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Euro zone GDP, Fed meeting in focus

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Euro zone economy posts surprise expansion in the fourth quarter, curbing recession fears

The euro zone grew 0.1% in the last quarter of 2022, according to preliminary Eurostat data released Tuesday.

Energy prices cooled off in the latter part of the year, bringing some relief to the euro zone’s broader economic performance.

The latest figures come after the euro area posted a 0.3% GDP increase for the third quarter.

Germany surprised to the downside at a country breakdown level. The biggest European economy contracted by 0.2% in the last quarter of 2022, with analysts now expecting Berlin will head into a recession.

— Silvia Amaro

UK grocery price inflation hits a record 16.7%

U.K. grocery price inflation hit a record 16.7% in the four weeks to January 22, an increase of 2.3% on the previous month, market research firm Kantar said Tuesday.

The figure, the highest since the company started tracking data in 2008, marks a further exacerbating of the country’s cost-of-living crisis, which has seen shoppers trade in branded food products for own-brand labels and discount retailers.

Consumers have been feeling the pinch from higher food prices as inflation soars.

Nathan Stirk | Getty Images News | Getty Images

“We thought inflation was coming down; the fact it’s gone back up isn’t great news,” Fraser McKevitt, head of retail and consumer insight at Kantar, told CNBC. Grocers have been “boosting their own-label ranges especially, with sales of these lines growing consistently over the past nine months.”

Own-label lines grew by 9.3% over the period, while discount retailers Aldi became the fastest growing grocer for the fourth month in a row, just ahead of Lidl.

— Karen Gilchrist

Recession in Europe and U.S. still very possible, portfolio manager says

Data published Tuesday showed economic growth in France slowed from 0.2% to 0.1% in the fourth quarter, while retail sales in Germany unexpectedly fell in December.

Joost van Leenders, senior portfolio manager at Kempen Capital Management, told CNBC these and other indicators meant the picture going into 2023 was “not that strong” and the possibility of recession in Europe and the U.S. was “still firmly on the agenda.”

— Jenni Reid

Stocks on the move: UniCredit up 7.5%, Rheinmetall down 6%

UniCredit was the top performer in early trade, rising 7.5% after the bank promised to dish out 5.25 billion euros ($5.69 billion) to shareholders following bumper profits.

German arms manufacturer Rheinmetall dropped 6% despite yesterday announcing it had won a U.S. Army contract, alongside General Motors, to supply up to 40,000 trucks valued at up to $14 billion.

— Jenni Reid

European markets open lower with eyes on GDP data, central bank meetings

Europe’s Stoxx 600 index opened 0.2% lower, extending Monday’s slide as investors prepared to chew over a euro zone GDP flash estimate.

Figures published early Tuesday from France, the bloc’s second-largest economy, showed growth slowed from 0.2% to 0.1% in the fourth quarter of 2022. That was nonetheless ahead of expectations.

Most sectors were in the red in early trade, led by financial services, down 0.8%.

However, banks gained 0.6% after UniCredit and UBS beat profit expectations.

Stoxx 600 one-week performance.

Also dominating markets this week are central bank rate hike decisions due from the U.S. Wednesday and from the U.K. and eurozone Thursday.

— Jenni Reid

UniCredit hikes payout goal by 40% after record profit

UniCredit pledged on Tuesday to return 5.25 billion euros ($5.69 billion) to investors after posting its best profit in over a decade.

The bank said net profit came in at 2.46 billion euros in the three months through December, more than twice an average forecast of 1.10 billion euros ($1.2 bln) from analysts polled by the bank.

UniCredit said it expected to post a net profit in 2023 broadly in line with 2022 including its Russian business, after it had excluded this from its profit goal last year following Russia’s invasion of Ukraine.

It has failed to extricate itself from Russia where it owns a top 15 lender.

UniCredit one-year share price.

