European markets are flat as global investors await the Fed
European markets were muted on Wednesday as fresh comments from a US Federal Reserve policymaker kept investors on edge.
The pan-European Stoxx 600 index was flat in early trade, with telecoms losing 0.5% while home goods gained 0.2%.
– Elliot Smith
Morgan Stanley says the ‘smart’ electric vehicle industry is the next big thing in technology. Here are their top stock picks
Morgan Stanley says technology supply chains are poised to experience growth in the next big thing: smart technology features, from electric vehicle batteries to chips and self-driving technology.
The investment bank named its top stock picks that will benefit from this trend.
Professional subscribers can read the story here.
– Weizhen Tan
The Fed’s Kashkari says his biggest fear is that inflation will be more persistent or hotter than expected
Minneapolis Federal Reserve Bank President Neel Kashkari says his biggest fear is that markets are underestimating how high or persistent inflation would be, adding that the Fed would have to be more aggressive than expected.
“The big fear in the back of my mind is if we get it wrong and the markets get it wrong, and that inflation is much more embedded at a much higher level than we appreciate or the markets appreciate,” he said, commenting about the market Inflation expectations will return to 2% in the next two years.
“Then we’re going to have to be more aggressive than I anticipate, probably for longer, to get inflation back down,” he said at an event at the University of Pennsylvania.
Kashkari also noted that supply shocks drive “half to two-thirds” of the country’s high inflation.
“The more supply-side help we get, the less the Fed will have to do and the better we can avoid a hard landing,” he said. He added, however, that there is some evidence that supply chains are beginning to normalize.
Kashkari is already considered the most hawkish of the 19 US central bank policymakers, and expects the Fed to raise its policy rate, now in a target range of 2.25% to 2.5% , another two full percentage points by the end of next year. .
– Jihye Lee
CNBC Pro: Citi calls energy stock with ‘strongest balance sheet’
The energy sector has been a big winner in this year’s volatile stock market.
But one stock still stands out for its “strongest balance sheet,” according to Citi. It also delivered a set of second-quarter earnings that easily beat its major listed peers.
Professional subscribers can read the story here.
— Xavier Ong
Hawkish Fed?
Many expect Fed officials to talk tough later this week, which could trigger a selloff in risk assets. Some fear that continued and aggressive central bank tightening will tip a slowing economy into a recession.
“I fully expect Fed Chairman Jay Powell and other Fed officials to remain on the phony side,” Invesco chief global market strategist Kristina Hooper said in an email. “The bullish rhetoric is very likely to push global stocks lower in the short term as markets are walking on eggshells, so asset owners should be prepared for short-term volatility time limit”.
— Yun Li
Nordstrom shares fall
Nordstrom shares fell more than 13% in extended trading after the company cut its full-year financial forecast. Nordstrom said it is being challenged by excess inventory as well as slowing demand.
“Customer traffic and demand slowed significantly in late June, primarily at Nordstrom Rack,” CEO Erik Nordstrom said in a press release.
However, the company reported fiscal second-quarter earnings and sales ahead of analysts’ estimates.
— Yun Li