US inflation data, stocks, earnings

A key U.S. inflation metric came in hotter than expected, raising concern that the Federal Reserve may not cut interest rates this year.

The consumer price index rose 0.4% in March from the prior month. Year over year, it gained 3.5%. Economists polled by Dow Jones expected a 0.3% gain month over month and a 3.4% increase year on year.

The March CPI increase was a reacceleration from February, when it gained 3.2%.

Core CPI, which strips out volatile food and energy prices, also rose more than expected last month.

— Fred Imbert

French hotel giant Accor can play a unique role in the booming luxury sector, CEO Sébastien Bazin told CNBC’s Charlotte Reed in an interview on Tuesday.

Bazin said he saw stronger growth ahead for luxury than for the mid-range premium economy segment.

“It’s more difficult, it’s more investment, it’s more human capital, it’s more experience-driven. You can’t fail, but it’s more rewarding,” Bazin said.

“This is probably the niche we can play being French-rooted. Half of luxury goods happen to be French born. Americans don’t play that much in that game, and nor do the Chinese,” he added.

Bazin said this will include a focus on the heritage and history of brands such as Orient Express, in which Accor acquired a 50% stake in 2017. The company is relaunching rides on the iconic rail service in 2025.

— Jenni Reid

The latest U.S. inflation print due out on Wednesday may have limited impact on markets even if it comes in high, strategists said.

The consumer price index report will be released at 8:30 a.m. ET.

Market sentiment will remain calm “for as long as inflation is just sticky, as it has been lately. Growth has been strong, inflation has been sticky. The Fed is pretty relaxed about sticky,” Viktor Hjort, global head of credit strategy at BNP Paribas, told CNBC’s “Squawk Box Europe.”

That will continue unless inflation starts to rise again, which would put the prospect of rate hikes back on the table, Hjort said.

Julien Lafargue, chief market strategist at Barclays Private Bank, said in a Wednesday note that markets are poised for inflation to exceed expectations, as bets on a June cut have decreased.

“Importantly, speakers for the Fed have often highlighted that two lower inflation prints are required for them to become confident that interest rate cuts are justified.”

Ahead of the June meeting, there are two more consumer price index readings after Wednesday, and two personal consumption expenditures index prints, he noted.

“With that in mind, forthcoming data may not carry as much significance as the headlines might imply,” Lafargue said.

— Jenni Reid

German carmaker Mercedes Benz sold 568,400 cars and vans in the first quarter, marking a 6% fall year-on-year, the company reported Wednesday.

The decline in battery electric vehicle sales was even steeper, at 9%.

The company said supply chain bottlenecks had constrained sales of passenger cars.

Asia recorded the weakest regional performance, with 15% lower sales.

Mercedes Benz shares were 1.1% higher following the announcement.

European rivals have recorded more robust sales performances in the quarter, with Renault transactions up  14.1% and Sweden’s Volvo Cars up 25%. Germany’s BMW on Wednesday said sales were 1.1% higher in the first quarter, while electric vehicle sales rocketed up 27.9%.

— Jenni Reid

Shares of Tesco nudged 0.5% higher at 9:10 a.m. in London after the supermarket giant reported a 12.8% increase in profit to £2.83 billion ($3.59 billion) in full-year results Wednesday.

Sales climbed 7.4% to £61.48 billion. The company also announced a higher dividend per share of 12.10 pence, up from 10.90 pence.

It forecast adjusted operating profit of at least £2.8 billion in its retail division for the coming financial year, up from £2.76 billion.

Chief Executive Ken Murphy said the business had “strong momentum,” and that it was seeing signs of improved customer sentiment.

“Inflationary pressures have lessened substantially,” Murphy said in a statement.

European stocks opened higher Wednesday, with the Stoxx 600 index up 0.6% at 8:20 a.m. London time and all sectors in the green.

Germany’s DAX and the U.K.’s FTSE 100 were both around 0.6% higher, while France’s CAC 40 climbed 0.5%.

Inflation in Norway eased more than expected in March, according to data published by the country’s statistics office.

The headline rate fell to 3.9% from 4.5%, below the 4.2% forecast in a Reuters poll of economists.

Core inflation, stripping out energy and adjusted for taxes, also came in below predictions and eased from 4.9% to 4.5%.

Norges Bank held interest rates steady in March, and said it expected to leave them unchanged until fall.

“Price pressures in Norway are decreasing faster than anticipated… Norges Bank has scheduled the start of the easing cycle for Q4. Another downside surprise fuels speculation that the monetary authorities will abandon their hawkish stance sooner,” Bartosz Sawicki, market analyst at Conotoxia, said in a note.

He added that the he did not expect a reduction in rates from their 16-year highs until December, given strong wage increases, a robust economy and the “lack of a substantial recovery” in the Norwegian Krone.

— Jenni Reid

Ratings agency Fitch revised its outlook on China to “negative” from “stable,” citing “increasing risks to China’s public finance outlook.”

The agency said in its report that the country faces more uncertain economic prospects and a transition away from property reliant growth.

Furthermore, it noted that wide fiscal deficits and rising government debt in recent years have eroded fiscal buffers, and that debt could still increase as fiscal policy increasingly plays an important role in supporting growth in the coming years.

However, Fitch affirmed its A+ rating on China, citing supporting factors including its large and diversified economy, solid GDP growth prospects relative to peers and an integral role in global goods trade.

— Lim Hui Jie

In a market where finding reliable passive income streams can be challenging, two fund managers have shared their insights on dividend stocks that could offer attractive yields and growth potential.

Matt Burdett, portfolio manager at Thornburg Investment, looks for companies with the ability and willingness to pay dividends, focusing on cash generation and resilient business models.

Meanwhile, Brian Leonard, portfolio manager at Keeley Teton, told CNBC Pro that he looks for high-quality companies that pay a dividend and trade at a discount to their “intrinsic value.” He also citied spin-off situations as an investment opportunity.

CNBC Pro subscribers can read more about their stock picks here.

— Ganesh Rao

Markets may have continued their run for much of this year after a bullish 2023, but stocks pulled back last week.

Overall, however, markets — including global stocks — are still very much deep in positive territory.

The relative strength index (RSI), which measures the magnitude and speed of price moves, can be used by investors to determine if shares are overbought.

Stocks with a 14-day RSI higher than 70 are likely overbought and may be due for a pullback.

CNBC Pro screened the S&P 500 and the Vanguard FTSE All-World ex-US ETF for the most overbought names, using a 14-day RSI of higher than 70.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets are set to open lower Tuesday.

The U.K.’s FTSE 100 index is expected to open 6 points lower at 7,936, Germany’s DAX down 49 points at 18,263, France’s CAC 17 points lower at 8,103 and Italy’s FTSE MIB down 77 points at 33,609, according to data from IG. 

Data releases include Ukrainian inflation figures for March.

— Holly Ellyatt