Swiss bank UBS gets a boost from higher interest rates, beats expectations in fourth quarter

UBS’ fourth-quarter profit beat market expectations, but the Swiss banking giant reported a fall in revenues on the back of weaker client activity and warned of an “uncertain” year ahead.

The bank reported $1.7 billion of net income for the fourth quarter of last year, bringing its full-year profit to $7.6 billion in 2022. 

Looking ahead, the Swiss lender said that revenues for the first quarter of 2023 were set to be “positively influenced” by higher client activity and interest rates, as well as by the easing of Covid-19 restrictions in Asia.

However, it was cautious about the economic outlook more broadly, citing central bank activity as a potential catalyst for market volatility.

UBS said it will be purchasing more of its own shares this year.

Read the full story here.

— Silvia Amaro

European markets: Here are the opening calls

European markets are heading for a lower open Tuesday as investors focus on the next U.S. Federal Reserve meeting, which begins today. The two-day meeting will conclude Wednesday with an announcement of the central bank’s latest interest rate decision.

The U.K.’s FTSE 100 index is expected to open 26 points lower at 7,758, Germany’s DAX 79 points lower at 15,052, France’s CAC down 40 points at 7,049 and Italy’s FTSE MIB down 125 points at 26,260, according to data from IG.

Earnings come from Pets at Home, UBS and Spotify, and data releases include fourth-quarter euro zone gross domestic product data. Preliminary German and French inflation data for January is also due to be released.

— Holly Ellyatt

CNBC Pro: What one tech fund manager is expecting from Apple and Alphabet earnings this week

Microsoft issued a disappointing revenue forecast last week, but its stock has since increased. What does that mean for the other Big Tech companies set to report earnings?

Tech fund manager Jeremy Gleeson, who manages the £1.1 billion ($1.5 billion) AXA Framlington Global Technology Fund, said there was enough bad news in Microsoft’s earnings to “spook” investors into selling the stock.

However, the fact that the stock is up by more than 2% subsequently is an “encouraging” sign for the rest of Big Tech’s earnings, Gleeson told CNBC’s “Squawk Box Europe”.

He shared his thoughts on what to expect from Apple and Alphabet this week.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Tesla shares rose 30% last week. Here’s where Wall Street sees it going next

Just last week, the electric-vehicle maker’s stock leaped by more than 30% following its earnings announcement. This year so far, Tesla shares are up by around 44%.

It follows a bleak 2022 when Tesla shares slumped over 35% in December and around 65% over the year.

After all this volatility, here’s where Wall Street analysts see the stock going next:

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: Can Chinese stocks rally further? One investment bank thinks so — and names its top stock picks

The recovery in Chinese stocks gained steam on Monday, as China’s benchmark index came within striking distance of a bull market.

Bernstein’s analysts believe the rally has further to go and reveal their top stocks to play it.

Pro subscribers can read more here.

— Zavier Ong

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News from WEF, data and earnings

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Stocks on the move: Leonardo up 4%, Ocado down 8%

Shares of British digital grocer Ocado fell more than 8% in early trade to the bottom of the Stoxx 600 after the company missed fourth-quarter sales estimates as customers bought less per order ami the U.K.’s cost of living crisis.

At the top of the European blue chip index, Italian aerospace and defense company Leonardo added 4.5%.

CNBC Pro: This under-the-radar global carbon capture stock could soar by 65%, investment banks say

Shares of an under-the-radar carbon capture company are expected to rise by 65% due to increasing global demand for emissions reduction technology, according to investment banks analyzing the stock.

The company’s latest innovation, revealed last week, could cut the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at a German investment bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Where the major indexes stand coming off the first two weeks of 2023 trading

With the first two weeks of 2023 trading done, the three major indexes are up so far for the year.

The Nasdaq Composite is leading the way, adding 5.9% as investors bought beaten-down technology stocks on rising hopes of an improving landscape for growth holdings. The S&P 500 and Dow followed, gaining 4.2% and 3.5%, respectively.

