Stocks in motion: Castellum up 7%, Shell down 5%
Shares of Swedish commercial real estate company Castellum gained 7.3% in mid-afternoon after allowing shareholder M2 Asset Management to sell about 40 million shares.
At the bottom of the Stoxx 600, Shell shares fell 5% after the oil major issued a third-quarter profit warning.
We are not on the brink of complete economic collapse, says asset management firm
Mathias Heim, investment director at Bellecapital, discusses the outlook for European markets and the Credit Suisse crisis.
Shell waives third-quarter earnings warning
Shell expects a weaker third quarter due to weaker demand.
Ina Fasbender | AFP | Getty Images
Energy giant Shell fell 3% in early trading after saying third-quarter profits would be “significantly” lower.
It reported record first-half profits as energy prices soared, but said it saw sharp declines in refining margins and lower profits from natural gas trading.
The European oil and gas sector was down 0.45% at 9:00 a.m. London time.
—Jenni Reid
Stocks in motion: Zalando up 5%, DS Smith down 3%
Zalando shares gained more than 5% in early trade to top the Stoxx 600 after the German online retailer struck a new strategic partnership with US sportswear giant Nike.
At the bottom of the European blue chip index, British packaging company DS Smith slipped 3.7%.
-Elliot Smith
CNBC Pro: Goldman Sachs Raises Crude Price Forecast After ‘OPEC+ Attacks the West’
Oil prices will skyrocket by the end of this year, according to Goldman Sachs.
The Wall Street bank made the call after OPEC+, a powerful group of oil producers, decided to cut production by 2 million barrels a day from November.
Bank analysts say it would be “unsustainable” for OPEC+ to sustain the cuts until the end of next year as oil stocks run out completely, causing prices to soar and destruction to occur. Requirement.
CNBC Pro subscribers can learn more here.
Barclays: Equities benefit from a respite in rates and the appeasement of the dollar, but not yet “out of business”
European equity strategists at Barclays noted on Wednesday that a temporary easing in rates and the US dollar had offered respite for “oversold” stocks.
“Amid signs of financial stress, we may be closer to the pain threshold for central banks, but we believe an accommodating pivot requires more evidence of weaker growth and a decisive decline in inflation, so we doubt equities are still out of the woods.” said Emmanuel Cau, head of European equity strategy at Barclays.
Cau suggested that the bar for a stock market rebound is quite low, given that major indices are down 25% to 30%, sentiment remains “ultra-bearish” and the fourth quarter generally offers “positive seasonality.” “. However, he suggested that the “growth-policy trade-off” remains difficult.
“While risk reduction has come a long way, the capitulation can continue without a trigger to allay fears of a hard landing. Persistently high inflation limits the ability of central banks to turn around and tolerate a premature easing of financial conditions, even as recession looms,” Cau said.
“As seen in the UK, however, credit stress is important for the reaction function of central banks, and we may have reached their pain threshold, but markets should not confuse financial stability with stimulus. monetary – the end of easy money has wide ramifications that are just now in sight.”
-Elliot Smith
CNBC Pro: NYU’s Aswath Damodaran Names Big Tech Stocks That Are a Better Bet Than “Traditional Safes”
NYU’s Aswath Damodaran likes companies that can “withstand a hurricane, a disaster if that happens.”
The New York University finance professor, sometimes dubbed the “dean of valuation,” thinks big tech stocks can do just that and reveals which stocks he owns.
Pro subscribers can learn more here.
— Zavier Ong
Mizuho says OPEC+ supply cut confirms ‘naked desire for price buoyancy’
The decision by OPEC and its allies to cut production by 2 million barrels per day confirms the group’s “naked desire for price buoyancy, not just support”, said Vishnu Varathan, chief economy officer. and strategy at Mizuho Bank.
A supply cut of around 1 million barrels per day would have resulted in price gains without compromising volumes, but a deeper cut shows the alliance’s “contempt for economic woes and geopolitical alignment with global partners,” he wrote. .
“What may have been viewed as an opportunistic gamble exploiting geopolitical supply issues for self-interest now risks being interpreted as an affront to the United States and its allies (in protest against capping plans prices of Russia) which aligns with Russia,” he added.
—Abigail Ng
CNBC Pro: “There’s a lot to buy in China,” says fund manager and names these two stocks EV
Despite China’s abysmal stock market returns this year, one fund manager believes there are pockets of value in some “key sectors” even when financial conditions are tough.
Edmund Harris, head of Asian and emerging markets investments at Guinness Asset Management, said companies in electric vehicles, factory automation and sustainable energy are likely to outperform their global counterparts in the coming months. next 5 to 20 years.
He cited two actions that could benefit from this theme.
CNBC Pro subscribers can learn more here.
—Ganesh Rao
October could be the start of a bullish rally, according to Detrick
Even though stocks retreated on Wednesday, ending a two-day major winning streak, October could still be the start of a new bull rally according to Ryan Detrick, chief market strategist at Carson Group.
“We think this could be the start of a pretty decent sized year-end rally,” Detrick said on CNBC’s “Closing Bell: Overtime.”
That’s because, traditionally, stock performance improves in October in midterm election years, Detrick said.
He also noted that although markets ended the day lower, equities posted a major rally in the afternoon that regained a lot of lost ground. That’s a positive, according to Detrick.
—Carmen Reinicke
CNBC Pro: Time to buy the dip? Some stocks are still trading at lows with another sharp rise
The start of this week brought a sort of recovery of relief to equities. However, the global indices and Wall Street are still well in the red since the beginning of the year.
This could present an opportunity for investors looking for quality stocks and future upside potential in a volatile environment.
CNBC Pro picked stocks trading within 10% of their 52-week low, but have a buy rating of more than 50% from Wall Street analysts covering them. The stocks have an average upside price target of 20% or more and a 2022 earnings growth expectation of at least 10%.
Here are the stocks that rose. CNBC Pro subscribers can learn more here.
—Weizhen Tan
European markets: here are the opening calls
European stocks are heading for a lower open on Wednesday, bucking a positive trend seen in the previous session.
Britain’s FTSE index is expected to open down 27 points to 7,059, Germany’s DAX down 59 points to 12,606, France’s CAC 40 down 25 points to 6,005 and Italy’s FTSE MIB down 112 points at 21,426, according to data from IG.
Wednesday’s expected declines come after European markets rebounded yesterday, with the pan-European Stoxx 600 closing 3% higher. Travel and leisure stocks jumped 6.1% to lead the gains as all sectors and major exchanges moved into positive territory.
The pound rose on Tuesday after the UK government’s dramatic reversal in policy and UK sovereign bond yields also fell after a sharp sell-off last week.
Wednesday’s data releases include final Eurozone PMI data for September and German import and export data for August. Revenue comes from Tesco and Bang & Olufsen.
—Holly Ellyatt
