Stocks, news, current PMI data, earnings

Stocks on the move: Topdanmark up 3%, Ambu down 4%

Danish stocks were the biggest movers in both directions at the open on Tuesday.

Insurer Topdanmark added 3.7% to lead the Stokk 600 after its fourth-quarter earnings report and dividend proposal, while hospital equipment maker Ambu fell 4.6% after SEB downgraded the stock to “sell” from “hold”.

El-Erian says Fed should hike 50 basis points, calls smaller increase ‘mistake’

Inflation has shifted from the commodity to the service sector, says Mohamed El-Erian

Rising inflation may be largely in the past, but moving to a 25-basis-point hike at the Federal Reserve’s next policy meeting is a “mistake,” says Allianz chief economic adviser Mohamed El-Erian.

“I’m in a very, very small camp that thinks they shouldn’t go down to 25 basis points, they should go down to 50,” he told CNBC’s “Squawk Box” on Monday. “They should take advantage of this growth window that we’re in, they should take advantage of the market and they should try to tighten financial conditions because I think we still have an inflation problem.”

Inflation, he said, has shifted from goods to the services sector, but could very well rise again if energy prices rise as China reopens.

El-Erian expects inflation to plateau at around 4%. This, he said, will put the Fed in a difficult position as to whether they should continue to destroy the economy to reach 2% or promise that level in the future and hope that investors will tolerate a stable 3% to 4% in the near term. .

“That’s probably the best outcome,” he said of the latter.

— Samantha Subin

CNBC Pro: Wall Street is excited about Chinese tech — and it loves one mega-cap stock

After more than 2 years of regulatory measures and a pandemic-induced slump, Chinese tech names are back on Wall Street’s radar, with one stock in particular standing out as a top pick for many.

Pro subscribers can read more here.

— Xavier Ong

The Fed is likely to discuss when it will halt hikes next week, the Journal report said

Federal Reserve officials next week are all but certain to approve another slowdown in interest rate hikes, while also discussing when to halt those hikes altogether, according to a Wall Street Journal report.

The rate-setting Federal Open Market Committee is scheduled to meet Jan. 31-Feb. 1, with the market pricing in a nearly 100% chance of a quarter-point increase in the central bank’s benchmark rate. Most notably, Fed Governor Christopher Waller said on Friday that he sees a 0.25 percentage point hike as the preferred move for the upcoming meeting.

However, Waller said he did not think the Fed was done tightening yet, and several other central bankers in recent days have backed the idea.

The Journal report, which cites public statements from policymakers, said the slowdown in the pace of increases could provide an opportunity to gauge what impact past increases are having on the economy. The series of rate hikes that began in March 2022 resulted in an increase of 4.25 percentage points.

Market prices currently point to a quarter-point increase over the next two meetings, a no-action period, and then a half-point decrease by the end of 2023, according to CME Group data.

However, several officials, including Gov. Lael Brainard and New York Fed President John Williams, used the phrase “stay the course” to describe the policy path ahead.

— Jeff Cox

European markets: Here are the initial calls

European markets are headed for a positive opening on Tuesday ahead of flash PMI (purchasing managers’ index) data for the Eurozone in January.

of the UK FTSE 100 The index is expected to open 10 points higher at 7,801, German DAX 18 points higher at 15,122, France CAC increased by 12 points to 7,049 and Italy FTSE MIB increased by 81 points to 25,945, according to IG data.

No big earnings announcements on Tuesday.

— Holly Elliott

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