European markets nudge higher as global investors await U.S. inflation data

Holly Ellyatt

European stocks were cautiously higher on Tuesday as global markets geared up for the latest reading of U.S. inflation, with the August data set to be released Tuesday.

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE	VOLUME
.FTSE	FTSE 100	*FTSE	7480.52	7.49	0.1	14886205
.GDAXI	DAX	*DAX	13426.56	24.29	0.18	2067047
.FCHI	CAC 40 Index	CAC	6355.74	22.15	0.35	3516575
.FTMIB	FTSE MIB	*FTSE MIB	22659.06	48.66	0.22	14104880
.AEX	AEX Amsterdam Index	AEX	698.4	1.53	0.22	5435768
.IBEX	IBEX 35 Idx	*IBEX 35	8212.9	18.6	0.23	6506006

The pan-European Stoxx 600 was up 0.2% in early trade, with food and beverage stocks adding 0.9% to lead gains while retail stocks slid 1.3%.

The inflation report is one of the last pieces of data on inflation the U.S. Federal Reserve will see ahead of its September meeting, where the central bank is expected to deliver its third consecutive 0.75 percentage point rate hike in an effort to combat high inflation.

Fed Chair Jerome Powell reiterated last week that he is “strongly committed” to bringing down inflation.

UBS plans to boost dividend; shares rise in pre-market

UBS Group plans to increase its dividend by 10% to $0.55 per share and expects its 2022 share repurchases to exceed $5 billion, the Swiss bank said on Tuesday.

UBS shares were indicated 1.2% higher in pre-market activity after what ZKB analyst Michael Klien called surprise news.

— Reuters

Stocks on the move: Future up 5%, Ocado down 12%

Shares of Future Plc gained 5.5% in early trade to lead the Stoxx 600 after the British media company projected that full-year adjusted operating profit would come in at the top end of market expectations.

At the bottom of the European blue chip index, British grocery technology company Ocado

plunged more than 12% after warning of lower full-year sales as consumers weather soaring inflation.

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Relief rally is likely bear market bounce, Wells Fargo says

The recent relief rally in stocks is likely another bear market bounce and investors should position for more choppiness ahead, according to Wells Fargo.

“Year-do-date, the outperformance of defensive, high shareholder payout, high-quality and low-valuation stocks reminds investors of the hallmark of a bear market,” global portfolio and investment strategist Chao Ma wrote in a Monday note.

Such recoveries happen in nearly every bear market and many are quickly reversed, leaving investors with regrets, they added.

“Although it is difficult to predict the bottom of a bear market, in the past, market bottoms were typically preconditioned by over-pessimistic market sentiment and a sign of definitive improvement in the underlying economic or market issue,” Ma said. “We believe we are not there yet in either regard.”

In the meantime, Ma recommends investors look for defensive stocks with low volatility, high dividends and share repurchase yields. He also says investors should go for high quality names with profitability and leading market share and affordable market price.

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U.S. stock futures rise ahead of Tuesday CPI report

U.S. stock futures were higher Monday night as Wall Street looks ahead to the August consumer price index report set to be released Tuesday morning. The report will give investors an update on the inflation situation in the U.S. and is one of the last pieces of data the Federal Reserve will see ahead of its September meeting.

Dow Jones Industrial Average futures gained 55 points, or 0.17%. S&P 500 and Nasdaq 100 futures climbed 0.18% and 0.21%, respectively.

—Carmen Reinicke

CNBC Pro: Want to invest in real estate? These REITs are among analysts’ favorites

Real estate investment trusts — or REITs — are coming back to the spotlight after a volatile year for many asset classes.

Analysts from Morgan Stanley and Citi highlight REITs from two sectors that they say could outperform the wider market, and remain resilient in a recession.

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European markets: Here are the opening calls

European stocks are expected to open cautiously higher on Wednesday with the U.K.’s FTSE index seen 18 points higher at 7,560, Germany’s DAX 33 points higher at 13,944, France’s CAC 40 up 18 points at 6,616 and Italy’s FTSE MIB up 42 points at 23,029, according to data from IG.

Data releases include preliminary euro zone unemployment data for the second quarter as well as second quarter gross domestic product. The latest U.K. inflation numbers for July will be released as well as preliminary second quarter Dutch GDP.

Earnings come from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.

Source : CNBC