Luxury goods slip lower
A Cartier store, owned by Richemont, in Shanghai, China, on Wednesday, July 17, 2024.
Bloomberg | Bloomberg | Getty Images
Luxury goods stocks shifted lower in afternoon deals following a disappointing set of results for Switzerland’s Richemont.
Kering led losses, shedding 7.4%, while Burberry ticked 6.4% lower. Richemont, meanwhile, traded down 5.7% lower and Hermes lost 4%.
Richemont, owner of the esteemed Cartier brand, had until now been an outlier in a broader luxury downturn, reporting record full-year sales in May. However, in announcing its half-year results Friday, the company — like its peers — pointed to weakness in China as weighing on wider global sales.
Investors will now be looking ahead to earnings from struggling British luxury line Burberry next week.
— Karen Gilchrist
U.S. stocks tick up at the open
U.S. stocks opened slightly higher Friday as investors continued to digest the outcome of the presidential election and its implications for the global economy.
The S&P 500 led gains, adding 0.17%, and looked set to notch its best week of the year after hitting record highs Thursday in a postelection and rate cut rally.
The Nasdaq Composite and the Dow Jones Industrial Average, meanwhile, added 0.09% and 0.13%, respectively.
— Karen Gilchrist
Germany gripped by ‘huge structural problems,’ former Christian Lindner advisor says
A former advisor to Germany’s Christian Lindner, who was dramatically sacked as finance minister this week, has called on Chancellor Olaf Scholz to swiftly hold a no-confidence vote and new elections to resolve economic uncertainty.
Lars Feld, former advisor to Christian Lindner and director of the Walter Eucken Institute, said there is no good reason to delay a vote of no confidence in Germany. Scholz, however, has said he does not wish to do so before mid-January.
“It is important to reduce uncertainty in economic policy as soon as possible because this is one of the reasons why investment and also private consumption remains low in Germany,” Feld told CNBC’s “Squawk Box Europe” on Friday.
“We have a stagnating economy and inflation is still above 2% — and we have huge structural problems because firms face a toxic mixture of high costs with regards to labor, energy, taxes [and] regulation,” he added.
— Sam Meredith
Mining stocks down 3%
Mining stocks led the losses in Europe, down 3.3% during afternoon deals.
London-listed mining giants including Rio Tinto, Anglo American and Glencore were trading more than 3.5% lower, while U.K.-based copper miner Antofagasta fell by 5.5%.
— Sam Meredith
Shares of UK homebuilder Vistry plunge
Shares of U.K. homebuilder Vistry fell as much as 20% on Friday, slumping to its lowest level since October last year after a second full-year profit warning in a month.
The stock was last seen down 18.6% at 12:30 p.m. London time.
Shares of Vistry over the last 12 months.
— Sam Meredith
Gold prices on track for worst weekly decline in five months
Gold prices fell on Friday, extending weekly losses, as investors reacted to Donald Trump’s election victory and its potential impact on the path ahead for U.S. interest rates.
Spot gold fell 0.7% to $2,687.54 per ounce as of 11:15 a.m. London time, slipping further away from the key $2,700 level. It is currently on track for its worst weekly performance since late May.
“Gold may gain as a safe-haven asset and inflation hedge, especially amid potential trade frictions and stagflation risks,” Charu Chanana, chief investment strategist at Saxo Bank, said in a research note.
“However, risks could be seen in case of excessive [U.S. dollar] strength and if the [Federal Open Market Committee] slows its pace of rate cuts,” Chanana said.
— Sam Meredith
Greggs shares slip after Deutsche Bank downgrade
Shares of bakery chain Greggs fell almost 7% in morning trade after a downgrade by analysts at Deutsche Bank.
Greggs
In a note entitled “An elephant in the dining room,” the DB analysts reduced Greggs rating from Hold to Sell, and cut their target price on the stock from 2600p ($33.68) to 2400p.
Analyst Tim Barrett said that last week’s budget by the U.K.’s new government “contained several measures – on minimum wages and National Insurance – that are disproportionately relevant to the labour-intensive leisure sector. The changes had already been anticipated directionally, but in magnitude (or structure), were worse than factored into company guidance and investor expectations.”
— Katrina Bishop
Bank of England expected to cut rates four times in 2025
Kallum Pickering, chief economist at Peel Hunt, weighs in on the likely course for U.K. interest rates, saying the Bank of England looks set to cut by a total of 100 basis points in 2025.
It comes after the central bank cut interest rates by 25 basis points Thursday while raising its inflation forecast. Its Monetary Policy Committee voted 8-1 in favor of the decision to bring the bank’s key rate to 4.75%.
It marks the central bank’s second such trim this year, after it began its easing cycle in August.
— Karen Gilchrist
Oil slides on hurricane output fears
Oil prices slid on Friday morning amid fears that Hurricane Rafael could hit oil and gas output in the U.S.
International benchmark Brent crude futures with January expiry traded nearly 1.5% lower at $74.52 per barrel on Friday, while the December contract for U.S. West Texas Intermediate crude stood at $71.08, or around 1.8% lower for the session.
