World Economic Forum kicks off in Davos

The U.K.’s FTSE 100 looked set for a fourth session of gains, up 0.2% shortly before markets closed.

The index reached 7,860 points, continuing to move toward its all-time high of 7,903, set in 2018.

Though the FTSE has been critiqued for attracting less forward-looking, innovative firms than some of its peers, it benefitted from the boom in energy and commodity stocks last year. Investors also appeared attracted by the low valuations offered in London, and the potential to snap up dividend-paying stocks.

That was despite repeated recession warnings weighing on U.K. sentiment.

In a note published Monday, analysts at Pantheon Macroeconomics said it was likely the economy narrowly avoided a recession in the second half of 2022, but forecast significant drops in Q1 and Q2 of 2023. They also said the recent fall in natural gas prices had improved the outlook for later in the year.

— Jenni Reid

Temenos shares gained more than 7% by mid-afternoon to lead the Stoxx 600 after the Swiss software company announced that CEO Max Chuard would step down.

At the bottom of the European blue chip index, German meal kit delivery company Hellofresh dropped 6% after Exane BNP Paribas downgraded the stock to “neutral” from “outperform.”

– Elliot Smith

Claudio Descalzi, CEO of Eni, discusses the three pillars of the energy industry.

Cailin Birch, global economist at The Economist Intelligence Unit, discusses the impact of China’s reopening on the global economy.

Temenos shares gained more than 5% in early trade to lead the Stoxx 600 after the Swiss software company announced that CEO Max Chuard would step down.

At the bottom of the European blue chip index, compatriot laboratory equipment maker Tecan Group fell 4% after Kepler Cheuvreux downgraded the stock from “buy” to “hold” and cut its target price.

– Elliot Smith

2022 was a bad year for many investors, with most stocks — especially tech — plummeting to levels not seen since 2008.

But there could be some opportunities in the chaos, with a number of companies trading at steeper discounts on a price-to-earnings basis than they have in recent history.

CNBC Pro screened for these names that are also Wall Street favorites.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Declining inflation expectations from consumers is coinciding with expectations that the Federal Reserve is likely to step down the level of interest rate increases in a few weeks, and end them altogether soon.

The University of Michigan consumer sentiment survey on Friday showed the one-year inflation outlook down to 4%, the third straight monthly decrease and the lowest level since April 2021.

At the same time, traders assigned a 94.2% chance of a 0.25 percentage point interest rate increase on Feb. 1, when the Fed’s next two-day meeting concludes. That marks another a smaller move than the 0.5 percentage point hike in December, which itself was a deceleration from four straight 0.75 percentage point increases.

“Inflation expectations are well-anchored and improving as pricing pressures are weakening across many sectors. The Fed will likely hike by 0.25% at the upcoming meeting later this month,” LPL Financial chief economist Jeffrey Roach said. “We shouldn’t be surprised if the Fed starts talking about pausing in the near future.”

—Jeff Cox

European markets are heading for a higher open Monday as investors gauge the inflation outlook globally after positive signs from U.S. data last week.

The U.K.’s FTSE 100 index is expected to open 10 points higher at 7,856, Germany’s DAX 84 points higher at 15,174, France’s CAC up 43 points at 7,063 and Italy’s FTSE MIB up 142 points at 25,895, according to data from IG.

Data releases include Germany’s ZEW survey of economic sentiment for January and preliminary Italian inflation figures for January. The World Economic Forum begins in Davos, Switzerland, on Monday.

— Holly Ellyatt