European markets advance as investors await Fed minutes

French inflation unexpectedly slows

Panorama from the Arc de Triomphe in Paris, France.

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Inflation in France slowed to 6.7% in December from a record high of 7.1% the previous month, preliminary data showed on Wednesday morning.

Economists polled by Reuters had forecast headline inflation, adjusted to compare with the euro zone, to reach 7.2% on an annual basis.

The most significant decline was in energy, where prices rose by 15.1% year-on-year compared to 18.4% in November.

This follows a more-than-expected slowdown in inflation in Germany, which reported on Tuesday that the SPCI fell to 9.6% from 11.3%; and Spain, which registered a drop to 5.8% from 6.7% last week.

Analysts are looking for signs that inflation has peaked in the eurozone’s main economies; and whether it will affect the European Central Bank, which previously indicated that interest rates would need to rise “significantly”.

Analysts at ING said the path to significantly lower inflation would not be easy, with the outlook still dependent on factors such as warmer weather and continued pipeline pressures affecting energy prices; war and agricultural sector challenges affecting food prices; and government support programs.

“[Germany’s] the inflation figures, however, are not a relief, but merely a reminder that eurozone inflation remains primarily a phenomenon of energy prices,” the note said. “The ECB cannot and will not base its policy decisions on highly volatile energy prices.”

They expect an increase of 100 basis points in the next two meetings and updated macro forecasts in March.

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Italy will report on inflation on Thursday, and on Friday it will release a flash estimate for the euro area.

– Jenny Reid

Swiss annual inflation of 2.8% in 2022

Swiss consumer prices rose 2.8% year-on-year and fell 0.2% in December, the Swiss Federal Bureau of Statistics said today.

It found that Swiss inflation averaged 2.8% in 2022, compared with 0.6% in 2021. It attributed the annual increase to increases in the cost of petroleum products, gas, cars and house rents, which offset price falls in medicine and landline and mobile communications.

Stocks on the move: BKW up 4%, Tenaris down 5%

Swiss electricity supplier BKW It rose 6% in early trade to lead the Stoxx 600 after forecasting an “outstanding” full-year result in 2022.

Italian steel pipe manufacturer Tenaris fell 5% to the bottom of the European blue chip index.

– Elliott Smith

CNBC Pro: Analysts See These 10 Global Renewable Energy Stocks Rising Despite Higher Rates, One Offers 50% Gain

Skyrocketing energy costs around the world have spurred investment in renewable energy.

Swiss investment bank UBS named 10 prominent players in the renewable energy market that will capitalize on this trend and are expected to outperform in the coming year.

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CNBC Pro: Wall Street is bullish on the chip giant, with Morgan Stanley backing it for 55%

The once-hot chip sector suffered in 2022, but Wall Street appears to be more bullish on semiconductor stocks for next year.

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Recently, several professionals have encouraged investors to take a longer-term view of the industry, given the importance of chips in several key secular trends.

Analysts have singled out one stock in particular that they are bullish on, citing its earnings potential and future profitability.

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— Weizen Tan

US will avoid recession in 2023, says Goldman Sachs

Goldman Sachs is outside the consensus forecast for the US economy in 2023.

“Our economists continue to believe the US will avoid a recession as the Fed successfully crafts a soft landing for the economy,” the analysts wrote on Tuesday.

“This consensus forecast partly reflects our view that the period of below-potential growth is sufficient to gradually rebalance the labor market and ease wage and price pressures,” the statement said. “But it also reflects our analysis, which suggests that the burden of fiscal and monetary policy tightening will ease sharply next year, contrary to the consensus view that the lagged impact of interest rate hikes will lead to a recession in 2023.”

Additionally, the bank today raised its 2Q22 GDP growth forecast by 10 basis points to +2.1%, based on the release of surprisingly strong construction spending in November.

“The difference between the resilience of the US economy in 2022 and the decline in stocks has been the main story of the last year,” Goldman said. “And whether that disconnect continues, whether the economy matches the market’s downturn, or whether the market rebounds after an economic soft landing may be at least part of the 2023 narrative.”

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-Carmen Reinick

CNBC Pro examines low-volatility stocks for fear of a bumpy ride

Equity markets endured a terrible 2022 as the major indexes posted their worst performance in more than a decade.

As market professionals warn investors of bumpy times ahead, CNBC Pro used FactSet data to examine the low-volatility stocks that will not only outperform the market in 2022, but continue to rise this year.

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— Zavier Ong

European Markets: Here are the opening calls

European markets are headed for a wider open on Wednesday as investors await the latest minutes from the US Federal Reserve for signs that interest rate hikes are on the way.

of the United Kingdom FTSE 100 The index is expected to open 11 points higher at 7,570 in Germany DAX 28 points higher – 14,227, for France CAC by 9 points to 6643 and Italy FTSE MIB by 31 points to 24,449 points, according to IG data.

Markets in Europe closed higher on Tuesday, rising after Germany posted lower-than-expected December inflation of 9.6% year-on-year. Inflation figures from France are expected on Wednesday.

— Holly Elliott

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