European markets fall as mining stocks slide; Bayer shares at 20-year lows; Mediobanca down 8%

Stocks were little changed on Tuesday, with Wall Street shifting gears away from the election and looking toward a key inflation print on Wednesday.

The S&P 500 inched up 0.02%, while the Nasdaq Composite slipped 0.1%. The Dow Jones Industrial Average added 35 points, or 0.09%.

— Brian Evans

President-elect Donald Trump’s victory last week adds pressure to an already stressed German economy, according to the director of global macro-geoeconomics at political risk consultancy Eurasia Group.

“If you look at European markets today, [there’s] certainly still a strong echo of that Trump win. It has ramifications for all of the euro zone and there is a connection, isn’t there, between the U.S. and Germany,” Eurasia Group’s Jens Larsen told CNBC’s “Squawk Box Europe” on Tuesday.

“The elections in the U.S. [are] going to put pressure on an already stressed German economy. We are going to see, I think, a new government, hopefully at some point respond to those pressures, from the U.S. and from China,” he added.

Asked whether Germany may finally be prepared to tweak its debt brake or its rigid commitment to a balanced budget deficit, known as the schwarze null, Larsen replied, “They will most definitely at least tweak the schwarze null in order to be able to direct resources to their priorities.”

He added, “The key point here is that this is not a fiscal crisis of the, if you want, French kind, where there is a real tightness. The German debt levels are relatively low by European standards. They’re close to a primary surplus, so they are in a good fiscal position, if it wasn’t for the debt brake.”

— Sam Meredith

Semiconductor company Infineon on Tuesday said it was expecting its revenue in its 2025 fiscal year to be slightly lower than that recorded in its 2024 fiscal year, which ended on Sept. 30.

The company reported that its revenue in the fiscal year 2024 came in at 14.955 billion euros ($15.87 billion), which it said was down 8% from the previous year.

Infineon Chief Financial Oofficer Sven Schneider told CNBC that the company has seen “a very pronounced inventory management on behalf of our customers” which has slowed demand in the current and potentially next quarter.

Schneider said that the cyclical and the structural picture needed to be differentiated when it comes to the outlook for the coming months.

“If we think structural, there are always these five mega trends, its electrification, its software defined vehicle, its IOT [internet of things], its renewables and even more and more its data center/AI. So these structural trends are unbroken, they are very strong,” he said.

On the cyclical side, two factors beyond geopolitical and macro uncertainty were in play, Schneider added.

“There is this very pronounced inventory management and on top of that, the customers are moving back to a very short term order behavior and if you take these things together and if you look at the inventory also in the supply chain … there is a very healthy, strong demand but before the demand can be translated into new and higher revenues the inventories need to be first digested,” he explained, saying that this would impact the coming quarters and had contributed to Infineon shifting its outlook.

Shares of Infineon were up around 2.9% as of 12:47 p.m. London time as investors brushed off the weak outlook.

— Sophie Kiderlin

Italy’s Mediobanca fell toward the bottom of the Stoxx 600 index after the lender posted weaker-than-expected revenue estimates and lowered its full-year net interest income forecast.

Shares of the Milan-listed stock plunged over 8% on the news.

— Sam Meredith

The pan-European Stoxx 600 index traded 1% lower at around 11:15 a.m. London time, with major bourses and almost all sectors in negative territory.

France’s CAC 40 index slipped 1.2%, while Britain’s FTSE 100 and Germany’s DAX fell 0.9% and 0.8%, respectively.

— Sam Meredith

Germany is set to hold a federal election in February, earlier than Chancellor Olaf Scholz had originally proposed after his ruling coalition collapsed last week.

The election is set to be held on February 23, according to sources within the parliamentary group of Scholz’ social democratic party (SPD).

Read the full story here.

— Sophie Kiderlin

Shares of British medical products and technologies firm ConvaTec surged as much as 21% during morning deals, hitting the top of the Stoxx 600 index after the company raised its full-year sales guidance.

The company increased its guidance for full-year 2024 organic sales growth to 7.25% to 8%, up from a previous forecast of 6% to 7%.

