European markets slightly lower after hitting five-week high; Heineken down 7%

Elliot Smith & Jenni Reid

European markets pulled back slightly on Wednesday, with corporate earnings season in full swing and a European Central Bank meeting ahead.

European markets

TICKER	COMPANY	PRICE	CHANGE	%CHANGE
.FTSE	FTSE 100	7003.08	-10.4	-0.15
.GDAXI	DAX	13049.45	-3.51	-0.03
.FCHI	CAC 40 Index	6254.17	3.62	0.06
.FTMIB	FTSE MIB	22165.27	-124.58	-0.56
.IBEX	IBEX 35 Idx	7776.8	-18.1	-0.23

The pan-European Stoxx 600 was down 0.2% in early trade, with tech stocks shedding 1.7% to lead losses while health care stocks added 0.7%.

The European blue chip index ended Tuesday 1.4% higher, hitting its highest level since Sept. 19. However, banking stocks closed down 0.3% amid mixed earnings, with UBS beating market expectations but seeing profits slide. The same pattern was reported at HSBC.

Deutsche Bank reported early Wednesday, and also surpassed analyst forecasts. Other European companies to report include Barclays, Standard Chartered, Mercedes Benz, Heineken and Reckitt Benckiser.

Investors will be also looking ahead to Thursday’s European Central Bank meeting, at which it is widely expected to raise rates by 75 basis points; and for clues on its path towards quantitative tightening, as the EU heads for a likely recession.

Meanwhile, sterling rose to its highest level this month, trading at $1.1481 at 8:00 a.m. in London, after Rishi Sunak took office as the new U.K. prime minister.

U.S. stocks rallied Tuesday for a third straight day as soft economic data indicated the Fed may not need to be so aggressive with rate hikes, though stock futures were lower Wednesday morning after Alphabet earnings disappointed. A slew of U.S. companies will report Wednesday, including Meta, Coca Cola and McDonalds, and data is due on weekly mortgage applications, wholesale inventories and new home sales.

Asia-Pacific markets were higher on Fed expectations and comments from the China Securities Regulatory Commission on creating a “regulated, transparent open, lively and resilient” market.

Stocks on the move: Heineken down 7%, ASMI down 8%

Earnings were a key driver of individual share price action on Wednesday.

Dutch semiconductor firm ASMI dropped 8% in early trade to the bottom of the Stoxx 600 after a weak earnings report and fourth-quarter outlook.

Heineken shares fell 7% after the world’s second-largest brewer missed third-quarter beer sales expectations.

– Elliot Smith

European bank earnings beat expectations

Banks Standard Chartered, Barclays and Deutsche Bank surpassed analyst predictions as they reported third quarter earnings Wednesday morning.

It follows UBS and HSBC beating expectations Tuesday.

Barclays noted strong performance in fixed income, currencies and commodities trading, where it grew income by 93% to £1.546 billion ($1.77 billion).

The CFO of Deutsche Bank, James von Moltke, told CNBC’s Joumanna Bercetche it was “seeing the benefit of interest rates come through in our corporate bank and private bank, essentially those with large deposit books.”

— Jenni Reid

European markets: Here are the opening calls

European indexes are expected to slightly lower this morning. Italy’s MIB was set to open down 80 points, the UK’s FTSE 100 down 17.5 points, France’s CAC 40 down 13.5 points and Germany’s DAX down 18 points.

— Jenni Reid

CNBC Pro: Here’s how to rescue your portfolio if it’s underwater, a fund manager advises and names 3 recession-proof stocks

When the S&P 500 is in a bear market, and growth stocks are falling alongside bonds, what should investors do?

Fund manager Brian Arcese spoke to CNBC “Pro Talks”, shared his rescue plan and named 3 stocks to own during a recession.

— Ganesh Rao

Hang Seng index rebounds after three sessions of declines

The benchmark Hang Seng index in Hong Kong rallied in the morning session, but was still down around 4% for the week so far and nearly 10% month to date.

On Monday, the index dropped more than 6% following the conclusion of the Communist Party of China’s 20th National Congress over the weekend where President Xi Jinping tightened his grip on power.

The HSI was volatile on Tuesday before closing 0.1% lower. It has risen as much as 2.56% on Wednesday.

— Abigail Ng

CNBC Pro: Portfolio manager names 3 investing plays to go for, and what to buy right now

Markets have been volatile, with stocks swinging back to sharp gains last week after steep declines.

Still, there’s uncertainty around inflation and interest rate hikes.

Amid the noise, John Petrides, portfolio manager at Tocqueville Asset Management, highlights three plays investors can get into right now.

— Weizhen Tan

Alphabet shares fall after earnings results

Shares of Google-parent Alphabet dropped 6.5% in extended trading after the online search giant reported lackluster third-quarter earnings results.

Alphabet missed expectations on the top and bottom lines, and reported a decline in YouTube ad revenue, signaling trouble ahead for tech companies reporting earnings this week that also rely on ad spending.

Other mega-cap tech stocks declined following the report. Shares of Meta Platforms fell 4.1% in after hours trading, while Amazon slipped 4.6%. Apple dropped 0.7%.

Alphabet shares fall Chart

— Sarah Min

Fed December rate hike a ‘wildcard’ after consumer confidence data, economist says

Tuesday’s chilled consumer confidence data from The Conference Board is casting doubt on if or by how much the Fed will raise interest rates after November’s meeting, according to Jeffrey Roach, chief economist for LPL Financial.

“The Federal Reserve will likely hike rates by 0.75% in November to cool inflationary pressures but the magnitude at the December meeting is a bit of a wild card since strong consumer demand will keep upward pressure on prices,” he said following the release on the data. “The biggest risk is the unknown lagged effects from the Fed’s cumulative tightening and the economy may not feel the full effects until next year when recession risks are high.”

— Alex Harring

Source : CNBC