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European markets close lower as investors monitor oil prices, data; euro at 20-year low

Lucas Jackson | Reuters

LONDON — European markets closed lower Tuesday, with investors digesting a rise in oil prices and fresh economic data out of the euro zone.

European markets


The pan-European Euro Stoxx 600 provisionally ended down 0.5%, despite oil and gas stocks bucking the trend and pushing higher.

Health care and media stocks led the losses, both closing down around 1.6%. Meantime, oil & gas stocks ended up 3.1%.

Benchmark gas prices in the European Union spiked 13% overnight, as damage to a key pipeline system running oil from Kazakhstan through Russia and into Europe disrupted supply.

The damage comes after Russia said it will stop gas supplies to Europe for three days at the end of the month due to an unscheduled maintenance order on its main Nord Stream 1 pipeline.

The euro sank back below parity with the dollar to notch a two-decade low and was trading at around $0.9915 shortly before markets opened in Europe on Tuesday morning.

Asia-Pacific markets retreated on Tuesday, taking cues from Wall Street after U.S. stocks closed out their worst session since June on Monday amid mounting concerns about more aggressive monetary policy tightening from the U.S. Federal Reserve.

U.S. stock futures were mixed in morning trade, looking to arrest Monday's broad-based sell-off.

Investor focus this week will be on the Fed's economic symposium in Jackson Hole, Wyoming, with Chairman Jerome Powell set to deliver a speech on Friday addressing the central bank's approach to taming inflation.

Back in Europe, investors digested August flash PMI (purchasing managers' index) readings out of the euro zone, which showed that business activity contracted for a second straight month.

Stocks open little changed

Stocks opened little changed Tuesday. The Dow Jones Industrial Average rose 2 points, or 0.01%, shortly after the bell. The S&P 500 gained 0.06% and Nasdaq Composite advanced 0.19%.

— Sarah Min

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Daniel Murray, CEO of EFG Asset Management, discusses Federal Reserve rate hikes and the monetary policy challenge facing the European Central Bank.

Euro could slide further

The euro traded at a two-decade low of 0.9903 against the U.S. dollar Tuesday morning, and strategists at Citi Bank are anticipating "further euro depreciation," Head of CEEMEA Strategy Luis Costa told CNBC's "Squawk Box Europe."

Increasing wholesale gas prices and inflation across Europe, economic slowdown in China and the ongoing war in Ukraine are contributing to the forecast.

Read more here.

—Hannah Ward-Glenton

Weak PMIs point to third-quarter contraction

August flash PMI (purchasing managers' index) readings out of the euro zone showed that business activity contracted for a second straight month.

S&P Global's flash Composite Purchasing Managers' Index (PMI) fell to 49.2 in August from 49.9 in July. A reading below 50 indicates a contraction.

"The latest PMI data for the euro zone point to an economy in contraction during the third quarter of the year," said Andrew Harker, economics director at S&P Global, said in a press release.

—Matt Clinch

We expect the euro will depreciate further beyond its two-decade low, says Citi strategist

Head of CEEMEA Strategy at Citi Luis Costa says the bank is expecting the euro to depreciate further as the currency hits a two-decade low.

We expect the euro will depreciate further beyond its two-decade low, says Citi strategist
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We expect the euro will depreciate further beyond its two-decade low, says Citi strategist

Risk of 'financial accident' presents opportunity for investors, strategist says

Traders work during the opening bell at the New York Stock Exchange (NYSE) on Wall Street in New York City on August 16, 2022.
Angela Weiss | AFP | Getty Images

The growing risk of a "major financial accident" that causes a market capitulation later in the year could open up opportunities for investors to "pile up on quality risk assets," according to Beat Wittman, chairman and partner at Zurich-based Porta Advisors.

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U.S. stocks 'by far in the best position' and Europe faces 'winter of discontent,' strategist says
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Markets drift lower at the open

The Euro Stoxx 600 Index slipped 0.3% in early deals with media stocks the biggest laggard. Shipping firm Maersk saw its shares dip 2.7% after a price target cut for Citi.

Oil stocks rose by 1% after some steady buying in the commodity markets on Monday afternoon. Both WTI and Brent crude were higher for the session on Tuesday morning.

—Matt Clinch

Oil prices rise after Saudi talks of OPEC output cut

Oil prices climbed on Tuesday morning after Saudi Arabia reportedly cautioned that OPEC+ could cut output to address a recent slide in oil futures.

International benchmark Brent crude futures were up just over 0.6% at $97.10 per barrel by 06:30 BST, while U.S. West Texas Intermediate crude futures were up by around 0.7% at $91 per barrel.

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He tells CNBC why he loves this stock for the "next two to five years."

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CNBC Pro: Morgan Stanley's top China stock picks to beat market volatility

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The bank's picks span several sectors and have significant potential upside to their stock prices.

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