Stocks, news, flash PMI data, earnings

Stocks on the move: Topdanmark up 3%, Ambu down 4%

Danish shares were the biggest movers in both directions at the open on Tuesday.

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

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

Rising inflation may appear largely in the past, but moving to a 25 basis point hike at the Federal Reserve’s next policy meeting is a “mistake,” according to Allianz chief economic adviser Mohamed El-Erian.

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

Inflation, he said, has shifted from the goods sector to the services sector, but may well resume if energy prices rise as China reopens.

El-Erian expects inflation to plateau around 4%. That, he said, would put the Fed in a difficult position as to whether they should continue to squeeze the economy to reach 2%, or promise that level in the future and hope that investors can tolerate a steady 3% to 4% more. near.

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

— Samantha Subin

CNBC Pro: Wall Street is excited about Chinese tech — and it loves a mega-cap stock

After more than 2 years of regulatory crackdowns and a pandemic-induced slump, Chinese tech names are back on Wall Street’s radar, with one stock in particular standing out as the top pick for many.

Professional subscribers can read more here.

— Zavier Ong

The Fed is likely to discuss next week when to stop hikes, the Journal report said

Federal Reserve officials next week will almost certainly approve another delay in interest rate hikes while debating when to stop the hikes altogether, according to a Wall Street Journal report.

The Federal Open Market Committee, which sets rates, is due to meet Jan. 31-Feb. 1, with market prices having an almost 100% chance of a quarter-point increase in the central bank’s reference rate. Most importantly, Fed Governor Christopher Waller said on 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 in recent days have backed that idea.

The Journal report, citing public statements by policymakers, said slowing the pace of increases could provide an opportunity to gauge what impact the increases so far are having on the economy. A series of interest rate hikes that began in March 2022 resulted in increases of 4.25 percentage points.

The market is currently pricing in quarter-point gains in the next two meetings, a period of inactivity, and then a half-point decline through late 2023, according to CME Group data.

However, several officials, including Governor Lyle Brainard and New York Federal Reserve President John Williams, have used the phrase “stay the course” to describe the policy path ahead.

— Jeff Cox

European markets: Here are the opening invitations

European markets are headed for a positive open on Tuesday ahead of the flash PMI (purchasing managers index) data for the Eurozone in January.

United Kingdom FTSE 100 the index is expected to open 10 points higher at 7,801, for Germany DAX 18 points higher at 15,122, France CAC by 12 points to 7049 and Italy FTSE MIB up 81 points to 25,945, according to data from IG.

No big earnings releases on Tuesday.

— Holly Elite

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