European stocks flat; oil and gas sheds 2.6%
European stocks ended the day flat on the previous session, although the oil and gas sector led losses with a 2.6% fall.
Among individual stocks, the UK’s Virgin Money was the top performer, gaining 15% after reporting higher profits for 2022 and a £50 million ($59.4 million) share buyback programme.
At the other end of the scale, Scottish oil and gas firm Harbor Energy dropped 8.5%. In recent days it has said the recently-announced extension of the UK windfall tax on energy companies may impact its business.
Italy’s new PM to unveil budget
The first budget overseen by Italian Prime Minister Giorgia Meloni is due to be approved by her cabinet Monday night, before being sent to parliament.
It is set to total more than 30 billion euros ($30.8 billion) in expansionary measures, Reuters reported, increasing next year’s budget deficit to 4.5% of gross domestic product (GDP) from 3.4% forecast in September.
Around 3 billion euros will be found through a windfall tax on energy profits. The budget is also set to include a tax on home deliveries to help shopkeepers, and more than 21 billion euros to help households and businesses with energy bills.
Stocks mixed at market open Monday
Stocks were mixed Monday morning at the start of a short trading week for the Thanksgiving holiday.
The Dow Jones Industrial Average surged at the market open, trading up more than 100 points, or 0.30%, led by Disney. Shares of the entertainment company popped more than 8% after it announced that former CEO Bob Iger will replace Bob Chapek immediately.
Elsewhere, stocks slumped as investors look ahead to more earnings reports and speeches from Federal Reserve leaders this week. The S&P 500 fell 0.20% and the Nasdaq slipped 0.26%.
Stocks on the move: Virgin Money up 14%, Ocado down 7%
Virgin Money shares jumped more than 13% to lead the Stoxx 600 by mid-afternoon after the company reported a rise in pretax profit for the 2022 fiscal year and announced a £50 million ($59.4 million) share buyback program.
At the bottom of the European blue chip index, British online grocer Ocado fell more than 7%.
FTX is ‘not idiosyncratic,’ investment advisory firm says
Paul Gambles of MBMG Group says there are more shock waves to come for the cryptocurrency industry and warns that liquidity is drying up.
Excess liquidity in the tech sector must be removed, says investment management firm
Dan Scott of Vontobel Asset Management discusses layoffs in the tech sector.
German October wholesale inflation well below expectations
Germany’s Producer Price Index came in at -4.2% month-on-month in October, the federal statistics office said Monday, well below a Reuters consensus forecast for a 0.9% increase.
On an annual basis, wholesale prices were up 34.5%, below expectations of a 41.5% incline.
Stocks on the move: Virgin Money up 13%, IDS down 5%
Virgin Money Shares jumped more than 13% to lead the Stoxx 600 in early trade after the company reported a rise in pretax profit for the 2022 fiscal year and announced a £50 million ($59.4 million) share buyback program.
At the bottom of the index, shares International Distribution Services — trading as Royal Mail — fell 5% as the company faces further waves of damaging industrial action from workers over the holiday season.
Oil prices drop as China faces Covid concerns, Goldman Sachs cuts forecast
Oil prices fell by nearly a dollar as Covid concerns in China rose with the nation seeing the first virus-related deaths recorded since May this year.
Brent crude futures shed less than a dollar, or 0.9%, to stand at $86.83 per barrel and US West Texas Intermediate futures dropped 1.09% to $79.21 per barrel.
Goldman Sachs cut its forecast for Brent oil by $10 to $100 per barrel for the fourth quarter of 2022, citing dented China demand with rising Covid concerns and insufficient details from the latest Group of 7 nations’ price cap on Russian oil.
“We believe the market has a right to be anxious about forward fundamentals,” economists including Jeffrey Currie said in the note, adding the potential for further lockdowns in China is equivalent to the latest production cut by OPEC+.
Lee Ying Shan
CNBC Pro: Strategist says Chinese tech stocks, like Alibaba, are ‘deeply undervalued’
This year’s 30% decline in the value of Chinese Big Tech stocks, such as alibabahas made them “incredibly cheap,” according to investment bank China Renaissance.
Its head of equities, Andrew Maynard, not only believes that the stock market appears to have bottomed, but also that investors may miss out on a rally if they remain underweight on China.
“Without a shadow of a doubt, being underweight China is going to cost you going forward,” Maynard said.
CNBC Pro subscribers can read more here.
Markets are watching for more clues on Fed hikes and the economy in the week ahead
Investors may be a bit more cautious in the week ahead, with stocks seeking direction in quiet trading and the bond market’s warnings about recession getting louder.
The Thanksgiving holiday on Thursday should mean markets will likely be quiet Wednesday and Friday. Traders will be monitoring reports on Black Friday holiday shopping for feedback on the consumer.
“It’s really a week where data dependence is the key phrase,” said Julian Emanuel, senior managing director at Evercore ISI. “The Bias” [for stocks] is higher unless data continues to deteriorate and the Fed stays on its hawkish slant… which has clearly been reinforced in the last 48 hours.”
Check out our full deep dive on what to expect in the week ahead here.
— Patti Domm, Tanaya Machel
CNBC Pro: Morgan Stanley’s Mike Wilson predicts the S&P 500’s bottom, calls it a ‘terrific buying opportunity’
Morgan Stanley’s Chief US Equity Strategist Mike Wilson says we’re in the “final stages” of the bear market, but the situation will remain challenging for a while longer.
He predicts when—and at what level—the S&P 500 will hit a “new low.”
CNBC Pro subscribers can read more here.
European markets: Here are the opening calls
European markets are set to open lower on Monday as investors continue to monitor the uncertain economic outlook.
The UK’s FTSE index is expected to open 15 points lower at 7,386, Germany’s DAX down 54 points at 14,378, France’s CAC down 17 points at 6,629 and Italy’s FTSE MIB down 54 points at 24,445, according to data from IG.
There are no major earnings Monday. Data releases include German producer prices for October.