Europe stocks close slightly higher, snap longest losing streak since 2018

European gas prices moved sharply higher Friday as workers at Chevron’s Australian natural gas facilities went on strike, prompting fears that a prolonged halt to production could squeeze global supplies.

The front-month gas price at the Dutch Title Transfer Facility (TTF) hub, a European benchmark for natural gas trading, was last seen trading 4.4% higher at 34 euros ($36.47) per megawatt hour after rising up to 10% earlier in the session.

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— Sam Meredith

Ludovic Subran, chief economist at Allianz, weighs in on the U.S. economic outlook, saying further volatility likely lies ahead, and discusses what this means for investors.

Shares of British IT services provider Computacenter were 15% higher at midday London time as it beat estimates for its half-year results.

The company reported revenue up by 26.8%, with 5.3% growth in adjusted earnings per share.

London-based manufacturer Melrose Industries fell from near the top of the Stoxx 600 index in Thursday’s session to the bottom in Friday trade, dipping 4.5% after reaching an all-time high.

Investors continued to assess its upgraded guidance and news its CEO and co-founder Simon Peckham will step down in March.

— Jenni Reid

The German economy will contract by 0.4% in 2023, according to research by the country’s DIW economic research institute. The organization lowered its forecast for the year following a surprisingly weak quarter for Europe’s biggest economy.

The DIW had previously said Germany’s economy would contract by 0.2%, making it the only major global economy set to shrink in 2023.

— Hannah Ward-Glenton

German inflation eased to 6.4% in August, data from the federal statistics office showed on Friday, confirming preliminary data. The figure is harmonized to allow for comparisons across the Euro zone.

Increases in food and energy prices exceeded overall inflation and were responsible for keeping the figure high, President of the Federal Statistical Office Ruth Brand said in a press release.

“The base effect stemming from last year’s 9-euro ticket was also apparent in August, when it drove inflation up and reduced the dampening effect of the Germany ticket on prices. This base effect will cease to apply from the next month onwards,” she added.

Headline inflation for the Euro zone as a whole was 5.3% in August, according to preliminary data, exceeding the 5.1% anticipated by economists polled by Dow Jones.

— Hannah Ward-Glenton

European markets are set to open mixed, according to IG data:

Britain’s FTSE is forecast to drop 2.4 points to 7,438.2, while Italy’s FTSE MIB is expected to fall 3.6 points to 2,8158.9. The French and German markets are set to increase at the open, with the CAC up 16 points to 7,204.8, and the DAX up 27.7 points to 15,736.3.

— Hannah Ward-Glenton

UBS says that European small and mid-cap stocks are making a comeback, having outperformed large-cap companies this summer.

UBS’ analysts explain why, and name their top stocks for the rest of the year.

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— Amala Balakrishner

The likelihood that inflation numbers are going to remain stubbornly high for a while could mean more interest rate increases, former St. Louis Federal Reserve President James Bullard said Thursday.

In a CNBC interview, the the current dean of the Mitchell E. Daniels Jr. School of Business at Purdue University raised the prospect of more policy tightening as core inflation is stuck around 4%.

“That’s raising the risk that the Fed will have to follow through on its promise rate increase sometime in the next couple of meetings, and there’s some risk that they’d have to go a little bit higher even from there,” Bullard told CNBC’s Steve Liesman.

Inflation numbers “have got to come down into the 3% range, and eventually the 2% range, and if that is not happening and they hang up too high, the Fed may have to do more,” he said.

—Jeff Cox

Analysts at Barclays have identified electrification as a “mega theme” and have named several stocks set to benefit.

“The electric grid plays a key electrification and energy transition role,” the analysts wrote in a research note dated Aug. 16.

“At the center of the electrification mega theme, which encompasses EVs, renewables, energy storage, smart buildings, heat pumps, and more, is an aging electric grid that is key to ensuring a clean, reliable, affordable, and equitable energy transition.”

The bank named a number of companies it said were “tied to changing grid trends and provide their end-market exposure.”

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— Amala Balakrishner