— Alex Harring

China’s retail sales beat estimates, economy expands more than expected

China’s December retail sales beat estimates, falling only 1.8% on an annualized basis, significantly better than the decline of 8.6% projected in a Reuters poll.

Industrial output also grew 1.3% in December, higher than expectations for an increase of 0.2%.

In the fourth quarter, China’s economy expanded by 2.9% on an annualized basis, better than the expected 1.8% growth. While quarterly growth was flat, it still beat expectations for a 0.8% contraction.

Despite better-than-expected data, the Chinese offshore yuan weakened sharply from 6.7403 to 6.7563 against the U.S. dollar shortly after the release.

European markets: Here are the opening calls

European markets are heading for a flat to lower open Tuesday, with concerns about the global economy high on the agenda at the World Economic Forum in Davos this week.

The U.K.’s FTSE 100 index is expected to open 1 point higher at 7,862, Germany’s DAX 31 points lower at 15,111, France’s CAC down 14 points at 7,033 and Italy’s FTSE MIB down 37 points at 25,836, according to data from IG.

CNBC will be speaking to a range of delegates at the World Economic Forum on Tuesday, including the presidents of Spain, Latvia, Lithuania and Poland and the CEOs of Unilever, UBS, Allianz and Swiss Re, among many others. Follow our coverage here.

— Holly Ellyatt

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World Economic Forum kicks off in Davos

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Stocks on the move: Temenos up 7%, Hellofresh down 6%

Temenos shares gained more than 7% by mid-afternoon to lead the Stoxx 600 after the Swiss software company announced that CEO Max Chuard would step down.

At the bottom of the European blue chip index, German meal kit delivery company Hellofresh dropped 6% after Exane BNP Paribas downgraded the stock to “neutral” from “outperform.”

– Elliot Smith

It will be hard to find gas in the short term, Eni CEO says

Claudio Descalzi, CEO of Eni, discusses the three pillars of the energy industry.

Chinese consumer recovery will come later than expected, EIU says

Cailin Birch, global economist at The Economist Intelligence Unit, discusses the impact of China’s reopening on the global economy.

Stocks on the move: Temenos up 5%, Tecan down 4%

Temenos shares gained more than 5% in early trade to lead the Stoxx 600 after the Swiss software company announced that CEO Max Chuard would step down.

At the bottom of the European blue chip index, compatriot laboratory equipment maker Tecan Group fell 4% after Kepler Cheuvreux downgraded the stock from “buy” to “hold” and cut its target price.

– Elliot Smith

CNBC Pro: Want a Tesla alternative? Analysts and fund managers reveal their top EV stocks

CNBC Pro: Analysts love these 12 cheap stocks — and give one 70% upside

2022 was a bad year for many investors, with most stocks — especially tech — plummeting to levels not seen since 2008.

But there could be some opportunities in the chaos, with a number of companies trading at steeper discounts on a price-to-earnings basis than they have in recent history.

CNBC Pro screened for these names that are also Wall Street favorites.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Inflation outlook softens again, traders fully price in quarter-point rate hike

Declining inflation expectations from consumers is coinciding with expectations that the Federal Reserve is likely to step down the level of interest rate increases in a few weeks, and end them altogether soon.

The University of Michigan consumer sentiment survey on Friday showed the one-year inflation outlook down to 4%, the third straight monthly decrease and the lowest level since April 2021.

At the same time, traders assigned a 94.2% chance of a 0.25 percentage point interest rate increase on Feb. 1, when the Fed’s next two-day meeting concludes. That marks another a smaller move than the 0.5 percentage point hike in December, which itself was a deceleration from four straight 0.75 percentage point increases.

“Inflation expectations are well-anchored and improving as pricing pressures are weakening across many sectors. The Fed will likely hike by 0.25% at the upcoming meeting later this month,” LPL Financial chief economist Jeffrey Roach said. “We shouldn’t be surprised if the Fed starts talking about pausing in the near future.”

