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European markets shine, Stoxx 600 closes 1.7% higher

from Europe Stoxx 600 The index tentatively ended the session up 1.7%, with retail stocks leading the charge with a 2.8% gain.

The boost came in part from sports brands such as Puma and Adidas, which led European shares with gains of 9.5% and 6.8% respectively.

They were buoyed by better-than-expected second-quarter earnings from Nike, whose US shares jumped 13% as the company stoked hopes that strong corporate earnings could weather the looming recession reasonably well.

France’s CAC 40 was up 2%, the UK’s FTSE 100 was up 1.7% and Germany’s DAX was up 1.5%.

— Jenni Reid

Stocks open higher, Dow up 300 points

Stocks opened higher on Wednesday.

The Dow Jones Industrial Average gained 303 points, or 0.92%. The S&P 500 jumped 0.66% and the Nasdaq Composite was up 0.35%.

— Samantha Subin

Hungary must avoid recession next year, says Prime Minister Viktor Orban

Hungarian Prime Minister Viktor Orban said on Wednesday that the country must avoid recession next year and reduce its inflation to single digits by the end of 2023.

According to Reuters, the head of state said at a briefing that Hungary is likely to face an energy bill of between €17 billion and €20 billion ($18 billion to $21 billion) next year. He added that his government could raise funds to cover this expense.

Orban said it would not be necessary to approach the International Monetary Fund for additional funding.

Hungary’s economy is facing a slowdown and currently has the highest central bank interest rates in Europe at 23.1%. Annual inflation is expected to rise to between 26% and 27% in the coming months, as reported by Reuters.

—Hannah Ward-Glenton

UK retail sales unexpectedly rise in December

British retailers reported a year-on-year increase in sales in December but expect purchases to decline again in 2023, according to a survey by the Confederation of British Industry.

Retailers and a Reuters poll of economists predicted demand would see a year-on-year decline this month as a result of the UK cost of living crisis.

The CBI trade index rose to +11 in December from -19 in November, well above the -21 estimated by retailers. Forecasts suggest that January will see the sales balance fall to -17.

—Hannah Ward-Glenton

Good quality corporate debt and gold are where you want to be next year, analyst says.

Good quality corporate debt and gold are where you want to be in the next year, according to Michael Howell, CEO of CrossBorder Capital.

Howell also said the US Federal Reserve may turn on liquidity before interest rates on “Squawk Box Europe” on Wednesday.

Stocks Moving: Uniper Rises 4.7% as EU Releases State Bailout

Shares in energy giant Uniper were up 4.7% by 10:30 am London time after shareholders on Monday approved a bailout deal offered by the German government.

The European Commission approved the plan on Tuesday. Reuters reported that the move has already cost Berlin 50 billion euros ($53 billion) and will involve up to 34.5 billion euros ($36.60 billion) in new cash injections by 2024.

The company had warned that it faced collapse if a deal was not reached and that shareholders could be left with nothing.

As Germany’s biggest importer of Russian gas, Uniper has been destabilized by rising market prices and the sharp cut in deliveries this year.

Among several bailout conditions, the company must divest its 84% ​​stake in Russian company Unipro, its German district heating arm and parts of its North American energy business, all by 2026.

“Uniper’s stabilization has been achieved,” said chief executive Klaus-Dieter Maubach. “We will do everything in our power to find the best owners for the assets and business to be sold.”

Germany should also have an exit strategy in place by the end of next year and look to reduce its share to no more than 25% plus one share by the end of 2028.

Despite the surge in recent news, Uniper’s share price remains down more than 90% year-to-date.

Sportswear brands win with Nike results

European sports brand shares gained after Nike beat its latest earnings estimates.

Puma led the pan-European Stoxx index with gains of 7.4%, followed by JD Sports and Adidas, which were up 7% and 6.6% respectively.

Nike shares rose more than 9% in after-hours trade in the US after the sportswear maker posted stronger-than-expected revenue and profit.

—Hannah Ward-Glenton

CNBC Pro: Fund manager says a recession is ‘imminent’ – and names cheap stocks to play it

Market watchers are increasingly concerned about an impending recession, and fund manager Steven Glass is no exception.

Against that backdrop, he says he’s focusing on companies with earnings visibility that are trading at attractive valuations.

His picks include a Big Tech name he said was “extremely cheap” with “huge margin potential”.

Professional subscribers can read more here.

— Zavier Ong

Expect a more challenging environment ahead, says Atlantic Equities

Atlantic Equities analysts are anticipating a more challenging scenario for the global consumer in 2023.

“Inflation may well have peaked, but input costs still remain high and companies will try to at least maintain, if not raise prices in some cases,” analyst Edward Lewis said in a note on Tuesday. “This could become more challenging as elasticity levels are starting to normalize with US retailers starting to pull back against prices, in line with European peers for the full year.”

He singled out Coca-Cola and Pepsi as some of his favorite consumer choices, citing “category momentum, continued investment and strong execution that underpins high growth.”

— Tanaya Machel

Stock market has lost $11.7 trillion so far this year

It’s been a tough year for equities, which are currently in a bear market and falling year-to-date.

From the yearly market high on Jan. 3 through this morning, US equities have lost $11.7 trillion in market capitalization, according to Bespoke Group data.

“The maximum drawdown was $13.6 trillion at the low of 9/30, so we’ve seen the market cap rise by just under $2 trillion since then,” analysts wrote on Tuesday. “In dollar terms, this drawdown was more extreme than anything investors have ever experienced. That’s pretty deflationary, if you ask us!”

Of the $11.7 trillion, more than $5 trillion in losses come from just five companies – Apple, Microsoft, Amazon, Alphabet, Meta and Tesla.

—Carmen Reinicke

European markets: Here are the opening calls

European markets are headed for a higher open on Wednesday, reversing the previous session’s bearish trend.

from UK FTSE 100 The index is set to open 23 points higher at 7,389, Germany’s index DAX 99 points more, with 13,969, the Frenchman CAC rose 34 points from 6,478 and Italy FTSE MIB rose 137 points at 23,830, according to IG data.

There are no big wins or dice rolls.

— Holly Ellyatt

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