,” he said, adding that the Fed’s tightening cycle is likely to extend into the second quarter of 2023.
– Jihye Lee
CNBC Pro: Wall Street is cutting price targets this earnings season. Here are 13 US stocks that bucked the trend
Only a handful of companies have avoided a price target cut by Wall Street banks this earnings season, analysis by CNBC Pro has found.
Of the nearly 300 S&P 500 companies that reported results in the past month, more than two-thirds — 72% — had their median price targets cut or left unchanged by analysts from the previous month.
Only 13 stocks emerged with a significantly higher price target of 5% or more and still offered at least 5% upside potential.
CNBC Pro subscribers can learn more here.
Stocks fall as Powell says terminal interest rate will be higher than expected
In a briefing with reporters on Wednesday after a fourth consecutive rate hike of 0.75 percentage points, Federal Reserve Chairman Jerome Powell said the central bank’s ultimate target for raising rates interest rate had risen.
“We still have some way to go and the data received since our last meeting suggests that the ultimate level of interest rates will be higher than expected,” he said.
Stocks fell on the comment, signaling that interest rates will continue to climb and likely stay higher than expected for longer as the Fed gets inflation under control. This reversed early afternoon gains as traders digested the Fed’s statement as more dovish and hoped rate hikes would be lower going forward.
The Dow Jones Industrial Average rose about 60 points, but pared its gains. The S&P 500 also fell after a post-rate hike spike and rose just 0.09%. The Nasdaq was slightly in the red.
European markets: here are the opening calls
European markets are heading for a higher open on Thursday after U.S. Federal Reserve Chairman Jerome Powell said smaller interest rate hikes could begin in December.
Britain’s FTSE index is expected to open 21 points higher at 7,604, Germany’s DAX up 170 points at 14,580, France’s CAC up 57 points at 6,788 and Italy’s FTSE MIB up 228 points at 24. 851, according to data from IG.
Data released includes Eurozone unemployment and final PMI figures for October and German retail sales for October.