Europe stocks mixed as global sentiment sours ahead of inflation data; Auto Trader up 11%

Jenni Reid

European stocks were choppy early Thursday, struggling to shake off a negative trend this week as global markets come under pressure from rising bond yields.

EUROPEAN MARKETS

The regional Stoxx 600 index moved around the flatline in early deals after recording its worst sessions of the month over the last two days, closing Wednesday at its lowest level since May 8.

Sectors were mixed, with telecoms stocks gaining 0.6%. Miners fell 1.6% as traders assessed the impact of BHP Group’s abandoned bid for Anglo American, while tech stocks were down 1.07% after Salesforce posted a rare revenue miss stateside.

Shares of Britain’s Auto Trader jumped 11.5% after the online marketplace beat earnings estimates in its full-year results. European equity market gloom this week has been mirrored globally, as expectations that interest rates will be higher for longer have driven up bond yields — generally a harmful move for stocks.

Investors are eagerly awaiting two inflation prints Friday. First to release will be the euro zone, amid uncertainty over how how many times the European Central Bank will cut interest rates this year beyond its expected first cut at its June meeting next week.

That will be followed by the U.S. personal consumption expenditures price index report, the Federal Reserve’s preferred inflation gauge. The minutes from the Fed’s most recent meeting and recent comments from policymakers have seen money markets fully price in just one rate cut from the world’s biggest central bank this year.

Asia-Pacific markets and U.S. stock futures were both down on Thursday.

Nutritional needs are ‘shifting’ amid rise of weight loss drugs: Nestle CEO

Nestle’s CEO is ‘very closely’ following the ultra-processed food debate

The meteoric rise of weight loss drugs means consumers’ nutritional needs are “shifting” which provides new opportunities for food companies, Nestle CEO Mark Schneider told CNBC.

Investors were initially concerned about the popularity of GLP-1 drugs such as Wegovy and Ozempic as it was assumed that people on the drugs would consume less food, Schneider told CNBC’s Silvia Amaro.

That perspective has since changed, he said.

“I think what since has emerged is that nutritional needs don’t go away. They’re just shifting. So, you know before, during, after GLP-1 therapy — consumers still have nutritional needs, but they may be different from someone who is not on a weight loss regimen.”

— Sophie Kiderlin

Europe stocks open slightly lower

European stock markets opened lower Thursday, though they moved just below the flatline in early deals as sectors spread between losses and gains.

France’s CAC 40 moved 0.14% higher while Germany’s DAX and the U.K.’s FTSE 100 fell by 0.24% and 0.1%, respectively.

— Jenni Reid

Airline SAS extends losses

Scandinavian airline SAS reported a net loss of 2.9 billion Swedish kroner ($271 million) in the quarter to April, higher than the 1.52 billion kroner loss reported in the same period last year.

That was despite a 12% increase in revenue to 9.9 billion kroner.

In its outlook, the airline said it intends to complete its restructuring proceedings in Sweden and the U.S. “as soon as possible,” with a target of summer 2024.

SAS filed for Chapter 11 bankruptcy protection in the U.S. in 2022 to help it cut debt after a pilots’ strike grounded most of its flights.

SAS share price.

— Jenni Reid

Europe stocks head for lower open

European stock markets are set to extend losses on Thursday, according to IG data. The U.K.’s FTSE 100 was last seen down 36 points at 8,145, Germany’s DAX 75 points lower at 18,402, and France’s CAC 40 down 26 points at 7,914. Italy’s MIB was seen slipping 125 points to 34,146.

— Jenni Reid

Australian miners slip as BHP walks away from Anglo American takeover plan

Shares of Australian miners fell after mining giant BHP walked away from its £38.6 billion ($49 billion) plan to take over rival Anglo American.

In a regulatory filing, BHP said that while it believed that its takeover bid was “a compelling opportunity to effectively grow the pie of value for both sets of shareholders,” it was unable to reach agreement with Anglo American, specifically in respect of South African regulatory risk and cost.

BHP had made two earlier offers at £31.1 billion in April, and a £34 billion offer on May 14.

Shares of BHP lost 1.73%, while counterparts Rio Tinto and Fortescue Group dropped 1.34% and 2.27% respectively.

— Lim Hui Jie

CNBC Pro: Goldman Sachs names global ‘alpha’ stock ideas — and gives one nearly 60% upside

European markets have largely had a good run this year — with several market watchers looking keenly at the region and saying that it has “greater tailwind than the U.S.”

Those searching for pockets of opportunities in the region can look to Goldman Sachs’ selection of “alpha” stock opportunities.

“Our macro team expects solid growth and monetary policy easing into 2H24. While the YTD [year-to-date] rally in equities suggests some of this optimism is already priced, with market correlation at a 5-year low, we continue to see potential for alpha opportunities,” the investment bank’s analysts noted, naming stocks they see potential in.

— Amala Balakrishner

CNBC Pro: This global fund’s stock could rally by 50% if buyback limits are removed, fund manager says

A global investment trust based in the United Kingdom could see its stock price soar by more than 50% if restrictions on share buybacks are lifted, according to fund manager Brian McCormick.

The company, which trades on the London Stock Exchange, says it has assets worth £3 billion ($3.8 billion) and holds investments in private companies as well as publicly listed companies.

— Ganesh Rao

Salesforce’s super rare revenue miss & poor guidance send shares plunging

Although earnings from Salesforce beat analyst estimates by 6 cents, first quarter revenues fell short of expectations. That’s sending shockwaves through Wall Street as it’s the tech giant first revenue miss since February 2006, using information from earnings data firm LSEG.

Compounding the disappointing top line results is weak second quarter revenue and earnings guidance. Shares of the blue chip stock are plunging 17% on the news. That move alone would push the Dow Industrials down 315 points if Salesforce stock’s current losses hold at Thursday’s market open.

— Robert Hum

Fed reports economy expanded despite concerns over inflation

The U.S. economy grew unevenly over the past six weeks while consumers recoiled against higher prices, the Federal Reserve reported Wednesday.

As part of its periodic “Beige Book” economic look, the Fed noted that the economy “continued to expand” during the period, though “conditions varied” among the 12 central bank districts.

On inflation, the report said prices rose at a “modest” pace while “consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average.” Retailers reported offering incentives to shoppers as “price growth is expected to continue at a modest pace in the near term.”

— Jeff Cox

Source : cnbc