European stocks open flat as global markets await U.S. inflation data; Delivery Hero up 19%

Holly Ellyatt

European stocks opened flat Tuesday as global investors await the latest U.S. inflation reports.

EUROPEAN MARKETS

The pan-European Stoxx 600 index started trading just below the flatline, down 0.01%, with sectors trading in mixed territory. Travel and leisure stocks were down 0.9%, while oil and gas added 0.3%.

April’s consumer price index report is due out on Wednesday and economists expect that it rose 0.4% in April on a month-over-month basis, or 3.4% from 12 months earlier. Traders are hoping that a return to Federal Reserve rate hikes is largely off the table despite a recent slew of hotter-than-expected inflation prints.

Overnight, Asia-Pacific markets pared gains hours after opening higher on Tuesday as stocks on Wall Street stumbled Monday, with the Dow Jones Industrial Average snapping an eight-day winning streak.

U.S. stock futures flickered near the flatline Monday evening as Wall Street braced itself for the release of the producer price index reading for April on Tuesday. Economists polled by Dow Jones anticipate that the PPI gained 0.3% from the previous month. 

Delivery Hero shares jump on $1.25 billion Foodpanda sale

Shares of Delivery Hero jumped 19% in early trade after it announced that Uber would buy its Foodpanda business in Taiwan and buy new shares in the German company in a $1.25 billion deal.

Delivery Hero said in a statement that the deal would allow it to focus its resources on other parts of its global footprint.

— Karen Gilchrist

Anglo American explores options to offload steelmaking coal, nickel and other units

Anglo American outlined a strategy update on Tuesday, which it said would simply its business, even as it remains wrapped up in a takeover bid by BHP Group.

The simplification strategy includes options for offloading its steelmaking coal, nickel and platinum businesses, the company said.

“We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction,” chief executive Duncan Wanblad said in a statement.

It comes a day after Anglo American rejected a raised takeover offer from BHP saying it continued to significantly undervalue the company.

— Karen Gilchrist

UK unemployment rate ticks up slightly

U.K. unemployment rose to 4.3% in the three months to March, new data from the Office for National Statistics showed Tuesday. The rate was in line with analyst expectations and slightly up from the 4.2% recorded in the previous period to February.

Wages excluding bonuses also increased by a stronger-than-expected 6.0% in the three-month period from the same time last year. Analysts had forecast wage growth of 5.9%.

The Bank of England will be closely monitoring labor data and its impact on inflation even as it signaled that a rate cut could come at its next meeting in June.

— Karen Gilchrist

Markets experiencing a ‘Goldilocks-style rally,’ says HSBC

Last week’s equity rally following a rocky period in April indicates the market is moving past its pullback, according to HSBC.

“The dip in risk assets is increasingly in the rear-view mirror as many major equity indices re-approach their year-to-date highs,” strategist Duncan Toms wrote in a Monday note. “These broad-based gains once again resemble a Goldilocks-style rally.”

With investors looking toward Wednesday’s CPI report, Toms believes “the bar for ever more hawkish surprises is getting higher.” Consequentially, the strategist believes even in-line expectations could be another catalyst for risk assets to climb higher.

— Hakyung Kim

CNBC Pro: 14 analysts upgraded this global AI chip stock in the past 2 weeks

There’s been so much love for one global chip stock that as many as 14 analysts upgraded it in the past two weeks.

The stock’s been soaring on the artificial intelligence boom. It’s up around 35% so far this year, and 60% since a year ago.

— Weizhen Tan

U.S. growth and large-cap stocks have an improved outlook, Barclays says

While value stocks continue to outperform in Europe, growth stocks are currently benefiting from improving forward guidance in the U.S., according to Barclays.

“Rates fell from their recent highs after Fed’s dovish turn, further boosting the outlook for Growth,” strategist Venu Krishna wrote. “We remain Positive on Growth in the US, while being Neutral on Value across both regions given that peak rates are behind us.”

Krishna also reiterated his positive position on U.S. large caps over their smaller counterparts.

“In the U.S., Large caps’ exposure to Quality and Sales/EPS Growth styles (themes we are positive on) along with the interest rate risks facing highly levered small caps lead us to maintain our Positive view on large over small,” he added.

— Lisa Kailai Han

CNBC Pro: These 3 ETFs have risen by double-digits every year for the past 5 years

Only three ETFs worldwide have produced double-digit annual returns over the past five years, CNBC Pro research has found.

The three funds stood out among 8,300 equity ETFs worldwide screened by CNBC Pro using FactSet data.

Analysts also expect two of the three ETFs to rise by double-digits again over the next 12 months.

— Ganesh Rao

European markets: Here are the opening calls

European markets are expected to open in negative territory Tuesday.

The U.K.’s FTSE 100 index is expected to open 17 points lower at 8,393, Germany’s DAX down 18 points at 18,718, France’s CAC 5 points lower at 8,199 and Italy’s FTSE MIB down 31 points at 34,451, according to data from IG.

Earnings are due from Euronext, Eutelsat, Hannover Re, Bayer, Porsche and Vodafone.

— Holly Ellyatt

Source : cnbc