—Jeff Cox

European markets: Here are the opening calls

European markets are heading for a higher open Monday as investors gauge the inflation outlook globally after positive signs from U.S. data last week.

The U.K.’s FTSE 100 index is expected to open 10 points higher at 7,856, Germany’s DAX 84 points higher at 15,174, France’s CAC up 43 points at 7,063 and Italy’s FTSE MIB up 142 points at 25,895, according to data from IG.

Data releases include Germany’s ZEW survey of economic sentiment for January and preliminary Italian inflation figures for January. The World Economic Forum begins in Davos, Switzerland, on Monday.

— Holly Ellyatt

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stocks, news, data and earnings

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Stocks on the move: Euronav down 20%, Games Workshop down 5%

Shares of Euronav plunged more than 20% in early trade after Norwegian rival Frontline pulled out of a potential $4.2 billion merger with the Belgian oil shipping company.

British wargame manufacturer Games Workshop fell 5.6% after its half-year earnings report.

– Elliot Smith

CNBC Pro: Platinum prices are soaring. These buy-rated stocks with upside could be a way to cash in

Consumers see inflation, spending sliding over next year, according to New York Fed Survey

CNBC Pro: China’s reopening has gotten Wall Street excited. Here’s how the pros are playing it

Beijing’s sudden and rapid dismantling of its stringent Covid-19 controls after nearly three years has raised hopes that its battered economy could follow a similarly rapid pace of recovery.

From hotels and airlines, to “less obvious beneficiaries,” Wall Street analysts name their top Chinese and global stocks to play the reopening.

Pro subscribers can read more here.

— Zavier Ong

European markets: Here are the opening calls

European markets are heading for a lower open as investors gear up for more inflation data later this week, with U.S. consumer price data for December due Thursday.

The U.K.’s FTSE 100 index is expected to open 49 points lower at 7,676, Germany’s DAX 95 points lower at 14,698, France’s CAC down 52 points at 6,855 and Italy’s FTSE MIB down 204 points at 25,181, according to data from IG.

Data releases Tuesday include Dutch inflation figures for December and U.K. British Retail Consortium retail sales figures for December. Airbus will announce its annual commercial aircraft orders and deliveries.

— Holly Ellyatt

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Swiss central bank posts biggest loss in its 116-year history

The Swiss National Bank reported a loss of 132 billion Swiss francs ($143 billion) for the 2022 financial year, citing preliminary figures.

As a result it will not make its usual payouts to the Swiss government and member states, it said, with payments to its shareholders also set to be affected.

Of the losses, 131 billion francs came from its foreign currency positions and 1 billion from its Swiss franc positions

Karsten Junius, chief economist at Swiss bank J.Safra Sarasin, told CNBC that the central bank’s losses would not alter its monetary policy and he expected another 100 basis points of hikes, to 2%, this year.

Read the full story here.

Stocks are up at market open

The three major indexes traded up at market open as investors tried to build on Friday’s rally.

The Dow added 0.4% at 9:30 a.m. Meanwhile, the S&P 500 and Nasdaq Composite advanced 0.5% and 0.9%, respectively.

— Alex Harring

Eurozone unemployment stays at record low, despite economic slowdown

Unemployment across the eurozone remained at a record low in November, despite slowing economic growth across the region.

Joblessness stood at 6.5% in November, unchanged from October, according to data from Eurostat, totalling 10.97 million people.

The figure is the lowest is has been since records began in 1998, and is in line with economist forecasts published by The Wall Street Journal.

Unemployment is expected to rise in the first half of 2023 as recessionary pressures increase, and is likely to hit 7% by the middle of the year, according to FactSet, as reported by Reuters.

— Hannah Ward-Glenton

Lidl GB sales up 25% over Christmas; store expects customer base to keep growing

The U.K. arm of German discount supermarket Lidl reported sales were up 24.5% in the four weeks up to Christmas Day compared with 2021.

