European markets rebound after BoE steps to calm markets

European markets rebound after BoE steps to calm markets
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CNBC Pro: Analyst says this FAANG stock is an evergreen winner and investors should buy the dip

Tech stocks have had a rough year so far, but one Rosenblatt Securities analyst thinks the sell-off is an opportunity for long-term investors to buy into the dip.

“Stay away from the losers,” he said, advising “winners in various secular wars and evolutionary wars” in technology.

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— Zavier Ong

Wells Fargo’s Harvey says stocks could sustain this ‘oversold bounce’ over the next few days

Wells Fargo’s Chris Harvey expects stocks to continue their upward move.

“The rise in open interest, retail skewness and BOE action suggest that stocks will continue to bounce back over the next few days,” he said in a note to clients Wednesday.

Stocks hit fresh lows earlier in the week as the S&P 500 kicked off a new bear market. The sell-off was triggered by the Fed’s latest rate decision last week, which some investors believe is driving the market into oversold conditions.

Harvey said there is growing consensus that a Fed-induced recession is inevitable as the cost of capital rises and prices approach record highs.

“We look at the recession like a car crash,” he wrote. “You never know how bad it will be, but there is almost no ‘better-than-expected’ outcome – so policymakers need to be careful what they wish for.”

—Samantha Subin

10-year Treasury yield sees biggest drop since 2020

Comparative return 10 years Treasure It saw its biggest drop since 2020 on Wednesday, despite briefly reaching 4% earlier in the session, after the Bank of England announced a bond-buying plan to stabilize the British pound.

The 10-year Treasury yield was last down 23 basis points to 3,733%, or the most low since 2020.

Earlier in the day before erasing those gains, it hit a high of about 4.019%, the highest since October 2008.

Yields and prices move in opposite directions. One basis point is equal to 0.01%.

European markets: Here are the opening calls

European equities are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.

According to data from IG, the UK’s FTSE index is expected to open at 7,341, down 47 points, Germany’s DAX down 86 points to 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB down 132 points to open at 22,010.

Global markets retreated after a rise above expectations. US consumer price index The Bureau of Labor Statistics countered economists’ expectations for headline inflation to fall 0.1% month-on-month in its August report showing prices rose 0.1% month-on-month and 8.3% year-on-year.

Core CPI, which excludes volatile food and energy costs, increased 0.6% from July and 6.3% from August 2021.

UK inflation figures are expected for August and euro area industrial output will be released for July.

—Holly Elliott

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