Stocks, news, data and the Fed rate decision

Oil and Gas Inventories were down 1.04% from the previous session at 10:42 AM London time.

BP, Shell and TotalEnergies were among the companies trading lower as Brent crude futures fell 2.06% to $73.78 a barrel, with WTI down 2.12% to $70.14 a barrel.

On Tuesday, the two benchmarks recorded their biggest one-day percentage drop since early January, according to Reuters data, hitting their lowest since late March.

Michael Kretschmer, the state premier of Saxony, says the EU can no longer focus solely on its internal market.

Shares of Milan-based UniCredit were up 6.6% at 8:47 a.m. London time as investors worried about it. First quarter resultswhich showed net revenue growth of 56.5% and estimates outperforming net interest income.

The bank has also revised its guidance for the full year and raised the amount it expects to pay out to investors.

France’s BNP Paribas moved from a narrow loss to a gain of 0.25% following its own results, despite doubling its earnings year-on-year and outperforming revenue.

BNP Paribas CFO Lars Macchenel told CNBC that the results showed a “strong balance sheet” and would form the bedrock for future growth.

The European banking sector rose 1.06% despite the aggressive sell-off of regional US banks on Tuesday.

Britain’s stock market rules could be drastically simplified as part of efforts to attract listings of major companies to London, under detailed plans revealed by the country’s financial watchdog.

The Financial Conduct Authority has proposed replacing Britain’s ‘premium’ and ‘standard’ listing tranches with a single category, as part of a package of reforms designed to streamline the country’s listing rule book.

“We want to encourage more companies to list and grow in the UK, against other highly competitive international markets,” said Nikhil Rathi, FCA’s chief executive.

Read the full story here.

– Reuters

Danish jewelry maker Pandora mentioned Sales growth of 1% in the first quarter, better than the analyst consensus of -1%, as EBIT margin fell from 23% to 21.1%.

“If you think about the macroeconomic backdrop, consumer sentiment, recession fears…we know that the jewelry market is actually in a negative place. As we continue to post positive numbers. That’s why we think it’s a very good result,” CEO Aleksander Lasik told the program. “Squawk Box Europe” on CNBC.

He said consumer sentiment was broadly unchanged from a year ago, although Europeans are starting to be more optimistic than American shoppers.

“Overall, I think what we are still looking forward to is a very uncertain future,” Lasek said.

French bank BNP Paribas saw its profits more than double in the first quarter.

CNBC’s Charlotte Reed speaks to BNP Paribas CFO Lars Macchenell.

Jefferies expects global commercial real estate stocks to rise more than 60% over the next 12 months.

The investment bank’s predictions come at a time when the global commercial real estate market has witnessed a sharp decline in prices over the past year.

However, the real estate company is expected to survive the economic downturn as it doubled the rent it charged tenants and vacant office space in its target area fell last year.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Monday’s stock market slide may have shown that investors have finally tempered their optimism that the Federal Reserve will cut interest rates later this year to offset the economic slowdown.

“[T]Bank of America global economist Ethan Harris wrote in a note: Markets may be too optimistic about how easy it will be to get inflation back on target and would be surprised when the Fed doesn’t cut interest rates in the face of a mild recession. to customers before the markets open on Monday.

Simply put, investors have bid on stocks since mid-March on the belief that the Fed will pivot policy, cutting interest rates by half a percentage point in response to a shallow recession, Bank of America said.

Unfortunately, the bank says, such hopes will fade. “We see four risks this summer: an ugly battle for the debt ceiling, a major tightening of bank credit, a geopolitical event, and disappointingly hawkish central banks. The plan for many central banks, in our view, is to raise interest rates to a moderately restrictive area,” Harris wrote. Then keep it there to finish the job of returning the inflation to the target. So a moderate recession in the United States – and steady growth in other major economies – will not lead to an immediate policy response.”

– Scott Schneiber

Prices of lithium, a key material used in electric vehicle batteries, rebounded for the first time in months.

Analysts were generally bullish on the sector over the long term.

For investors looking to play in the electric vehicle-related sector, CNBC examined lithium and battery stocks with Buy ratings from over 70% of the analysts covering them, and an average price target of at least 15% upward.

CNBC Pro subscribers can read more here.

– Wizen tan

Goldman Sachs said investors were not fully moved after the banking crisis in March as bank stocks fell on Tuesday. The company’s analysts noted that in the wake of the failure of Silicon Valley Bank and Signature Bank in March, market fears were quickly alleviated by an infusion of deposits into First Republic Bank.

Since bottoming out at 3,808 on March 13, the S&P 5000 is up nearly 10%. [as of] Several Goldman analysts wrote in a note on Tuesday, “Monday evening on the back of quiet bank jitters, as well as a strong earnings season (so far) and a growing consensus that the Fed will soon halt its year-round cycle of rate hikes.”

Today, however, it appears that we are seeing some of the concerns of March return after JPM announced its acquisition of FRC on Monday. Shares of regional banks fell 4% to 13%. [Managing director Richard] Ramsden sees the acquisition of JPM as cumulative and notes that the deal highlights that it will allow G-SIBs to bid on FDIC transactions even if they are above the filing cap.

– Hakyung Kim

Eric Rosengren thinks his former Fed colleagues will make a mistake if they raise interest rates again on Wednesday.

The former Boston Fed president, who retired from the board in September 2021, told CNBC on Tuesday that turmoil in the banking industry and an economic slowdown should prompt policymakers to end the interest rate hike campaign that began in March 2022.

“My own view is that it is very likely that the economy will slow in the second half of the year and that it is not necessary at this point to raise interest rates until we get a better view of what the second half of the year looks like,” Rosengren said on “The Squawk Fund.”

Futures market traders are pricing in a 96% chance that the Federal Open Market Committee will agree to raise interest rates by a quarter of a percentage point when the two-day meeting ends, according to CME Group’s FedWatch tracker.

– Jeff Cox

European markets are heading for a higher open on Wednesday ahead of the US Federal Reserve’s monetary policy decision.

Britain’s FTSE 100 is expected to rise 22 points at 7,792, Germany’s DAX is up 58 points at 15,771, France’s CAC is up 36 points at 7,408, and Italy’s FTSE MIB is up 81 points at 26,501, according to data from IG.

Profits are set to come from Lloyds Banking Group, Aston Martin Lagonda, BNB, Airbus, Stelantis, Deutsche Post DHL and Lufthansa. The Eurozone Unemployment figure for March is also due.

– Holly Ellytt