Investors assess the path of interest rates

Stocks in motion: Verbund up, Fuchs down

Austrian electricity supplier Verbund remained the best climber among European stocks, up 8.2%.

German lubricants maker Fuchs posted the biggest decline, down 4.6%.

The Stoxx 600 was generally bullish, driven by retail stocks up 2.2%.

—Jenni Reid

Stocks in motion: Verbund up 9%, Fuchs Petrolub down 4%

Austrian hydropower producer Verbund saw its shares soar more than 9% by mid-afternoon to top the Stoxx 600 after the Austrian government announced plans for a temporary windfall tax of up to 40% for companies oil and gas and power companies. The tax can be reduced to 33% if companies make green investments.

At the bottom of the index, shares of German lubricants maker Fuchs Petrolub fell 4%.

-Elliot Smith

Regulatory pendulum ‘about to swing too far’, says Deutsche Bank CEO

The CEO of German Bank told audiences at the European Banking Conference that he feared the “pendulum” of financial regulation was “about to swing too far”.

Speaking in Frankfurt, Christian Sewing said banks would have made less progress in recent years had it not been for the regulations established after the financial crash, but now was the time for regulators to examine where “it might have gone too far”. .

Sewing also said Europe could lose its position as the world leader in sustainable finance if regulation continues “as it has”.

—Hannah Ward-Glenton

Commerzbank CEO Manfred Knof says the bank is not preparing for disaster, but a mild recession

Commerzbank CEO Manfred Knof said the bank had prepared for a “mild recession” and that he expects an increase in non-performing loans, but it is “definitely not a a catastrophe or a fault problem”.

“We have already made arrangements, but at the moment we don’t see a lot of problems ahead of us,” Knof told CNBC’s Annette Weisbach at the European Banking Congress in Frankfurt on Friday.

Knof also said regulators, politicians and corporate banks have acted in a way that gives him “optimism” that the sector can handle the current economic climate.

—Hannah Ward-Glenton

UK retail sales partially rebounded in October, but outlook remains bleak

UK retail sales rose 0.6% month on month in October, beating expectations and partially recovering from a 1.5% decline in September.

The Office for National Statistics said retail sales volumes remained 0.6% below their pre-pandemic levels, while non-fuel retail sales rose less than expected, underscoring hesitation from consumers in the face of soaring inflation and an already ongoing recession, according to the Office for Budget Responsibility.

The OBR predicted on Thursday that the UK will suffer its biggest drop in living standards on record over the next two years.

“With the holiday season fast approaching, many people have already reduced the volume of their in-store food purchases and will continue to review their food and clothing purchases, as well as limit their gift lists,” said Farah Thalji, director of the consulting firm Simon-Kucher & Partners.

“While we have seen a return to in-store shopping in recent weeks, in-store and online outlets will struggle to get consumers to part with their cash as discretionary income is expected to decline further. “

-Elliot Smith

Stocks in motion: Verbund up 8%, Unibail-Rodamco-Westfield down 4%

Austrian public service Verb gained 8% in early trading to top the Stoxx 600, while French commercial property company Unibail-Rodamco-Westfield fell 4% to the bottom of the index.

Rate hikes have had ‘limited effects’ on inflation so far, says Fed’s Bullard

Comments by St. Louis Federal Reserve Chairman James Bullard on Thursday hurt confidence among investors who had hoped to see the central bank pull back from interest rate hikes.

He said the Fed still has work to do before inflation is brought under control, while delivering remarks focused on the importance of using rules-based approaches when making policy. He is a voting member of the Federal Open Market Committee, which sets rates.

“So far, the change in monetary policy stance appears to have had only limited effects on observed inflation, but market prices suggest disinflation is expected in 2023,” he said. he declares.

—Jeff Cox, Alex Harring

UK announces £55billion in tax hikes and spending cuts as country faces biggest drop in living standards on record

Britain’s Finance Minister Jeremy Hunt unveiled a sweeping £55bn ($66bn) fiscal tightening plan on Thursday, including a series of tax hikes and spending cuts as he tries to fill a major hole in the country’s public finances.

The planned spending cuts of £30billion and tax hikes of £25billion come even as the Independent Office for Budget Responsibility (OBR) has confirmed that the UK economy is now in recession and is expected to contract by 1.4% next year.

The OBR also said the UK would suffer its biggest drop in living standards since records began, erasing nearly a decade of growth in real household disposable income by 2024.

-Elliot Smith

Here are the opening calls

Great Britain FTSE100 is expected to rise about 14 points to 7,361, Germany DAX should add around 55 points to 14,321 and France CAC 40 is seen climbing around 43 points to 6,619.

CNBC Pro: ‘The bullish case for the semis is compelling’: BofA picks best chip stocks to buy

Chip stocks, once popular with investors, are doing poorly this year.

But BofA says that despite consumer demand remaining under pressure, “the bullish case for the semis is also compelling.”

Semiconductor sales could rebound in the second half of 2023, BofA predicted.

Here are some themes that the bullet stocks could build on, says the bank, which also chooses which names to buy.

CNBC Pro subscribers can learn more here.

—Weizhen Tan

CNBC Pro: As Muddy Waters bets against dLocal, here are the other fintech stocks short-sellers are eyeing

Stephen V. Lee