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European markets retreat as investors gauge inflation outlook, Fed comments

Elliot Smith
Holly Ellyatt

This is CNBC's live blog covering European markets.

European markets retreated on Tuesday, with caution returning to global sentiment as U.S. Federal Reserve Chairman Jerome Powell gave a speech to Sweden's Riksbank.

European markets


The pan-European Stoxx 600 closed 0.56% lower provisionally, with retail stocks shedding 1.4% to lead losses as all sectors slid into the red bar autos, which was flat.

The index hit an eight-month high on Monday, as the U.K.'s FTSE 100 touched its highest level since 2018.

European markets shrugged off Powell's speech at 2 p.m. London time, which discussed the need for the central bank to be free of political influence but did not give an indication of the path of future rate rises. However, it followed two U.S. central bank policymakers making hawkish comments late Monday.

U.S. stocks nudged slightly higher in morning trade.

Investors are also gearing up for more inflation data later this week, with U.S. consumer price data for December due Thursday.

Overnight in Asia-Pacific markets, stocks traded mixed after the Nasdaq Composite extended gains for a second day on Wall Street. Technology stocks helped the index skirt losses Monday as traders added to bets that inflation may be easing.

Stocks on the move: Bayer up 4.5%, Euronav down 19%

German pharma firm Bayer topped afternoon trading in Europe, posting a 4.5% gain after saying its new blood clot drug could make more than 5 billion euros ($5.4 billion) in annual sales.

Meanwhile, Belgium shipping firm Euronav remained in the doldrums with a 19% share price decline on news of the collapse of its potential merger with rival Frontline.

Overall, the Stoxx 600 index came off Monday's eight-month high with a 0.65% fall, as caution returned to markets.

— Jenni Reid

Stocks open up as trading kicks off

Stocks moved higher in the first minutes of the trading day.

All three indexes traded up within 15 minutes of the opening bell.

The Dow led the way, up just under 0.2%. The S&P 500 and Nasdaq Composite each gained 0.1%.

— Alex Harring

Powell stresses need for Fed’s political independence while tackling inflation

U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., on Dec. 14, 2022.
Liu Jie | Xinhua News Agency | Getty Images

Federal Reserve Chairman Jerome Powell on Tuesday stressed the need for the central bank to be free of political influence while it tackles persistently high inflation.

In a speech delivered to Sweden's Riksbank, Powell noted that stabilizing prices requires making tough decisions that can be unpopular politically.

"Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy," the chair said in prepared remarks.

The speech did not contain any direct clues about where policy is ahead for a Fed that raised interest rates seven times in 2022, for a total of 4.25 percentage points, and has indicated that more increases likely are on the way this year.

Read the full story here.

Tesla stock has been ‘nothing short of a disaster,’ hedge fund manager says

David Neuhauser, chief investment officer of hedge fund Livermore Partners, said Tesla's stock had been "nothing short of a disaster" for investors after shares in the company declined by more than 65% in the past year. Neuhauser has shorted Tesla shares.

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Squawk Box Europe

Interest rates will still have to rise 'significantly,' ECB economist says

European interest rates will still "have to rise significantly" to get inflation down to 2% in a "timely" fashion, European Central Bank (ECB) Economist Isabel Schnabel said at an event organized by the Swedish Riksbank, according to Reuters.

She said inaction by the bank now would only mean more aggressive action at a later stage, which would impact both the broader economy and the green energy transition.

Schnabel added that the ECB needs to step up efforts to make its stock of bonds more green.

— Hannah Ward-Glenton

‘Quick and dirty maybe’: How Macron may be able to pass a key pension reform

Renaud Foucart, senior lecturer in Economics at Lancaster University, outlines what to expect from French President Emmuanuel Macron's upcoming pension reform.

'Quick and dirty maybe': How Macron may be able to pass a key pension reform
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Squawk Box Europe

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

Prices of platinum, which is used in everything from jewelry to fuel cells, are soaring.

CNBC Pro screened for platinum-related stocks with buy-ratings from analysts and serious potential upside.

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— Weizhen Tan

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

Consumers see the inflation burden easing while they expect to pull back considerably on their spending, according to a closely watched survey the New York Federal Reserve released Monday.

The central bank district's monthly Survey of Consumer Expectations for December showed that the one-year inflation outlook declined to 5%, down 0.2 percentage points from the previous month and the lowest level since July 2021.

— Jeff Cox

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 expected to open higher Thursday.

The U.K.'s FTSE 100 index is expected to open 14 points higher at 7,626, Germany's DAX 13 points higher at 15,837, France's CAC up 4 points at 7,253 and Italy's FTSE MIB 17 points higher at 26,579, according to data from IG.

Earnings come from Tate & Lyle, Manchester Utd, Johnson Matthey, United Utilities and Pets at Home. Data releases include a detailed breakdown of Germany's first-quarter gross domestic product.

— Holly Ellyatt