Stocks, news, flash PMI data, earnings

Stocks in motion: Topdanmark up 3%, Ambu down 4%

Danish stocks were the biggest movers in either direction during Tuesday’s open.

Insurance company Topdanmark added 3.7% to lead the Stoxx 600 following its fourth-quarter earnings report and dividend proposal, while hospital equipment maker aroma fell 4.6% after SEB trimmed the stock to “sell” from “hold”.

El-Erian says Fed should rise 50 basis points, calls smaller hike a ‘mistake’

Inflation has shifted from the goods to the services sector, says Mohamed El-Erian

Rising inflation may be largely in the past, but a shift to a 25 basis point increase at the next Federal Reserve policy meeting is a “mistake,” said Mohamed El-Erian, chief economic adviser to Allianz.

“‘I’m in a very, very small camp that thinks they shouldn’t switch back to 25 basis points, they should do 50,” he told CNBC’s “Squawk Box” on Monday. they should take advantage of where the market is, and they should try to tighten financial conditions because I think we still have an inflation problem.”

Inflation, he said, has shifted from the goods to the services sector, but could very well rise again if energy prices rise when China reopens.

El-Erian expects inflation to stabilize at around 4%. This, he said, will put the Fed in a difficult position to determine whether to continue crushing the economy to reach 2%, or promise that level in the future and hope that investors will deliver a steady 3% to 4% in shorter terms. term can tolerate.

“That’s probably the best result,” he said of the latter.

— Samantha Subin

CNBC Pro: Wall Street is excited about Chinese tech – and likes one mega-cap stock

After more than two years of a regulatory crackdown and a pandemic-induced slump, Chinese tech names are back on Wall Street’s radar, with one stock in particular standing out as a top pick for many.

Pro subscribers can read more here.

— Zavier Ong

Fed will likely discuss next week when to halt hikes, the Journal report says

Federal Reserve officials will almost certainly approve another slowdown in rate hikes next week, while also discussing when to halt hikes altogether, according to a Wall Street Journal report.

The rate-setting Federal Open Market Committee meets on January 31 and February. 1, with markets pricing in almost a 100% chance of a quarter-point increase in central bank benchmark interest rates. Most notably, Fed Governor Christopher Waller said Friday that he sees a 0.25 percentage point hike as the preferred move for the upcoming meeting.

However, Waller said he doesn’t think the Fed is done tightening yet, and several other central bankers have supported that idea in recent days.

The Journal report, citing public statements from policymakers, said slowing the rate of increases could provide an opportunity to assess what impact the increases have had on the economy so far. A series of rate hikes that began in March 2022 has resulted in increases of 4.25 percentage points.

According to CME Group data, market prices currently point to a quarter-point increase over the next two meetings, a period of no action, and then a half-point decrease by the end of 2023.

However, several officials, including Governor Lael Brainard and New York Fed President John Williams, have used the phrase “stay the course” to describe the future policy path.

— Jeff Cox

European markets: Here are the opening calls

European markets are heading for a positive opening Tuesday ahead of the flash PMI (Purchasing Managers’ Index) data for the Eurozone in January.

That of the UK FTSE 100 index is expected to open 10 points higher at 7,801, Germany DAX 18 points higher at 15,122, France CAC 12 points up to 7,049 and Italy’s FTSE MIB Up 81 points to 25,945, according to data from IG.

There are no major earnings figures on Tuesday.

— Holly Ellyatt

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