European markets retreat ahead of U.S. midterm elections

Soegeefx AppsEU MarketEuropean markets retreat ahead of U.S. midterm elections

Elliot Smith & Holly Ellyatt

European markets were slightly lower on Tuesday as global investors look to the United States, where midterm elections are taking place.

European markets

.FTSE FTSE 100 7267.36 -32.63 -0.45
.GDAXI DAX 13538.44 4.92 0.04
.FCHI CAC 40 Index 6386.59 -30.02 -0.47
.FTMIB FTSE MIB 23429.08 -63.92 -0.27
.IBEX IBEX 35 Idx 7934.1 -28.2 -0.35

The pan-European Stoxx 600 fell 0.3% in early trade, with travel and leisure stocks shedding 1% to lead losses as almost all sectors and major bourses slid into the red.

The elections will determine which party will control Congress and could affect the direction of future spending. Democrats currently control the House, and have a majority in the Senate. A Republican sweep could signal greater support of oil and gas companies.

Investors are also looking ahead to Thursday’s U.S. consumer price index report, which will give further insight into the Federal Reserve’s efforts to squash inflation. A hot inflation report could signal to investors that a pivot from higher interest rates, for longer, could be further away than expected.

Stocks in the Asia-Pacific traded mostly higher Tuesday while U.S. stock futures were flat in early premarket trade following a positive session for markets stateside.

Stocks on the move: Pandora up 6%, Persimmon down 8%

Quarterly earnings reports continue to drive individual share price movement in Europe.

Pandora shares climbed more than 6% in early trade to lead the Stoxx 600 after the Danish jeweler beat third-quarter profit expectations.

At the bottom of the index, British housebuilder Persimmon fell 8.7% after reporting a rise in cancellation rates and projecting fall in sales in 2023.

– Elliot Smith

CNBC Pro: UBS thinks gold will rally by a double-digit percentage in 2023

Swiss investment bank UBS is forecasting a rebound in gold prices next year.

Gold has traditionally been considered an inflation hedge, but rising interest rates mean it has lost 18% of its value since March

UBS analysts said it offers “an attractive risk-reward” looking ahead — here’s why.

— Ganesh Rao

CNBC Pro: Markets will rally into year-end, says Morgan Stanley’s Slimmon, who names 3 stocks to buy

Morgan Stanley’s Andrew Slimmon expects the market to rise as we head toward the end of the year.

“Despite [the] Fed Chair throwing cold water on the concept of a Fed pivot, I still believe the equity market will rally into year-end,” Slimmon, senior portfolio manager at Morgan Stanley Investment Management, told CNBC’s “Street Signs Asia” Friday.

He expects all but one sector to move higher, and names three stocks to cash in.

— Weizhen Tan

European markets: Here are the opening calls

European markets are set to open in mixed territory on Tuesday, with investors keeping a close eye on the U.S. midterm elections.

The U.K.’s FTSE index is expected to open 28 points lower at 7,273, Germany’s DAX up 22 points at 13,556, France’s CAC unchanged at 6,418 and Italy’s FTSE MIB up 8 points at 23,358, according to data from IG.

Data releases on Tuesday include euro zone retail sales for September, Dutch inflation data for October and French trade balance figures for September.

Earnings come from Bayer, Henkel, Munich Re, Deutsche Post DHL, Ferragamo, Banco BPM, Aveva, AB Foods and Persimmon.

— Holly Ellyatt

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