U.S. inflation reaction, Fed decision
32 minutes ago
UK economy posted 0.2% growth in April
UK gross domestic product grew 0.2% in April, in line with economists’ expectations.
The Office for National Statistics said that growth was mainly driven by the services sector, which rose 0.3%, while manufacturing output fell 0.3% and the construction sector fell 0.6%.
This follows a 0.3% GDP contraction in March and 0.1% growth in the first quarter overall, with both the International Monetary Fund and Bank of England forecasting the economy to avoid a recession.
UK Treasury Secretary Jeremy Hunt said: “We are letting the economy grow, with the IMF saying we will grow faster than Germany, France and Italy from 2025.”
“But high growth requires low inflation, so we must be relentless in our plan to halve the rate this year to protect family budgets.”
Ruth Gregory, deputy chief UK economist at Capital Economics, said GDP growth has not been as good as it seemed. Noting that “full resistance” from higher interest rates is yet to be felt, she predicted a recession in the second half of the year.
– Jennie Reid
5 hours before
The real estate downturn in China is expected to last for years
Economists on Wall Street are warning that weakness in China’s real estate market could weigh on the economy in the years to come.
“We see persistent weaknesses in the real estate sector, primarily related to smaller cities and private developer financing, and believe there appears to be no quick fix,” Goldman Sachs economists led by Chinese economist Lisheng Wang said in a weekend statement.
Goldman economists said the housing market is expected to experience an “L-shaped recovery” — defined as steep declines followed by a slow rate of recovery.
Morgan Stanley added in a forecast report that if monetary easing fails to support the troubled sector, it will also raise concerns about a spillover effect to the rest of the Asia-Pacific region.
A “downside risk is that China’s real estate sector will not stabilize despite the easing we expect,” they said. “In this scenario, China’s confidence and financial conditions will tighten, which will have a direct impact on China’s growth, but will also have a negative impact on the region.”
– Jihye Lee
2 hours ago
CNBC Pro: This U.S. stock has climbed 10% every year for the past decade — and analysts still see upside potential
A U.S.-listed stock has risen more than 10% every year for the past decade.
According to CNBC Pro, it’s the only major stock under 85,000 that has produced such consistent returns.
Analysts at the investment bank also expect the stock to climb 19% over the next 12 months.
CNBC Pro subscribers can read more here.
– Ganesh Rao
2 hours ago
CNBC Pro: Analysts reveal $12 billion opportunity to capitalize on AI trend and name stocks benefiting
There’s one area of the semiconductor sector where analysts are particularly bullish when it comes to artificial intelligence.
Bank of America expects the segment to reach $12 billion by 2027.
According to the analysts, here’s how to play it.
– Wheat Tan
3 hours ago
European Markets: Here are the opening talks
European markets are expected to open lower on Wednesday as investors await the Federal Reserve’s latest decision.
According to IG, the UK FTSE 100 index is expected to open 17 points lower at 7,579, Germany’s DAX 21 points lower at 16,203, France’s CAC 13 points lower at 7,286 and Italy’s FTSE MIB 27 points lower at 27,530.
Euro zone industrial production figures for April are expected.
– Holly Ellyatt