It comes after a bumper week for oil prices as markets digested President-elect Donald Trump’s election win.
Oil
British Airways-owner IAG up over 6%
British Airways-owner IAG on Friday reported a 15% uptick in third-quarter operating profit, beating analyst expectations, and said it expects its robust financial performance to continue over the coming months.
Shares of the group rose more than 6% on the news, hitting their highest level since March 2020 when travel demand collapsed during the coronavirus pandemic.
— Sam Meredith
Sony quarterly operating profit beats estimates
Japanese tech giant Sony raised revenue guidance for the full year, upgrading its sales outlook after a strong quarter for its gaming business.
Sony on Thursday revised its fiscal year 2025 revenue target up slightly to 12.7 trillion yen ($83.4 billion) — it was previously targeting 12.6 billion yen of sales.
That came as the company also reported better-than-expected profit for the September quarter, with operating income jumping 73% year-over-year to 445.1 billion yen.
— Ryan Browne
A huge amount of opportunity in markets, Wren Sterling CIO says
There are plenty of opportunities for investors in markets, particularly in the U.K. and U.S., according to the chief investment officer at Wren Sterling.
“I think there’s a huge amount of opportunity in markets at the moment and I think what we’ve seen is a pick-up of that rotation that we started to see in early July, when we had that lower CPI print come out of the U.S.,” Rory McPherson, CIO at Wren Sterling, told CNBC’s “Squawk Box Europe” on Friday.
“Markets have clearly been focused on the election this week, budget in the U.K. last week, all the while beneath the surface, we’ve seen credit spreads track tighter, the environment for corporates continues to improve,” he added.
When asked whether there are opportunities in European stocks, McPherson replied, “Our view is the opportunities are in the U.K. and the U.S., we’re less positive on Europe.”
McPherson said U.S. companies that have done well, particularly in the postelection rally, have been those that have beaten “very modest” earnings expectations and were trading on cheaper valuations to the firms that propped up the market in recent years.
— Sam Meredith
Stocks on the move: Zealand Pharma up 7%, Vistry down 14%
Shares of Danish biotech Zealand Pharma surged more than 7% on Friday morning, hitting the top of the European benchmark after JPMorgan initiated coverage of the stock with an overweight rating.
U.K. housebuilder Vistry, meanwhile, tumbled to the bottom of the index. Shares of the company slumped more than 14% after issuing its second profit warning in a month.
— Sam Meredith
European markets open slightly higher
European markets opened slightly higher on Friday morning.
The pan-European Stoxx 600 index traded up around 0.2%, with sectors and major bourses pointing in opposite directions.
— Sam Meredith
Cartier owner Richemont posts dip in sales
Swiss luxury group Richemont reported a 1% dip in sales through the six-month period ending in September, citing a challenging macroeconomic backdrop and tougher conditions in China.
The Cartier owner said sales came in at 10.1 billion euros ($10.89 billion) in the first half of its fiscal year, down 1% at actual exchange rates from the same period a year earlier.
Operating profit from continuing operations, meanwhile, came in at 2.2 billion euros for the six-month period, reflecting a 17% fall at actual exchange rates.
“In the first half of this fiscal year, we continued to deliver sustained resilience in a world where uncertainty has become the norm,” Johann Rupert, chairman of Richemont, said in a statement.
“We saw solid sales growth across most of our regions offsetting continued weakness in Chinese demand, which, as I had predicted, will take longer to recover and is particularly affecting our Specialist Watchmakers,” he added.
— Sam Meredith
CNBC Pro: Bitcoin’s on track to hit $100,000 after Trump’s election victory, analysts say
Bitcoin is on track to hit the $100,000 price milestone by the end of the year after President-elect Donald Trump’s election victory, according to analysts.
Trump, who on Wednesday beat Vice President Kamala Harris to win the 2024 U.S. election, had promised several pro-cryptocurrency initiatives in the months leading up to the vote.
CNBC Pro asked analysts for their bitcoin price targets, and when they expect the cryptocurrency to hit them.
Bitcoin
CNBC Pro: The sectors — and stocks — to buy in Asia after Trump’s win, according to analysts
Former U.S. President Donald Trump’s victory over Vice President Kamala Harris in this week’s election has raised questions about how Asia will be impacted.
“At face value, Trump 2.0 is bad news for Asia, esp[ecially] China,” analysts at Macquarie Research wrote in a Nov. 7 note, given the president-elect’s plans to raise tariffs and cut taxes.
Even so, the analysts say the region is “more prepared than in 2016” and investment opportunities remain, especially given the weaker yen and stimulus in China.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
European markets: Here are the opening calls
European markets are expected to open in mixed territory on Friday.
The U.K.’s FTSE 100 index is poised to open 23 points higher at 8,166, Germany’s DAX up 45 points at 19,412, France’s CAC up 21 points at 7,445 and Italy’s FTSE MIB down 13 points at 33,689, according to data from IG.
In corporate news, Swiss luxury group Richemont and British Airways-owner IAG are among those to report earnings on Friday.
— Sam Meredith
