European stocks close slightly lower as markets remain in limbo; Rheinmetall up 3.7%

U.S. stocks opened lower Tuesday as traders assessed some disappointing retail results and looked ahead to the release of the Federal Reserve meeting minutes.

The Dow Jones Industrial Average and the Nasdaq Composite were both 0.3% lower in early deals while the S&P 500 dipped 0.2%.

— Karen Gilchrist

Tom Narayan, lead equity analyst for global autos at RBC Capital Markets, dissects the latest car registration data and weighs in on what he says are misconceptions about electric vehicles in the U.S. and Europe.

Bank of England Governor Andrew Bailey told U.K. lawmakers on Tuesday that inflation is on track to hit its 2% target, despite upside risks.

"I think we have seen signs now that we are on target to come back to 2%, I think the current setting of policy is restrictive," Bailey said.

U.K. inflation hit 4.6% in October, the lowest level for two years.

Bailey said he believed "Table Mountain" — a reference to the flat-topped mountain in South Africa — was a "good analogy" for the path of U.K. rates, even if the bank's own term is an "extended period."

Market-watchers have contrasted a Table Mountain rate approach to a "Matterhorn," after the steep Swiss peak, which would see rates rise higher and come down more quickly. Bailey said upside risks to inflation remained, particularly from wage growth.

Another risk has been the turmoil in the Middle East, he said, though he noted oil prices had not risen as much as he would have initially expected.

— Jenni Reid

Shares of Sonova were 7.7% higher in late morning trade after the hearing care solutions group downgraded its full-year earnings estimates by less than expected in its first-half results.

Shares of German arms manufacturer Rheinmetall meanwhile rose 4.2%, after the company outlined medium-term revenue and operating margin expectations in an investor day presentation, Reuters reported.

Software firm TeamViewer saw the biggest fall among Stoxx 600 stocks, down more than 10%.

Private equity firm Permira said Monday that related entity TigerLuxOne had placed 13 million shares in TeamViewer with institutional investors at a value of 13.90 euros ($15.21) per share, marking a discount of around 8% from its last closing price.

— Jenni Reid

Roger Jones, head of equities at London & Capital, discusses the outlook for investment into the AI industry and the state of financial markets.

European stocks had a muted start to Tuesday's session.

The Stoxx 600 index was 0.03% higher at 8:50 a.m. in London. The U.K.'s FTSE 100 was 0.28% lower as Germany's DAX climbed 0.2%, while France's CAC 40 was slightly below the flatline.

— Jenni Reid

U.K. public sector net borrowing excluding banks was £14.9 billion ($18.68 billion) in October, the second-highest level of borrowing for the month since records began in 1993.

It was also higher than consensus forecasts and a March forecast by the independent Office for Budget Responsibility of £13.7 billion.

Tax receipts were £2.7 billion higher year on year at £57.9 billion.

It comes ahead of a government budget update Wednesday in which Finance Minister Jeremy Hunt may announce tax cuts as he seeks to prioritize growth, according to the BBC.

Ruth Gregory, deputy chief U.K. economist at Capital Economics, said the latest public finances figures wouldn't deter Hunt from a "pre-election fiscal giveaway," especially as cumulative borrowing over the first seven months of the fiscal year came in lower than forecast at £98.3 billion.

This giveaway could average around £12 billion (0.5% of gross domestic product) per annum, Gregory said.

However, that would represent a partial reversal of previously announced tightening rather than significant fiscal loosening, Gregory added, and would likely be followed by large tax rises in 2025, after an election.

A U.K. national election must be called by the government before Dec. 17, 2024.

Lindsay James, investment strategist at Quilter Investors, said the government would want to take advantage of the "newfound slack" provided by the recent fall in U.K. inflation.

— Jenni Reid

The European Union car market "expanded significantly" in October, the European Automobile Manufacturers' Association said Tuesday, as new car registrations rose 14.6% year on year.

That was the 15th consecutive month of growth.

French new car registrations rose 21.9%, while Italy increased 20% and Spain grew 18.1%. Germany saw weaker growth of 4.9%.

The market share of battery-electric cars rose to 14.2%, up from 12% last October, the group said.

— Jenni Reid

It's been a big year for Big Tech, with U.S. favorites Nvidia and Meta Platforms among the stocks that have soared in 2023.

But for those investors who fear they might have missed the boat, portfolio manager Karen Kharmandarian has an under-the-radar global tech pick.

"This company would be one we would prefer to U.S. companies when it comes to machine vision systems," the senior portfolio manager at Thematics Asset Management told CNBC Pro.

— Amala Balakrishner

The persistent uncertainty in financial markets, along with high interest rates around the world, have raised the allure of holding on to cash — but one equities expert says this may not be the best idea.

"We're at a point where cash deposits or money in cash and money market funds is the highest it's been — a lot of investors are saying, maybe the [U.S. Federal Reserve] is peaking or going to cut rates so I should keep my money in cash — but I think that would be a missed opportunity," Andy Budden, investment director of equities at financial services firm Capital Group, told CNBC Pro.

Instead, he said it's time to "have a bit of courage" and revealed his favorite areas to invest in.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

European markets are expected to open higher Thursday.

The U.K.'s FTSE 100 index is expected to open 22 points higher at 8,442, Germany's DAX up 26 points at 18,896, France's CAC 7 points higher at 8,244 and Italy's FTSE MIB up 64 points at 35,091, according to data from IG.

Earnings are due from Swiss Re, Zurich Insurance, Siemens, Deutsche Telekom, BT and EasyJet, among others. There are no major data releases.

— Holly Ellyatt