European markets set for muted open to close out winning week on dovish Fed bets

Elliot Smith

European markets are set for a flat open on Friday to close out an upbeat week, as the U.S. Federal Reserve’s latest meeting minutes added to expectations that monetary policy tightening may slow down.

The pan-European Stoxx 600 closed up 0.5% on Thursday, with a third straight session of gains taking it to a more than three-month high.

Minutes from the Fed’s November meeting signaled that the central bank is seeing progress in its fight against high inflation and is looking to slow the pace of rate hikes.

“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the minutes stated.

European investors also reacted well to several economic data points over the course of the week that have indicated a slightly shallower recession than previously feared.

Shares in Asia-Pacific were mostly lower on Friday, while U.S. markets were closed for Thanksgiving on Thursday and are set for an early close on Friday.

Here are the opening calls

Britain’s FTSE 100 is seen around 2 points higher at 7,467, Germany’s DAX is expected to add around 8 points to 14,548 and France’s CAC 40 is set to slip by around 6 points to 6,701.

CNBC Pro: Asset manager names two stocks to short as UK commercial real estate turns ‘toxic’

The U.K. commercial property sector is in a “toxic environment” for investors, according to Plurimi Wealth’s chief investment officer.

Patrick Armstrong told CNBC’s Pro Talks that the real estate sector was “sensitive” to higher interest rates, which he thinks will lead to lower property values and share prices.

He revealed two stocks he was betting against in the sector by shorting their shares.

— Ganesh Rao

CNBC Pro: Outperforming asset manager picks the stocks set to win as margins get squeezed

Patrick Armstrong, chief investment officer at Plurimi Wealth, believes margin squeeze is the ‘biggest risk’ for equities. But he thinks some stocks could beat the trend.

“Own sectors with defendable margins or that are creating margin squeeze elsewhere,” he added, naming the sectors and stocks he likes best.

— Zavier Ong

CNBC Pro: UBS says recession in 2023 will be an inch deep but a mile wide — and that’s not priced into stocks

Global economic conditions will shift next year and that’s going to flip which markets and sectors underperform, according to the chief strategist of UBS Investment Bank.

“It’s an inch deep but it’s a mile wide,” he said of the expected recession. “Global growth is at 2% and that is not priced into stocks,” Bhanu Baweja told CNBC’s “Squawk Box Europe” Wednesday.

He also named which sectors he expects to outperform next year.

— Jenni Reid

Source : CNBC