Over 1.3 million more customers shopped at Lidl in the week leading to Dec. 24 than in the previous year, the discounter said.

The store said it expects more customers to switch from other supermarket groups in 2023 as consumers continue to feel the effects of the cost-of-living crisis.

— Hannah Ward-Glenton

Alibaba leads gains in Hang Seng index, reopening-related stocks in focus

CNBC Pro: Goldman Sachs reveals the stocks set to benefit from an EV boom, giving one over 100% upside

Shares of legacy automakers and parts manufacturers will attract new investors as they transition toward electric vehicles and green technologies, according to Goldman Sachs.

As traditional auto companies grow their share of income from new carbon-neutral technologies, they’re likely to be gradually included in ESG funds and benefit from a share price boost, the Wall Street bank said.

The investment bank named 13 stocks that will benefit from the new trend, including one it gives over 100% upside:

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Evercore’s Mark Mahaney reveals his top tech picks for 2023 — and gives one nearly 200% upside

Top tech analyst Mark Mahaney has a positive outlook on tech stocks after a brutal year for the sector in 2022.

But investors should remain selective, according to the analyst, who revealed three top picks for 2023.

Pro subscribers can read more here.

— Zavier Ong

CNBC Pro: Bank of America just added these biotech stocks to its list of first-quarter picks

BofA has added a number of biotechnology stocks — a sector that is hot on Wall Street right now – to its list of top picks for the first quarter.

The bank identified the biotech stocks, as well as some medical technology companies, as part of its thematic investing picks, on themes it says are related to a “transforming world.”

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are heading for a positive open at the start of the new trading week.

The U.K.’s FTSE 100 index is expected to open 24 points higher at 7,723, Germany’s DAX 79 points higher at 14,689, France’s CAC up 32 points at 6,893 and Italy’s FTSE MIB up 91 points at 24,271, according to data from IG.

Data releases Thursday include the euro zone unemployment rate for November, French trade data for November and German industrial production for the same month.

— Holly Ellyatt

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Inflation euro zone December 2022 drops as energy costs ease

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Inflation in Europe has been impacted by higher energy prices and supply shortages. Analysts question how far central banks will go to bring inflation under control.

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Inflation in the euro zone dropped for a second consecutive month in December, but analysts do not expect it to spark a change in tone from the European Central Bank.

Headline inflation, which includes food and energy costs, came in at 9.2% year-on-year in December, according to preliminary data Friday from the European statistics agency, Eurostat. It follows November’s headline inflation rate of 10.1%, which represented the first slight contraction in prices since June 2021.

The euro area economy has come under immense pressure in the wake of Russia’s invasion of Ukraine in February 2022, with energy and food costs soaring last year. In an effort to battle rising prices, the European Central Bank increased interest rates four times in 2022 and said it is likely to continue doing so this year. The bank’s main rate currently sits at 2%.

Despite further signs that inflation is easing, analysts say it is too early to celebrate and do not expect a pivot from the region’s central bank.

Interest rates will “get to 3(%) and probably have to hold that all through the year even as the recession becomes more and more evident,” Hetal Mehta from Legal & General Investment Management told CNBC’s “Street Signs” Thursday.

It comes after ECB President Christine Lagarde struck a particularly hawkish tone in December: “We’re not pivoting, we’re not wavering, we are showing determination.” She added that the bank has “more ground to cover.”

The ECB cannot and will not base its policy decisions on highly volatile energy prices.

Carsten Brzeski

global head of macro, ING Germany

Speaking earlier this week, ECB Governing Council member and French Central Bank Governor Francois Villeroy de Galhau said interest rates might peak by this summer.

The ECB also said in December that it will start reducing its balance sheet in March at a pace of 15 billion euros ($15.8 billion) per month until the end of the second quarter. This step is also expected to address some of the region’s inflationary pressures.

