European stocks open mixed as earnings dampen relief rally following soft U.S. inflation data

Karen Gilchrist & Holly Ellyatt

European stocks opened mixed Thursday as earnings weighed on a relief rally for global markets following softer-than-expected U.S. inflation data.

EUROPEAN MARKETS

The pan-European Stoxx 600 index was up 0.1% in early trade, with sectors trading in mixed territory. Tech stocks added 0.5% while autos loss 1%.

The U.S. consumer price index rose 0.3% in April, below the 0.4% rise predicted by the Dow Jones, data released Wednesday showed. Consumer prices still grew 3.4% from a year ago, in line with market estimates, but the data has encouraged traders to believe that the U.S. Federal Reserve could begin to cut rates in the near future.

Asia-Pacific markets rose Thursday after Wall Street benchmarks closed at record highs overnight following the inflation data. U.S. stock futures were near flat overnight.

EasyJet posts larger than expected first-half loss

British low-cost airline EasyJet on Thursday posted a slightly larger than expected pre-tax loss of £350 million ($443 million) for the first half of the year even as it said inflationary pressures on the sector were beginning to ease.

The shortfall was above the £340 million expected by analysts, according to an LSEG poll cited by Reuters, but less than the £392 million loss reported the year earlier, as the airline continued to emerge from a Covid-19-era travel slump.

CEO Johan Lundgren told CNBC that the airline was seeing “positive momentum” coming into the summer travel season, with consumers prioritizing travel, particularly to classic European destinations such as Spain, Portugal and Turkey.

The CEO, who announced he will be stepping down in 2025, added that EasyJet expects to receive all of its new plane deliveries from Airbus despite wider concerns about supply constraints.

“That doesn’t necessarily mean there’s going to be less capacity out there versus last year. It certainly will be less that some airlines were expecting, but we are not affected by that,” he said.

— Karen Gilchrist

CNBC Pro: Citi names one under-the-radar stock to buy on an AI opportunity, giving it 22% upside

Citi recently named one under-the-radar company to buy on a “data and AI opportunity.”

Citi noted that the company said its total addressable market has increased three times, thanks to its artificial intelligence opportunity.

— Weizhen Tan

Inflation still ‘irritatingly high,’ says Bankrate’s Hamrick

With the consumer price index showing inflation slightly eased in April, the “lack of a nasty surprise” was welcome, unlike March’s disappointingly high readings, said Mark Hamrick, senior economist at Bankrate.

That said, interest rates will still remain higher for longer, he noted.

“With the 3.4% year-over-year headline increase and 3.6% in the core (excluding food and energy), these remain irritatingly high,” Hamrick said. “The status of the battle against inflation requires that interest rates remain elevated in the near-term.”

— Michelle Fox

CNBC Pro: India’s mid-cap stocks are in a ‘bubble’, says investor — and names the only stock he owns

India’s mid-cap stocks are in a “bubble” despite the country’s promising economic prospects, according to contrarian fund manager Jonathan Pines.

Pines, who runs Federated Hermes’ $3.1 billion Asia ex-Japan fund, believes there is a disconnect between the nation’s growth potential and the current stock market valuations.

The contrarian fund manager pointed to a mid-cap stock that’s risen by 240% despite sales and earnings declining.

However, he also named the only Indian stock he owns, saying “relative to everything else in India, that’s fantastic value”.

— Ganesh Rao

European markets: Here are the opening calls

European markets are expected to open higher Thursday.

The U.K.’s FTSE 100 index is expected to open 22 points higher at 8,442, Germany’s DAX up 26 points at 18,896, France’s CAC 7 points higher at 8,244 and Italy’s FTSE MIB up 64 points at 35,091, according to data from IG.

Earnings are due from Swiss Re, Zurich Insurance, Siemens, Deutsche Telekom, BT and EasyJet, among others. There are no major data releases.

— Holly Ellyatt

Source : cnbc