The reaction of the Federal Reserve to the increase in interest rates by a quarter

The European Central Bank raised interest rates. The Stoxx 600 rose 0.9%

The European Central Bank announced that it will raise interest rates by 50 basis points to 2.5%.

The pan-European 600 index reacted by jumping from a 0.5 percent daily gain to 0.9 percent 15 minutes after the announcement.

A chart to represent the Stoxx 600 index.

The rate hike was in line with expectations, following four hikes in 2022.

Full coverage of the ECB’s decision can be found here.

– Hannah Ward-Glenton

Luxury carmaker Ferrari beat earnings expectations

Italian luxury car maker Ferrari It reported a 16% year-over-year increase in core adjusted earnings for 2022, indicating an “even stronger” year ahead.

The company said adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached 1.77 billion euros ($1.95 billion) last year, and set guidance of 2.13-2.18 billion euros for 2023.

Ferrari posted EBITDA of 469 million euros in the fourth quarter, up 18 percent from a year earlier, according to a Reuters poll, near analysts’ forecasts of 449 million euros.

Car shipments in 2022 are up 19% to 13,221 units, boosted by deliveries of the Ferrari Portofino M and the SF90 family, alongside the 296 GTB and 812 Competizione models that are undergoing upgrades.

A Ferrari NV SF90 hybrid car on the opening day of the Paris Motor Show in Paris, France, Monday, Oct. 17, 2022.

Nathan Lane Bloomberg Getty Images

“These figures provide an even stronger base for 2023 due to the high demand for our products worldwide,” said Ferrari CEO Benedetto Vigna.

The company’s shares on the New York Stock Exchange were up 2.63 percent in after-hours trading as of 12:46 a.m. London time.

Roksandra Yurdakhe

The Bank of England raised interest rates by 50 basis points and now sees a “much shallower” recession than feared.

People walk outside the Bank of England in the financial district of the City of London, in London, Britain, January 26, 2023.

Henry Nichols Reuters

The Bank of England raised interest rates by 50 basis points on Thursday, reversing some of its earlier gloomy economic forecasts.

The Monetary Policy Committee voted 7-2 in favor of a second consecutive half-point hike, bringing the Bank’s key rate to 4 percent, but indicated in its decision statement that smaller increases of 25 basis points may be considered at future meetings. . Two dissenting members voted to keep the rates unchanged.

Importantly, the bank also dropped the word “by force” from its rhetoric about continuing to raise rates if necessary to curb inflation.

Britain’s FTSE 100 rose 0.5 percent after the news, extending earlier gains.

Read the full story here.

– Elliott Smith

ING’s CFO says net interest income momentum will continue to increase

Tanate Phutrakul, ING’s chief financial officer, reports better-than-expected fourth-quarter net profit.

Stocks moving: Telecom Italia down 11%, Electrolux down 8.5%.

Bloomberg Bloomberg Getty Images

Italian Telecom European shares led the way in early trading, rising 11 percent, following reports that private equity firm KKR & Co Inc was preparing to make a non-binding offer for its landline network.

The network will support the struggling company’s huge debt load, Reuters reported.

Meanwhile, Electrolux It fell 8.5 percent after warnings that this year will see lower sales and may suffer from higher energy and labor costs.

– Jenny Reid

European markets rallied ahead of the central bank’s announcement

Europe’s Stoxx 600 was 0.5 percent higher at the open, as investors braced for interest rate hike decisions by the Bank of England and the European Central Bank this afternoon.

This follows declines in the past three sessions. After Europe closed on Wednesday, the US Federal Reserve announced a smaller rate hike of 25 basis points – but gave few hints at the end of its hiking cycle.

Germany’s DAX rose 0.65 percent, France’s CAC 40 rose 0.6 percent, and England’s FTSE 100 rose 0.2 percent.

Deutsche Bank beat its profit expectations in the fourth quarter

Deutsche Bank reported its tenth consecutive quarter of profit, boosted by rising interest rates and favorable market conditions.

The German lender reported a net profit of 1.8 billion euros ($1.98 billion) to shareholders in the fourth quarter, pushing its annual net income to 5 billion euros for 2022, a 159 percent increase from a year earlier.

The figure was nearly double the consensus estimate among analysts polled by Reuters of net profit of 910.93 million euros for the fourth quarter and beat forecasts of 4.29 billion euros for the year.

Read the full story here.

Deutsche Bank stock price

CNBC Pro: JPMorgan says Hong Kong stocks will recover in February, names 5 stocks to own.

JPMorgan has named five stocks to own amid an expected rally in China’s stock market in February.

Wall Street bank strategists attributed last week’s sell-off in Hong Kong-listed stocks to profit-taking by some investors.

They said the broader stock market would “move up” this month but turn to “decreasing quality in consumption as well as cyclical spaces and value growth.”

CNBC Pro subscribers can learn more about the 5 stocks JPMorgan named.

– Ganesh Rao

CNBC Pro: Watch out for tech stocks — analysts say these cash-strapped names are a better bet

Forget growth stocks like tech. Analysts recommend that investors go for companies that have a lot of cash.

Markets rallied in January — including the tech-heavy Nasdaq Composite, which rose nearly 10.7% last month for its best monthly performance since July.

But analysts say companies with pricing power are a safer bet than tech, given inflation is expected to remain high this year and uncertainty about when the U.S. Federal Reserve will cut interest rates.

They named three stocks to buy.

CNBC Pro subscribers can read more here.

– Your vision

CNBC Pro: Worried about Alibaba’s stock price falling? Analysts have 4 alternative technology options

Alibaba’s shares have enjoyed a strong rally this year, although a recent drop in its share price has some investors worried.

But Wall Street’s favorite isn’t the only game in town, as several stocks also have exposure to China’s Internet sector.

Professional subscribers can read more here.

– Xavier Ong

European markets: Here are the opening calls

European markets are headed for a higher open on Thursday as markets reacted positively to the US Federal Reserve’s quarter-point increase in interest rates.

United Kingdom FTSE 100 The German index is expected to open 31 points higher at 7,788 DAX 101 points higher in 15273, France CAC 35 points in 7109 and Italy FTSE MIB It rose 121 points to 26,870, according to IG data.

On Thursday, investors in Europe will focus on the latest monetary policy decisions from the European Central Bank and the Bank of England.

It’s a busy day for earnings with reports from Shell, BT, Deutsche Bank, Bank Santander, ABB, Julius Baer and Roche.

– Holly Elliott

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