stocks, data, earnings and BoE decision
Deutsche Bank is well positioned to exceed capital distribution of €8 billion, CFO says
Deutsche Bank CFO James von Moltke discusses the lender’s momentum into 2024 and gives his take on corporate finance and M&A, as well as on meeting distribution expectations.
European bond yields rise after U.K. rate decision and euro zone data
In August, the Bank of England increased interest rates for the 14th time in a row.
Alexander Spatari | Moment | Getty Images
U.K. government bond yields moved slightly higher in afternoon trade, after the Bank of England held interest rates steady, but revealed division among its Monetary Policy Committee.
Members voted 6-3 in favor of leaving rates steady, with two of the three opposing a move favoring a further 25-basis-point hike. One member voted for a cut.
Rate-sensitive two-year gilt yields were 6 basis points higher at 1 p.m. in London, while the 10-year yield was up 2 basis points. Yields move inversely to prices.
“The [BoE] statement appeared to walk the line between signalling easing ahead, while not invoking a flurry of bets in favour of aggressive cuts,” Matthew Ryan, head of market strategy at Ebury, said in a note.
It comes after U.K. inflation unexpectedly rose to 4% in December.
German two-year bond yields rose by 6 basis points, while the 10-year yield, seen as a euro zone benchmark, added 2 basis points.
The Thursday inflation print for the euro area showed a slight dip in the headline rate, to 2.8%, but also sustained pressure in price rises from services and a less-than-expected reduction in the core rate.
— Jenni Reid
Bank of England leaves rates unchanged
Andrew Bailey, governor of the Bank of England (BOE), during the Monetary Policy Report news conference at the bank’s headquarters in the City of London, UK, on Thursday, Nov. 2, 2023.
Bloomberg | Bloomberg | Getty Images
The Bank of England’s Monetary Policy Committee voted 6-3 in favor of holding interest rates steady at 5.25%.
“The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably,” the Bank said in statement.
Read more here.
— Elliot Smith
Euro zone inflation eases as expected
Annual headline price rises came in at 2.8%, in line with a forecast of economists polled by Reuters.
Inflation stood at 2.9% in December, up from 2.4% in November, largely due to the wind-down of energy price support measures.
Read more here.
Volvo Cars soars 23% after announcing end to Polestar funding
Volvo Cars shares surged 23% in early trade after the Swedish automaker announced that it will stop funding subsidiary Polestar Automotive.
“This is a natural evolution, I think, between the relationship between Polestar and Volvo. Obviously, we spun out Polestar as a separate company a long time ago, and since then we’ve been incubating and working with Polestar for a number of years,” Volvo Cars CEO Jim Rowan told CNBC’s Silvia Amaro.
“Now, Polestar … they’ve have got a very exciting future ahead of them, they’ve moved from being a one-car company to a three-car company, they’ve got two brand new cars coming out very shortly, in fact in the first half of this year, and that’s going to take them to a new growth trajectory.”
Volvo Cars also reported a sharper-than-expected rise in fourth-quarter operating income (excluding joint ventures and associates), which hit 6.7 billion Swedish krona ($643.83 million) compared to 3.9 billion krona for the same period in 2022. Fourth-quarter revenue was 109.4 billion krona versus 105.2 billion a year ago.
Read more here.
— Elliot Smith
Correction: This blogpost has been updated with the correct figures for the company’s earnings.
BNP Paribas fall sharply
BNP Paribas, the euro zone’s biggest bank, beat estimates in the second quarter, it said Thursday.
Chesnot | Getty Images News | Getty Images
BNP Paribas shares lost 8% on Thursday morning after the French bank reported a quarterly sales miss and pushed back a profit target.
It was the largest single-day loss since March last year and shares were briefly halted, according to Reuters.
—Matt Clinch
Shell reports full-year profit beat, announces $3.5 billion share buyback
British oil giant Shell beat expectations for full-year profit and announced a $3.5 billion share buyback program.
Shell reported adjusted earnings of $28.25 billion for the full-year 2023, coming after its highest-ever annual profit of $39.9 billion the year prior.