At the time, the central bank forecast an average inflation rate of 8.4% for 2022, 6.3% for 2023 and 3.4% for 2024. The bank’s mandate is to work toward a headline inflation figure of 2%.

Earlier this week, data out of Germany showed inflation dropping from 10% in November to 8.6% in December.

Carsten Brzeski, global head of macro at ING Germany, said these numbers “are not a relief, yet, only a reminder that euro zone inflation is still mainly an energy price phenomenon.”

Energy costs have dropped in Europe in recent months. Natural gas prices, for instance, traded at around 72.42 euros per megawatt hour on Friday — sharply lower than their peak of 349.90 euros per megawatt hour in August.

Among inflation components, energy continued to represent the biggest driver in December, but came off from previous levels. Energy costs dropped from 34.9% in November to an estimated 25.7% in December, according to the latest figures.

“The ECB cannot and will not base its policy decisions on highly volatile energy prices. Instead, the central bank will, in our view, hike interest rates at the next two meetings by a total of 100 basis points,” Brzeski said in a note.

Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics, also said in a note this week that he sees “little relief” in the inflation data, “which will keep the ECB on alert at the start of the year.” He expects two rate hikes of 50 basis points in the first quarter.

In terms of national breakdown, the Baltic nations once again registered the highest jumps in inflation, with a rate of about 20%.

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Stock futures dip slightly as investors digest Fed minutes, look ahead to labor data

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Traders work on the floor of the New York Stock Exchange (NYSE) on November 11, 2022 in New York City. 

Spencer Platt | Getty Images

Stock futures were slightly lower early Thursday morning as investors looked beyond the hawkishness of the Federal Reserve’s meeting minutes released in the afternoon toward labor data coming later this week.

Futures tied to the Dow Jones Industrial Average lost 101 points, trading down around 0.3%. S&P 500 and Nasdaq 100 futures both also traded down 0.29% and 0.36%.

The moves follow a choppy trading session. Markets had been down early in the day on the back of a mixed bag of economic data, but stock rose into the closing bell. The Dow ended the day up 133 points, or 0.4%, while the S&P 500 and Nasdaq added 0.8% and 0.7%, respectively.

November’s Job Openings and Labor Turnover, or JOLTS, report showed the job market remained strong, bolstering concerns that the Fed could continue raising interest rates as long as there remained a hot market for workers. But the ISM manufacturing index showed the sector was contracting after 30 months of expansion, which investors saw as a positive indicator that previous rate hikes had the intended impact of cooling the economy.

Stocks were mainly trading up in the afternoon. But gave up some of their gains following the release of minutes from the Fed’s December meeting, which showed the central bank remained committed to higher interest rates for “some time.”

Investors have “wounds that are still fresh” following 2022, which brought the worst year for the stock market since 2008, said Keith Buchanan, a portfolio manager at GLOBALT Investments. He said investors are attempting to balance what each new piece of economic data or Fed commentary can indicate with broader concerns about the future.

“Every day that goes by and we get a data point that’s moving in the right direction, it’s positive,” Buchanan said. “But it’s also quickly followed up with apprehension on how sensitive and delicate this moment is.”

Investors will watch Thursday for more data on jobs, the trade deficit and business activity. Fed speakers Raphael Bostic and James Bullard are also both slated to speak.

On Friday, investors will review data on nonfarm payrolls, the unemployment rate and hourly wages. Since the report could have a big impact on the Fed’s next moves, it has the potential to impact the market. Investors don’t want to see big gains in wage growth.

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European markets advance as investors await Fed minutes

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French inflation slows unexpectedly

The skyline from the Arc de Triomphe in Paris, France.

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Inflation in France slowed to 6.7% in December from a record high of 7.1% the previous month, preliminary figures published Wednesday morning showed.

Economists polled by Reuters had forecast year-on-year harmonized inflation, which is adjusted for comparisons across the euro area, to come in at 7.2%.

