UniCredit’s CEO says Europe could defy the odds and avoid recession
The latest data indicate that the euro zone could defy the odds and avoid recession, says Andrea Orcel, CEO of the Italian bank UniCredit.
“Our view was a mild recession for this year, but since then, if we look at all the indicators that we’re seeing, we’re probably seeing downside risk, so we’re looking at something that might not even be a recession,” Orzel told CNBC at the World Economic forum in Davos, Switzerland.
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– Elliot Smith
Stocks on the move: Just Eat Takeaway up 15%, ASMI up 8%
Just eat takeout shares jumped 15% in early trade on Wednesday after the Dutch food delivery company reported second-half earnings and pledged to prioritize profitability over growth going forward.
Earth Semiconductor Company ASMI rose more than 8% after beating expectations for fourth-quarter earnings due to improved supply chain conditions.
UK inflation rate falls for second month in December
The UK’s annual inflation rate fell again in December to 10.5% — slightly below analysts’ expectations.
It was the second straight month of declines, after the rate fell from a 41-year high to 10.7% in November.
The UK Office for National Statistics said the biggest contributors to the change “came from transport (especially motor fuels), clothing and footwear, recreation and culture, with rising prices in restaurants and hotels, and food and soft drinks making the biggest partially offsetting contributions upwards”.
CNBC Pro: Morgan Stanley says cheaper electric vehicles are coming — and names the global stocks that will benefit
As electric cars become more popular, a new manufacturing technique that could make them more affordable is generating interest, according to Morgan Stanley.
Some automakers are outsourcing a process that could benefit three of Asia’s leading parts suppliers, a Wall Street bank said.
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— Ganesh Rao
Oil prices are rising due to more optimism in China and the reopening of demand
Oil prices are supported by future optimism for China’s reopening and fuel demand, with OPEC predicting that Chinese oil demand is on track to rebound.
Brent crude futures were up 0.85% at $86.65 a barrel, while U.S. West Texas Intermediate futures were up 0.91% at $80.91 a barrel.
“Chinese oil demand is on track to recover due to the recent easing of zero-covid measures,” OPEC’s monthly oil report said.
It added that China’s first-quarter oil demand will recover from an annual decline of 0.3 million bpd year-on-year in the fourth quarter of 2022 to an annual growth of 0.2 million bpd.
– Lee Ying Shan
CNBC Pro: Thinking about getting back into Big Tech? This investor is particularly cautious with 2 stocks
Bank of America sees a later onset of the recession
A recession likely won’t start now until later in 2023, as spending is stronger than expected and the Federal Reserve eases the pace of interest rate hikes, according to Bank of America.
“We are shifting the timing of our outlook for a mild recession in the U.S. economy by about one quarter given the durability of consumer spending due to strong labor markets, excess savings, falling energy prices and easier financial conditions,” the company said in a client note. “Even so, we think headwinds will lead consumers to cut back on spending and increase their savings rate as the year progresses.”
That leads to a recession in the second quarter, driven by an investment-driven slowdown that leaks into consumer spending.
After raising its benchmark borrowing rate by 4.25 percentage points in 2022, the Fed is expected to pull back, with a 0.25 percentage point increase in February. This is forecast to be followed by a further quarter-point increase in March and May.
A rate cut likely won’t come until 2024, the company said.
— Jeff Cox
European markets: Here are the initial calls
European markets are headed for a mixed opening on Wednesday as investors remain uncertain about the economic outlook, a topic high on the agenda at the World Economic Forum in Davos this week.
of the UK FTSE 100 The index is expected to open 12 points lower at 7,832, German DAX by 31 points to 15,203, France CAC increased by 19 points to 7,085 and Italy FTSE MIB by 37 points to 25,982, according to IG data.
CNBC will speak to a range of delegates at the World Economic Forum on Wednesday, including the CEOs of UniCredit, Infosys, Nokia, Aramco and Credit Suisse, as well as the finance ministers of Greece and Poland and the foreign minister of Saudi Arabia, among many others. Follow our coverage here.
— Holly Elliott