Earnings, inflation, Middle East in focus

U.S. stocks opened Tuesday’s session down.

The Dow was down 0.1% shortly after 9:30 a.m. ET. The S&P 500 slid 0.4%, while the Nasdaq Composite shed 0.7%.

— Alex Harring

The pan-European Stoxx 600 index was down 0.6% by late morning, with tech stocks shedding 1.6% while the oil and gas sector gained 0.7%.

U.S. President Joe Biden on Wednesday met with Israeli Prime Minister Benjamin Netanyahu in Tel Aviv and suggested the Gaza hospital blast alleged to have killed hundreds appeared to have been cause “by the other team.”

Shares of European semiconductor manufacturers were broadly lower after a disappointing earnings report from Dutch chipmaker ASML, which posted lower-than-expected orders and warned of flat sales in 2024.

– Elliot Smith

Euro zone inflation came in at an annual 4.3% in September, European Union statistics agency Eurostat said Wednesday, confirming earlier estimates.

The headline consumer price index slowed markedly from August’s 5.2% annual increase, though inflation rates continued to diverge sharply across the bloc.

European Central Bank policymakers are currently weighing up their next move on interest rates, with various Governing Council members telling CNBC last week that the work to contain inflation was not yet done.

– Elliot Smith

The pan-European Stoxx 600 index recouped early losses to hover around the flatline by mid-morning. Telecoms stocks added 0.8% while industrials dropped 0.8%.

Shares of Italian payments company Nexi rallied more than 15% on Wednesday after Bloomberg reported that private equity firm CVC Capital Partners is considering a takeover bid.

Nexi shares remain down almost 10% year-to-date. The Italian government holds a 13.6% stake in the company through state lender CDP, and has the power to veto any unwanted takeover interest.

– Elliot Smith

Adidas on Tuesday hiked its full-year guidance and posted stronger-than-expected third-quarter earnings, aided by sales of its Yeezy inventory.

The German sportswear giant projected a full-year operating loss of 100 million euros ($106 million), a significant improvement on its previous forecast of a 450 million euro loss, and expects revenues to decline at a low-single-digit rate for 2023.

Third-quarter operating profit came in at 409 million euros, down from 564 million for the same quarter in 2022.

Adidas shares climbed 4% during early trade in Europe on Wednesday.

– Elliot Smith

Shares of French payment company Worldline climbed more than 6% in early trade to lead the Stoxx 600.

At the bottom of the index, Swedish-Swiss multinational industrial and engineering group ABB fell more than 5% after its third-quarter earnings report.

The company met profit projections but but dampened expectations for the fourth quarter amid weakness in Chinese robotics and construction demand.

– Elliot Smith

The pan-European Stoxx 600 index slipped 0.2% in early trade, with tech stocks shedding 1.7% to lead losses while oil and gas stocks added 0.5%.

U.K. inflation came in at 6.7% in September, slightly ahead of expectations and unchanged from the previous month.

On a monthly basis, the headline consumer price index increased by 0.5%, in line with expectations. Economists polled by Reuters had projected an annual rate of 6.6% and a monthly climb of 0.5%.

The largest downward contributions came from food and non-alcoholic beverages, whose prices fell month-on-month for the first time since September 2021, the Office for National Statistics said Wednesday. Rising fuel prices made the largest upward contribution to the headline rate.

Core CPI — which excludes volatile food, energy, alcohol and tobacco prices — came in at 6.1% year-on-year, down from 6.2% in August, but slightly above a consensus projection of 6%.

“As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year,” U.K. Chancellor of the Exchequer Jeremy Hunt said in a statement.

“Today’s news just shows this is even more important so we can ease the pressure on families and businesses.”

Read the full story here.

– Elliot Smith

Britain’s FTSE 100 is seen around 20 points higher at 7,695, Germany’s DAX is set to open around 26 points higher at 15,278 and France’s CAC 40 is expected to add around 9 points to 7,038, according to IG data.

Ahead of the upcoming earnings season, Deutsche Bank has cut price targets on nearly 30 European stocks this week and upgraded just one to “buy.”

The biggest cut to price targets was for an energy company’s stock. Deutsche Bank analysts lowered their 12-month share price forecast by 36% on Oct. 16. The stock has nearly halved in value this year.

CNBC Pro subscribers can read more about the other stocks facing Deutsche Bank’s axe here.

— Ganesh Rao