ECB likely to cut interest rates in June, says policymaker
The European Central Bank should cut interest rates in June to avoid falling behind the inflation curve, according to its decision-maker François Villeroy de Galhau.
“The question is the next Governing Council which will take place at the beginning of June (…) and barring any major surprises, we should lower rates because we are now sufficiently confident and increasingly confident about the disinflationary trajectory of the zone euro”, declared the governor of the Bank of France, Villeroy. CNBC’s Karen Tso said Thursday.
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—Sam Meredith
US stocks open higher
US stocks started Thursday’s session higher.
The Dow Jones was trading up 0.3% shortly after 9:30 a.m. ET. The S&P 500 and Nasdaq Composite each added about 0.2%.
-Alex Harring
Stocks on the move: ABB up 5.5%, Sartorius Stedim down 16%
Shares of a Swiss engineering company ABB rose 5.5% after the company reported a better-than-expected rise in operating profit.
At the other end of the Stoxx 600, British biopharmaceutical company Sartorius Stedim fell 13% after reporting a decline in first-quarter sales and net profit.
—Karen Gilchrist
Stock returns will continue to be ‘robust’ over the medium term, says Wolfe Research
Stocks appear to have lost some momentum in recent weeks, with the S&P500 on track for its third straight week of losses. But Wolfe Research said it remains bullish on the stocks.
“In the short term, we sense that U.S. equity markets are likely to experience additional downward pressure,” Chris Senyek wrote Thursday. “However, over the medium term, we continue to believe that the market cycle will have the greatest impact on overall equity market returns, sector rotation and thematic performance.”
In fact, Senyek said markets remain in what the firm calls the early acceleration phase, a period in which stock returns have “historically been robust and it pays to be cyclically positioned.” He added that traders should stay on short-cycle industrial sectors, which are particularly sensitive to the economy in the near term, as well as analog semiconductors and energy services.
-Sarah Min
World’s largest sovereign wealth fund posts $110 billion profit in first quarter
Norges Bank, Norway’s central bank, in Oslo, Norway, Tuesday, October 17, 2023.
Bloomberg | Bloomberg | Getty Images
Norway’s giant sovereign wealth fund reported a first-quarter profit of 1.21 trillion crowns ($109.9 billion) on Thursday, supported by strong returns on its investments in technology stocks.
“Our equity investments recorded a very strong return in the first quarter, particularly thanks to the technology sector,” Trond Grande, deputy managing director of the fund, said in a statement.
Norway’s sovereign wealth fund, the world’s largest, was created in the 1990s to invest surplus revenues from the country’s oil and gas sector. To date, the fund has invested in more than 8,800 companies in more than 70 countries around the world.
—Sam Meredith
Hipgnosis Songs Fund Up 31% After Closing $1.4 Billion Sale
Nile Rodgers of Nile Rodgers & Chic performs at Harvest Rock 2023 on October 28, 2023 in Adelaide, Australia.
Marc Grimwade | Wireframe | Getty Images
Hipgnosis Songs Fund, a London-listed music intellectual property investment company founded by Merck Mercuriadis and Nile Rodgers in 2018, announced on Thursday that its board of directors had recommended a sale to music rights investor Concord, valuing the $1.4 billion company.
Shares in the FTSE 250 component were up 31% as of 8.30am UK time on Thursday.
Hipgnosis acquired the rights to songs from A-list artists including the Red Hot Chili Peppers, Mark Ronson, Shakira, Neil Young and Blondie, but was mired in financial reporting problems, while its operating loss before taxes widened in 2023 to reach $86.63 million.
The valuation equates to £0.932 ($1.16) per share, a 32.2% premium to Wednesday’s closing price. Financing for the operation will be supported by Apollo Capital Management, the American private equity giant and partner of Concord.
In a statement, the companies said Concord had “a proven track record of strategic acquisitions and catalog expansion” and that “rights-bound creators” would benefit from the deal.
He also said that to achieve a “significant improvement in share price”, the company needed “substantial financial and governance changes to improve its financial performance”.
-Jenni Reid
European stocks open slightly higher
European stocks were cautiously higher early Thursday, with the Stoxx 600 index up 0.25% at 8:13 a.m. in London and sectors trading mixed.
Major stock markets rose, with France’s CAC 40 up 0.5%, Britain’s FTSE 100 up 0.5% and Germany’s DAX up 0.3%.
Stoxx 600 index.
Sterling continues to advance after inflation data
The British pound was higher against the U.S. dollar and the euro on Thursday morning, extending Wednesday’s gains as higher-than-expected U.K. inflation data caused the market to anticipate an interest rate cut later in the year.
Sterling was up 0.27% against the greenback at $1.248 at 7:30 a.m. in London, and 0.1% against the euro at 1.167.
-Jenni Reid
ABB, Nokia results
The first quarter earnings season is starting to pick up pace in Europe, with reports including from a Swiss engineering company. ABB and telecommunications giant Nokia THURSDAY.
ABB reported flat revenue for the period of $7.87 billion and an 11% rise in operating profit to $1.41 billion, above expectations.
Finnish Nokia Group failed to meet market expectations for operating profit, according to Reuters, with its net revenue falling 19%.
-Jenni Reid
Oil falls more than 3% despite the risk of war: “Peace may have ended, but the oil continues to flow”
Crude oil futures fell more than 3% on Wednesday as the market discounted the risk of a broader war between Israel and Iran that could disrupt supplies.
THE West Texas Intermediate the contract for delivery in May lost $2.76, or 3.23%, to $82.60 per barrel. June Brent Futures were down $2.87, or 3.19%, at $87.15 a barrel. US oil and the global benchmark are down more than 3.5% for the week.
“Theories that tensions between Iran and Israel would disrupt oil supplies have fizzled,” said Manish Raj, managing director of Velandera Energy Partners. “Peace may have ended, but the oil continues to flow,” he said.
-Spencer Kimball
Morgan Stanley, HSBC cut investment banking jobs in Asia this week: Reuters
Morgan Stanley and HSBC are cutting dozens of investment banking jobs in the Asia-Pacific region this week, according to a Reuters report.
Citing sources, Reuters said it comes as the two banks step up cost cuts, with slowing trading and slowing markets in China and Hong Kong weighing on business prospects.
Morgan Stanley is cutting at least 50 investment banking jobs in the region starting this week, according to the report, affecting about 13% of its 400 investment banking employees in Asia.
HSBC reportedly began making layoffs on Tuesday and around 30 traders are expected to leave the company.
-Lim Hui Jie
CNBC Pro: Many Analysts Cut Their Price Targets on These 10 Stocks Ahead of Earnings
Analysts have lowered their expectations on several global stocks this week by lowering their price targets.
The price target changes come ahead of the upcoming earnings season covering the first quarter of this year.
CNBC Pro selected global stocks from the MSCI World Index that have had their price target revised down in the last seven days and have not yet released their results.
CNBC Pro subscribers can learn more about the 10 stocks here.
-Ganesh Rao
European markets: here are the opening calls
European markets are expected to open mixed on Thursday.
The United Kingdom FTSE100 the index is expected to open up 17 points at 7,872, according to the DAX up 5 points to 17,789, the CAC 10 points less at 7,983 and that of Italy MIB FTSE down 8 points to 32,963, according to IG data.
Profits are expected to come from Nokia, Easyjet and ABB. The data released includes new European car registration figures for March.
—Houx Ellyatt