European markets fell at the start of the new trading week as investors remained jittery over the economic outlook.
The benchmark Stoxx 600 index closed 1% lower Monday, with almost all sectors in negative territory. Chemicals stocks led losses, down 2.8%, while banking stocks ended just above the flatline.
Construction and material stocks fell 2.5% amid warnings of a looming U.K. mortgage crunch and a dip in house asking prices, as figures showed the average rate of a two-year fixed-rate deal crept over 6% for the first time since December.
The Bank of England will announce its latest interest rate decision on Thursday, along with the Swiss National Bank.
Asia-Pacific markets were also largely lower, although Japan's markets were still hovering near 33-year highs.
Asia investors will be looking ahead to China's loan prime rate decision on Tuesday, after the world's second-largest economy cut some of its key lending rates last week.
On the diplomatic front, U.S. Secretary of State Antony Blinken was in Beijing on a diplomatic mission to repair strained ties between the U.S. and China.
U.S. markets were closed for the Juneteenth holiday.
Stocks on the move: Next up 5%, Getinge down 15%
British fashion retailer Next was 5% higher Monday after raising its sales and profit guidance for the year. The clothes brand noted that trading had exceeded expectations thanks to recent warm weather and a boost in wages for consumers.
On the other end, shares of Swedish medical technology company Getinge tumbled 15% as supply chain issues led the firm to issue a profit warning.
— Karen Gilchrist
Markets may be overestimating how high interest rates in the UK will go, investment trust CEO says
Andrew Bell, CEO of Witan Investment Trust, says the full effect of monetary policy tightening in the U.K. has not been felt yet and the Bank of England should take a gradual approach to increasing interest rates.
UK 2-year government bond yields hits 15-year high
The yield on 2-year U.K. government bonds, also known as gilts, hit a 15-year high Monday.
The yield was trading around 4.978% by 9:40 a.m. London time — the highest since July 2008 — ahead of the Bank of England's monetary policy decision Thursday.
The central bank is widely expected to increase interest rates by 25 basis points in the face of still-high inflation and a strong labor market.
"The incoming UK data since the May MPC meeting point to mixed growth momentum, continued tightness in the labour market, and very strong underlying inflationary pressures," Goldman Sachs analysts led by Sven Jari Stehn said in a note on June 15.
"Although some uncertainty remains ahead of the June 21 CPI release, we expect a 25bp hike at next week's meeting and see a high hurdle for a 50bp step because inflation expectations have remained anchored, recent comments have signalled no appetite for stepping up the pace and the meeting will have no press conference or new projections."
— Katrina Bishop
CNBC Pro: Alibaba and more: Morgan Stanley names 5 global stocks with at least 50% upside
Morgan Stanley expects five of its top Asia stock picks to rise by more than 50% over the next 12 months.
The Wall Street bank is bullish on a set of Asian stocks as the broad MSCI Asia Pacific equities index has entered a new bull market, rising 25% from last October's low.
Alibaba is the investment bank's top pick in the China internet sector.
— Ganesh Rao
Inflation outlook falls sharply in key consumer survey
Consumer inflation expectations tumbled in June, providing support for the Federal Reserve in its battle against rising prices.
The closely watched University of Michigan Survey of Consumers showed that one-year expectations plunged to 3.3%, down from 4.2% the prior month. That's the lowest level since March 2021.
The headline reading for the survey posted a 63.9 reading, better than the Dow Jones estimate for 60.2 and up from May's 59.2.
CNBC Pro: Global stocks are soaring. Analysts love these names — giving one over 80% upside
U.S. stocks aren't the only ones soaring this year.
Some global indexes have followed those gains and climbed.
Analysts are still optimistic about some parts of the U.S. market, but some expect international markets to do better this year.
CNBC Pro screened for stocks in the MSCI World, S&P 500 and the Vanguard FTSE All-World ex-U.S. Index Fund for global names with big upside.
The resulting stocks have buy ratings from over 65% of analysts covering them, and average price target upside of at least 30%.
— Weizhen Tan
European markets: Here are the opening calls
European markets are heading for a positive open Thursday.
The U.K.'s FTSE 100 index is expected to open 3 points higher at 7,425, Germany's DAX up 29 points at 16,194, France's CAC up 6 points at 7,277 and Italy's FTSE MIB up 18 points at 29,730, according to data from IG.
Regional investors will be keeping a close eye on the release of preliminary euro zone inflation data for November on Thursday. Final third-quarter gross domestic product data for France is also due, as are German unemployment figures for November.
— Holly Ellyatt