Meanwhile, shares of U.K. energy firm Drax jumped over 6% after the company said it now expects full-year core earnings to come in around the top end of analysts’ consensus estimates. The London-listed stock price hit a new 52-week high on Tuesday.

— Sam Meredith

Shares of German life sciences company Bayer tumbled to the bottom of the Stoxx 600 after the company reported weaker-than-expected third-quarter earnings, cut its full-year outlook and warned of “likely declining” earnings next year.

Shares of the company fell around 11% to notch 20-year lows.

— Sam Meredith

A Dutch court on Tuesday dismissed a landmark climate ruling against Shell, after the oil giant was ordered to drastically reduce its global carbon emissions back in 2021.

The outcome, which comes during the opening days of the COP29 climate summit in Azerbaijan, marks the latest twist in a precedent-setting case that could have far-reaching implications for the future of climate litigation.

Read the full story here.

— Sam Meredith

The U.K.’s unemployment rate rose to 4.3% in the three months to September as wage growth continued to slow, data from the Office for National Statistics showed.

Employee pay, excluding bonuses, increased 4.8% over the quarter, the lowest rate in more than two years, though annual growth in total earnings including bonuses ticked up to 4.3%.

The reading comes after the Bank of England cut interest rates last month citing progress in cooling the labor market.

“Wage growth has been a real sticking point for the Bank of England, and though it remains well above the Bank’s 2% inflation target and this uptick will be unwelcome as far as the Bank is concerned, it is likely we will see a marked slowdown in the coming months,” Lindsay James, investment strategist at Quilter Investors, said in a note.

— Karen Gilchrist

British drugmaker AstraZeneca raised its full-year sales and profit outlook after third-quarter results beat expectations amid demand for its care and rare disease medicines.

Total revenue came in at $13.57 billion for the three month period, above the $13.1 billion expected by analysts, according to Reuters.

“We are highly encouraged by the broad-based underlying momentum we are seeing across our company in 2024, and growth looks set to continue through 2025, providing a solid foundation to deliver on our 2030 ambition,” CEO Pascal Soriot said in a statement.

— Karen Gilchrist

German inflation rose 2% year-on-year in October, a slight uptick from the previous month’s 1.6% reading, fresh data from showed Tuesday.

Price rises in the country were primarily driven by higher food and services costs, while energy prices shifted lower, the Federal Statistical Office Destatis said.

Harmonized inflation came in at 2.4% for the month, confirming preliminary data.

— Karen Gilchrist

President-elect Donald Trump’s return to the White House has sent ripples through global financial markets, with many investors looking to recalibrate their portfolios for a dramatically different policy landscape ahead.

The Republican sweep of the presidency and, potentially, both houses of Congress has triggered what analysts call the return of “Trump trades” — but with key differences to 2016 that could reshape the investment outlook.

Wall Street banks have digested the potential impact of Trump’s win on U.S. bonds, Asian and European stocks, and currencies and what lies ahead for investors.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Chinese markets are back in the spotlight after a slew of government stimulus measures over recent weeks.

Friday’s news of a five-year 10 trillion Chinese yuan ($1.4 trillion) debt swap program disappointed investors, however, falling short of calls for more direct support for the economy.

For many market participants — including Pella Funds’ Jordan Cvetanovski — this means taking a longer view when it comes to investing in the Asian powerhouse.

“The markets are always impatient. They want to see a big sugar high immediately, and they want to see a big bazooka … However, as we’ve discovered over many years, the Chinese government … does things in a more measured fashion,” he said.

As investors ponder how to navigate the Chinese market, Bernstein named a number of stock opportunities.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

European markets are expected to open in negative territory Tuesday.

The U.K.’s FTSE 100 index is expected to open 18 points lower at 8,054, Germany’s DAX down 93 points at 19,355, France’s CAC down 34 points at 7,392 and Italy’s FTSE MIB down 157 points at 33,659, according to data from IG.

On Tuesday, earnings come from Infineon, Bayer, Vodafone and AstraZeneca. Aside from the German inflation data, UK unemployment and European and German ZEW economic sentiment figures are due.

— Holly Ellyatt