The most significant drop was in energy, where prices rose by 15.1% annually, down from 18.4% in November.

That follows inflation slowing more than expected in Germany, which on Tuesday reported HICP falling to 9.6% from 11.3%; and in Spain, which last week recorded a fall to 5.8% from 6.7%.

Analysts are looking for indications that inflation has peaked in the euro zone’s main economies; and whether this will influence the European Central Bank, which previously said interest rates would need to go “significantly” higher.

Analysts at ING said the path to substantially lower inflation rates would not be easy and remained contingent on energy markets and agricultural challenges impacting food prices.

“[Germany’s] inflation numbers are not a relief, yet, only a reminder that eurozone inflation is still mainly an energy price phenomenon,” they said in a note. “The ECB cannot and will not base its policy decisions on highly volatile energy prices.”

Italy will report on inflation figures Thursday, followed by a flash estimate for the euro area on Friday.

— Jenni Reid

Swiss annual inflation at 2.8% in 2022

Swiss consumer prices added 2.8% year-on-year and eased by 0.2% on the month in December, the Swiss Federal Statistical Office said today.

It found Swiss inflation averaged 2.8% in 2022, up from 0.6% in 2021. It attributed the annual hike to higher costs for petroleum products, gas, cars and house rentals, which offset price declines for medicines and fixed-line and mobile communication.

Stocks on the move: BKW up 4%, Tenaris down 5%

Swiss power supplier BKW jumped 6% in early trade to lead the Stoxx 600 after projecting an “outstanding” full-year result for 2022.

Italian steel pipe manufacturer Tenaris fell 5% to the bottom of the European blue chip index.

– Elliot Smith

CNBC Pro: Analysts see these 10 global renewable energy stocks rising despite higher rates with one offering 50% upside

Skyrocketing energy costs have spurred investment in renewable energy across the world.

Swiss investment bank UBS named 10 prominent renewable energy players capitalizing on the trend and are set to outperform over the next year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Wall Street is bullish on this chip giant, with Morgan Stanley giving it 55% upside

The once-hot chip sector suffered in 2022, but Wall Street looks to be turning more optimistic on semiconductor stocks for the year ahead.

Recently, several pros have urged investors to take a longer-term view on the sector, given the importance of chips in several key secular trends.

Analysts named one stock in particular they’re bullish on, citing its earnings potential and future profitability.

CNBC Pro subscribers can read more here.

— Weizhen Tan

U.S. will avoid recession in 2023, Goldman Sachs says

Goldman Sachs has an out-of-consensus forecast for the U.S. economy in 2023.

“Our economists continue to believe that the US will avoid recession as the Fed successfully engineers a soft landing of the economy,” analysts wrote Tuesday.

“This out-of-consensus forecast partly reflects our view that a period of below-potential growth is enough to gradually rebalance the labor market and dampen wage and price pressures,” the note said. “But it also reflects our analysis that indicates that the drag from fiscal and monetary policy tightening will diminish sharply next year, in contrast to the consensus view that the lagged effects of interest rate hikes will cause a recession in 2023.”

In addition, the bank today raised its 4Q22 GDP growth forecast by 10bp to +2.1% on the back of a surprisingly strong November Construction Spending release

“The disconnect between the resilience of the US economy in 2022 and the downdraft experienced by stocks is has been a key narrative of the past year,” Goldman said. “And, whether this disconnect continues, or the economy matches the market downdraft, or the market rebounds in the wake of an economic soft landing may be at least part of the narrative of 2023.”

—Carmen Reinicke

CNBC Pro screens for low-volatility stocks amid fears of a bumpy ride ahead

Stock markets endured a horrible 2022 as major indexes clocked their worst performances in more than a decade.

As market pros warn investors of bumpy times ahead, CNBC Pro used FactSet data to screen for low-volatility stocks that not only beat the market in 2022 but are expected to rise further this year.

Pro subscribers can read more here.

