‘Consumers are very cost conscious,’ says Barclays’ head of retail
Karen Johnson, head of retail at Barclays, discusses the lender’s latest consumer spending report and the impact of seasonal weather and events on spending patterns.
‘We have to strap ourselves in for a bit of volatility,’ portfolio manager says
The coming weeks are expected to remain volatile for markets, Ben Gutteridge, portfolio manager at Invesco, told CNBC’s “Squawk Box Europe” on Tuesday.
“It is certainly a worrying period. I have a more positive over the medium term, but over the next sort of few weeks, three weeks you know we have to strap ourselves in for a bit of volatility,” he said.
There is a “black hole” on the economic data and central bank communication front, and only a few key earnings are expected in the upcoming days and weeks, Gutteridge said.
“There just doesn’t seem to be that catalyst to sort of get markets sort of firing again,” he said, adding that this raised concerns about a “self feeding sort of volatility frenzy” as the market sell-off continues, risk positions are reduced and bond yields fall.
On Tuesday, Asian markets recouped some of the losses incurred in the previous session. European markets started the day higher, but had pulled back into negative territory by 10:30 a.m. London time.
— Sophie Kiderlin
Former ECB head Trichet: No case for emergency Fed cut
Jean-Claude Trichet, former president of the European Central Bank.
Pier Marco Tacca | Getty Images
There is no case for the Federal Reserve to enact an emergency rate cut between its scheduled meetings, despite growing nerves about the state of the U.S. economy, the former head of the European Central Bank told CNBC on Tuesday.
“At the present moment, taking into account all that we know, I don’t see that it would be thinkable that the Fed would give such an element of — I wouldn’t say panic, but an element of anxiety which is not necessarily justified,” Jean-Claude Trichet, also formerly the governor of the Bank of France, told “Squawk Box Europe.”
The Fed is likely to cut rates at its next meeting in September and may be torn between a 25 basis point and 50 basis point reduction, Trichet added.
“I don’t exclude at all that they could do 50… A lot of new information will come, many even this week, and so we will see exactly what happens,” he said.
— Jenni Reid
Europe markets open higher on Tuesday
European markets opened higher on Tuesday, with regional bourses and all sectors starting the day in the green.
The pan-European Stoxx 600 was last up 0.74% at 8:11 a.m. London time. Travel and leisure stocks led gains and were last up 1.59%, while banks and tech also rose. They had been among the most affected sectors in Monday’s stock market selloff.
Major regional indices were also higher, with the U.K.’s FTSE 100 adding 0.55%, France’s CAC 40 gaining 0.18% and Germany’s DAX rising 0.58%.
— Sophie Kiderlin
Korean and Japanese stocks rebound sharply at the open
South Korean and Japanese stocks opened sharply higher in Tuesday morning trade, rebounding from Monday’s sell-off.
Japan’s Nikkei 225 and Topix both spiked as much as 9%, before paring gains to trade about 7% higher. The Japanese yen weakened to about 146 against the U.S. dollar.
South Korea’s Kospi jumped more than 4% while the Kosdaq was about 5% higher.
— Christine Wang
Stocks can recover as Wall Street’s recession concerns are overstated, says BlackRock
Stocks will once again find their footing and recover from a global market sell-off as recession worries abates and the unwinding of the yen carry trade settles, according to BlackRock.
“We think risk assets can recover as recession fears ease and the rapid unwinding of carry trades stabilizes,” the firm’s Investment Institute wrote said. “We keep our overweight to U.S. equities, driven by the AI mega force, and see the selloff presenting buying opportunities.
“We think growth will be supportive of risk assets and believe markets are pricing in too many Fed rate cuts,” the note added. The firm also posits that the recent weaker-than-expected jobs report that preceded the Friday market sell-off more closely resembles a slowdown in hiring as opposed to a recession.
BlackRock added that the main driving force behind the rise in the unemployment is an uptick in labor supply due to immigration as opposed to layoffs, which is a key difference compared to previous recessions.
— Brian Evans
Fed should change communication even if it doesn’t cut rates this week, BlackRock’s Rieder says
The Federal Reserve should come out and signal to markets that it is aware of the issues facing the economy even if it doesn’t do an emergency rate cut, according to Rick Rieder, chief investment officer of global fixed income at BlackRock.
Rieder pointed out that traders are already pricing in aggressive moves from the Federal Reserve and said that the central bank should change its public communication to show that it knows the labor market has weakened and that rate cuts have become increasingly likely.
“Do they have to panic and do inter-meeting? No, but I think … evolving that communication would be helpful,” Rieder said on “Closing Bell.”
— Jesse Pound
Fed’s Daly sees rate cuts on the way
San Francisco Federal Reserve President Mary Daly indicated Monday that interest rate reductions are coming later this year, though she did not provide specifics.
“Policy adjustments will be necessary in the coming quarter. How much that needs to be done and when it needs to take place, I think that’s going to depend a lot on the incoming information,” the central bank official said during a forum in Hawaii.
Daly noted that she still thinks the economy is growing, though the labor market is weakening and less restrictive policy will be appropriate.
“I see an economy that has momentum, and we want to make sure we keep that,” she said.
—Jeff Cox
