Stocks, data, earnings, WEF news

Standard Chartered Chairman José Viñals said long- and short-term factors including an impending recession would cause challenges for the U.K. this year, but that the government should “maintain discipline” in its fiscal policies, “maintain confidence” for the private sector to operate well, and improve its relationship with the EU.

He also discussed his macro outlook for next year, why he thinks China will surprise to the upside, and speculation that the bank is an acquisition target, which he said he “read about in the news.”

Prices for wholesale goods and services in the U.S. fell sharply in December, offering a further signal of easing inflation.

The producer price index (PPI) dropped 0.5% month-on-month, the Labor Department reported, well below a consensus projection of a 0.1% fall in a Dow Jones survey of economists.

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Just Eat Takeaway shares jumped 10% by mid-afternoon on Wednesday after the Dutch food delivery company reported second-half earnings and vowed to prioritize profitability over growth going forward.

Compatriot semiconductor firm ASMI also climbed more than 10% after beating fourth-quarter earnings expectations on the back of improved supply chain conditions.

At the bottom of the Stoxx 600, Swedish private equity firm EQT fell 7% after its full-year earnings report.

– Elliot Smith

Ulrich Körner, CEO of Credit Suisse, discusses his outlook for interest rates, inflation and growth in China for 2023.

Recent data points suggest the euro zone may defy the odds and avoid a recession, according to Andrea Orcel, CEO of Italian bank UniCredit.

“Our view was a mild recession for this year but since then if we look at all the indicators we see, we probably see risk on the upside, so we’re looking at something that could even be no recession,” Orcel told CNBC at the World Economic Forum in Davos, Switzerland.

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– Elliot Smith

Just Eat Takeaway shares jumped 15% in early trade on Wednesday after the Dutch food delivery company reported second-half earnings and vowed to prioritize profitability over growth going forward.

Compatriot semiconductor firm ASMI climbed more than 8% after beating fourth-quarter earnings expectations on the back of improved supply chain conditions.

The annual rate of inflation in the U.K. fell once again in December to 10.5% — slightly below analyst expectations.

It marked the second month of falls, after the rate slipped from a 41-year high to 10.7% in November.

The U.K.’s Office for National Statistics said the largest downward contribution to the change “came from transport (particularly motor fuels), clothing and footwear, and recreation and culture, with rising prices in restaurants and hotels, and food and non-alcoholic beverages making the largest partially offsetting upward contributions.”

As electric cars become increasingly popular, a new manufacturing technique that could make them more affordable is garnering interest, according to Morgan Stanley.

Some automakers are outsourcing the process which could benefit three leading Asian parts suppliers, said the Wall Street bank.

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— Ganesh Rao

Oil prices are supported on further China reopening optimism and fuel demand, with OPEC forecasting that Chinese oil demand is on track for a bounce.

Brent crude futures rose 0.85% to $86.65 a barrel, while the U.S. West Texas Intermediate futures gained 0.91% to $80.91 a barrel.

“Chinese oil demand is on course to rebound due to the recent relaxation of the country’s zero-Covid measures,” OPEC’s monthly oil report stated.

It added that China’s first quarter oil demand will rebound from an annual decline of 0.3 million barrels per day year-on-year in 2022’s fourth quarter to 0.2 million barrels per day annualized growth.

– Lee Ying Shan

A recession probably won’t start now until later in 2023 as consumer spending has been stronger than expected and the Federal Reserve eases up on the intensify of its interest rate hikes, according to Bank of America.

“We push back the timing of our outlook for a mild recession in the US economy by about one quarter given durability in consumer spending on account of strong labor markets, excess saving, declining energy prices, and easier financial conditions,” the firm said in a client note. “That said, we think the headwinds will lead consumers to reduce spending and push the saving rate higher as the year progresses.”

That puts the recession into the second quarter, driven by a an investment-led slowdown leaking to consumer spending.

After pushing its benchmark borrowing rate up by 4.25 percentage points in 2022, the Fed is expected to ease back, with a 0.25 percentage point increase in February. That is forecast to be followed by additional quarter-point increases in March and May.

Rate cuts likely won’t come until 2024, the firm said.

—Jeff Cox

European markets are heading for a mixed open Wednesday as investors remain uncertain on the economic outlook, a topic high on the agenda at the World Economic Forum in Davos this week.

The U.K.’s FTSE 100 index is expected to open 12 points lower at 7,832, Germany’s DAX up 31 points at 15,203, France’s CAC up 19 points at 7,085 and Italy’s FTSE MIB up 37 points at 25,982, according to data from IG.

CNBC will be speaking to a range of delegates at the World Economic Forum on Wednesday, including the CEOs of Unicredit, Infosys, Nokia, Aramco and Credit Suisse as well as Greece and Poland’s finance ministers and Saudi Arabia’s foreign minister, among many others. Follow our coverage here.

— Holly Ellyatt