— Zavier Ong

European markets: Here are the opening calls

European markets are heading for a higher open Wednesday as investors await the latest U.S. Federal Reserve minutes, looking for signs of more interest rates to come.

The U.K.’s FTSE 100 index is expected to open 11 points higher at 7,570, Germany’s DAX 28 points higher at 14,227, France’s CAC up 9 points at 6,643 and Italy’s FTSE MIB up 31 points at 24,449, according to data from IG.

In Europe Tuesday, markets closed higher, buoyed after Germany published lower-than-expected inflation figures for December, down to 9.6% year on year. Inflation figures from France are due on Wednesday.

— Holly Ellyatt

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Europe markets open to close

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LONDON — European markets were higher in morning trade, as investors assessed China’s reopening and awaited key European inflation figures.

The U.K.’s FTSE 100 rose 2.1%, while Germany’s DAX index was up 1.4% and France’s CAC 40 was up 1.2%.

Overall, the pan-European Stoxx 600 gained 1.6%, led by travel stocks, up 2.7%.

German preliminary inflation figures for December are due Tuesday afternoon, and are expected to show a fall on the previous month.

They will be followed by inflation figures from France on Wednesday, Italy on Thursday, and a flash estimate for the whole euro area on Friday.

U.K. markets were closed Monday, but shares across the rest of the continent rose as euro zone manufacturing data indicated that the worst may have passed for the 20-member currency bloc.

The figures offered hope of a light at the end of the tunnel, after a year beset by recession fears as central banks around the world hiked interest rates aggressively to rein in soaring inflation.

Meanwhile, markets in Asia-Pacific were mixed overnight as investors weighed the short-term implications of the rise in coronavirus infections in China against the potential longer-term boost from the full reopening of the world’s second-largest economy.

The Caixin purchasing managers’ index showed further declines in factory activity on surging Covid infections, but the survey also put business confidence around the 12-month outlook for output at its highest level since February 2022.

Global investors will also be watching for minutes from the Fed’s December policy meeting, due to be published Wednesday.

The central bank hiked rates by 50 basis points in December following four consecutive 75 basis point increases, and markets will be keen to gauge the likely trajectory of monetary policy in 2023.

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Stock futures rise, helped by Nike and FedEx earnings

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Stock futures traded higher early on Wednesday, as sentiment got a boost from strong earnings out of Nike and FedEx.

Futures tied to the Dow Jones Industrial Average added 236 points, or 0.71%. S&P 500 futures rose 0.5% and Nasdaq 100 futures climbed 0.4%.

Nike shares added 12% after the apparel maker beat Wall Street’s expectations for quarterly earnings and revenue. Meanwhile, FedEx gained 4.7% as the package delivery giant beat consensus estimates on per-share earnings. The company fell short of expectations for revenue, however.

The Dow on Tuesday rose more than 92 points, or nearly 0.3%. The S&P 500 climbed 0.1% and the Nasdaq Composite eked out a slight gain of 0.01%. All three of the major indexes snapped a four-day losing streak, putting a little wind back into hopes for an end-of-year rally.

The modest gains came even after the Bank of Japan moved to widen its cap on the 10-year Japanese government bond yield, leading to a spike in the 10-year U.S. Treasury yield higher that initially rattled traders.

“Let’s focus on the positive. … From a fundamental perspective, the market took a pretty good punch and stood on its feet,” Virtus Investment Partners’ Joe Terranova said on CNBC’s “Closing Bell: Overtime” on Tuesday.

There’s a “tremendous amount of resiliency” in the market, he added, saying that should be investors’ focus going into 2023.

Investors await another batch of data due Wednesday morning, beginning with the Mortgage Bankers Association’s weekly measurement of nationwide home loan applications. Traders will also get updates on existing home sales and consumer confidence data.

There are a few more big names left to report earnings before the Christmas holiday. RiteAid and Cintas will report before the bell Wednesday. Micron will report after the bell.

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