Analysts had expected net profit of $27.5 billion, according to an LSEG-compiled consensus.
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Shell share price.
Read more here.
— Sam Meredith
Adidas expects higher profit, reports 2023 tailwinds from selling Yeezy stock
A London Fashion Week guest wearing red Adidas Yeezy shoes in September 2022.
Jeremy Moeller / Contributor / Getty Images
Adidas expects to nearly double its operating profit to around 500 million euros ($540 million) in 2024, the German sportswear retailer said in an unscheduled announcement after the market close Wednesday.
The company released preliminary, unaudited figures putting full-year profit at 268 million euros, sharply down from the prior year but 368 million above its previous guidance.
However, the 2024 forecast was below analyst expectations, Reuters reported, and shares were lower in pre-market trade.
Adidas said it boosted 2023 performance by 100 million euros thanks to an improved operating business, and by 268 million owing to its decision not to write off its inventory of Yeezy stock, products created by rapper Ye, formerly Kanye West.
Adidas terminated its partnership with the musician in October 2022, with pressure mounting on the company after he made several antisemitic comments online. Yeezy had been a commercial success for Adidas, generating nearly $2 billion a year, according to analysts.
After initially considering scrapping its leftover Yeezy stock, with an estimated retail value of $1 billion, Adidas decided in mid-2023 to sell it. The first tranche generated 400 million euros.
On Thursday, the company said it would sell remaining stock “for at least the cost price.”
The preliminary results also show Adidas currency-neutral revenues were flat year on year in 2023, and reported sales were down 5% to 21.4 billion euros.
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Adidas share price.
Deutsche Bank profit smashes estimates
Illustration shows the logo of Deutsche Bank Brussels, Saturday 25 March 2023.
Nicolas Maeterlinck | Afp | Getty Images
Deutsche Bank reported fourth-quarter net profit of 1.3 billion euros ($1.4 billion), well ahead of expectations.
It marked an almost 30% fall from the same quarter a year ago, but was significantly higher than the 785.61 million euros expected by analysts.
The bank also announced plans to hike share buybacks and dividends by 50%, returning 1.6 billion euros to shareholders.
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Deutsche Bank share price.
Read more here.
— Elliot Smith
CNBC Pro: Jefferies names its ‘highest-conviction’ stocks to buy — and one has 118% upside
Investment bank Jefferies has revealed its top stock picks that are exposed to major themes like innovation, new products, and emerging markets.
A Chinese e-commerce giant, a chip stock, a European bank, an insurance giant, and a medical device maker are among the investment bank’s “top picks,” with one stock expected to rise by 118% over the next 12 months.
CNBC Pro subscribers can read more here.
— Ganesh Rao
CNBC Pro: Want to cash in on the weight-loss drug boom? Morgan Stanley names 4 global stocks
Drug manufacturers such as Eli Lilly and Novo Nordisk have been hot favorites among investors in the past year, given positive reception to their weight-loss medications.
“The uptake of GLP-1 (glucagon-like-pepitide-1) class AOMs (anti-obesity medications) has been unexpectedly robust, particularly in the U.S. where the drugs are propelling weight-centric goals to therapeutic guidelines,” Morgan Stanley’s analysts noted.
The implication of the drugs has been “less clear” for Asia, however, the investment bank said as it named several opportunities – and top stocks – to play the theme in the region.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
European markets: Here are the opening calls
European markets are set to open lower Thursday.
The U.K.’s FTSE 100 index is expected to open 23 points higher at 7,619, Germany’s DAX down 42 points at 16,850, France’s CAC down 12 points at 7,642 and Italy’s FTSE MIB 16 points lower at 30,856, according to data from IG.
Earnings are set to come from Shell, Deutsche Bank, ABB, Roche, Julius Baer, Sanofi and BNP Paribas.
Preliminary inflation data for the euro zone in January is also due Thursday, with markets keen to get the latest gauge on the direction of travel for consumer prices.
— Holly Ellyatt
