European markets set for higher open ahead of key U.S. inflation data

Karen Gilchrist & Holly Ellyatt

European markets are heading for a higher open Wednesday as global investors look ahead to the latest U.S. inflation print.

April’s consumer price index report is due out during U.S. trading hours on Wednesday and economists expect that it rose 0.4% in April on a month-over-month basis, or 3.4% from 12 months earlier.

Traders are hoping that a return to Federal Reserve rate hikes is largely off the table despite a recent slew of hotter-than-expected inflation prints. On Tuesday, April’s producer price index came in higher than economists’ expectations, dampening expectations that the Fed would begin cutting rates later this year.

Fed Chair Jerome Powell reiterated Tuesday that inflation is falling more slowly than expected, likely keeping interest rates elevated for an extended period.

Asia-Pacific markets were mostly higher overnight, tracking Wall Street gains on Tuesday that saw the Nasdaq Composite index hit a fresh record closing high despite the strong inflation data. U.S. stock futures were little changed overnight.

Dutch bank ABN Amro reports 29% increase in net profit in first quarter

Dutch bank ABN Amro on Wednesday reported its 2024 first-quarter earnings, posting a net profit of 674 million euro ($729.6 million).

That marked a sharp increase from the same period a year earlier, when the bank’s net profit came in at 523 million euros. An analyst forecast previously complied by the bank had estimated net profit of 521 million euros according to Reuters.

The bank said it benefited from the higher interest rates, citing strong net interest income and low cost of risks as some of the key contributors to its results.

— Sophie Kiderlin

Burberry reports 34% profit slump amid ‘challenging’ outlook

British fashion house Burberry reported a 34% drop in annual operating profit on Wednesday and said the outlook for the company was set to remain “challenging” in the first half of this year amid waning demand in the luxury market.

Reported revenue was down 4% in the year to March 2024, as sales in the Americas dwindled over the period even as they picked up slightly in Europe and Asia.

The company said it expects the outlook to pick up slightly in the second half of the year, as cost savings bear fruit. However, it added that it expects around a £30 million ($37.7 million) hit to revenue and around a £20 million hit to adjusted operating profit due to currency headwinds over the coming year.

“While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements,” CEO Jonathan Akeroyd said in a statement.

“We are using what we have learned over the past year to finetune our approach, while adapting to the external environment,” he added.

— Karen Gilchrist

Commerzbank reports 29% increase in first-quarter net profits

Germany’s Commerzbank on Wednesday reported a better-than-expected 29% increase in first-quarter net profit to 747 million euros ($808 million), its strongest quarterly profit in 10 years.

Analysts had anticipated profits of 652 million euros, according to an April consensus forecast published by Commerzbank.

The bank also raised its outlook for net interest income to around 8.1 billion euros for the full year.

— Karen Gilchrist

CNBC Pro: Is meme trading back? These 4 stocks could benefit from a retail investor boom

Whether retail investors profit from their bets on GameStop and AMC Entertainment or not, one group of companies is set to cash in from a spike in trading.

These four companies have previously acknowledged a boost to earnings from heightened retail investor trading.

— Ganesh Rao

CNBC Pro: These are Goldman Sachs’ favorite stocks with 50% or more upside

Stocks have been on a tear.

The S&P 500 is soaring to record highs this year and the Dow Jones Industrial Average just had its best week of the year — and its eighth-straight winning session last Friday.

But Goldman Sachs has still given some of its favorite stocks more than 50% potential upside, and one more than 100%.

— Weizhen Tan

European markets: Here are the opening calls

European markets are expected to open higher Wednesday.

The U.K.’s FTSE 100 index is expected to open 41 points lower at 8,470, Germany’s DAX up 60 points at 18,783, France’s CAC 22 points higher at 8,249 and Italy’s FTSE MIB up 142 points at 34,945, according to data from IG.

Earnings are due from Allianz, EON, RWE, Commerzbank, Thyssenkrupp, TUI, Bilfinger, ABN Amro, Telecom Italia, Burberry and Ubisoft. The latest preliminary gross domestic product reading for the euro zone is also due.

— Holly Ellyatt

Source : cnbc