## European Stocks Rise Amidst US Earnings and Central Bank Comments
European stock markets saw an upswing on Wednesday, with a keen focus on American earnings and comments from central banks. The Stoxx 600 index experienced a 0.45% increase by 8:45 a.m. BST, with the majority of sectors inching upwards. Health-care stocks led the way with a 0.9% gain. However, automotive stocks dropped by 0.46% following the release of dismal PMI figures for Germany, indicating a deepening slump in manufacturing output and a stark drop in business activity.
## Investors Anticipate Nvidia’s Performance
Globally, investors are eagerly awaiting results from California-based chip designer, Nvidia, to assess how the company matches up to high Wall Street expectations following a stellar first quarter. Nvidia shares have skyrocketed nearly 200% this year, driven by the hype surrounding its applications within the artificial intelligence sphere.
## European Tech Stocks Rally Amidst Microsoft’s New Bid
European tech stocks have rallied this week, climbing 2% on Tuesday, as investors also evaluate Microsoft’s new bid to UK regulators for gaming titan Activision Blizzard and chip firm Arm’s filing for a Nasdaq listing. Additionally, the hike in long-dated U.S. Treasury yields, with the yield on the benchmark 10-year note reaching its highest level since 2007, eased on Tuesday. Yields were also lower early Wednesday.
## Federal Reserve’s Stance on Interest Rate Hikes
In the financial world, speculation is rife about whether Federal Reserve Chair Jerome Powell will maintain a noncommittal tone in his upcoming speech in Jackson Hole on Friday or make market-moving comments that are more or less dovish than previously anticipated. Richmond Fed President, Thomas Barkin, suggested on Tuesday that there are new signs of a “reacceleration scenario” for the U.S. economy, with inflation remaining high and the economy strengthening. These factors could potentially build a case for further interest rate hikes. Barkin also stated that the recent rise in Treasury yields did not give him reason to believe the Fed had tightened financial conditions excessively.
## Central Bankers Face Pressure at Jackson Hole Symposium
The central bankers meeting at the Jackson Hole symposium will find it challenging not to unsettle the bond market, according to Altaf Kassam, head of investment strategy and research at State Street Global Advisors. Kassam expressed that the bankers are eager to avoid a repeat of the early 80s scenario where premature victory was declared on inflation, leading to eased monetary policy and a subsequent inflation spike. If history repeats itself, Kassam believes the bankers will maintain their hawkish rhetoric, stating that they are not yet finished and leaving room for additional rate hikes based on data-dependent factors.
Original Story at www.cnbc.com – 2023-08-23 07:47:00
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