European Stocks Close Lower With U.S. Debt Ceiling Talks in Focus; Commerzbank Down 4%

A Trader reacts as a screen displays the Fed rate announcement on the floor of the New York Stock Exchange (NYSE) in New York City, May 3, 2023.
Brendan McDermid | Reuters

This is CNBC's live blog covering European markets.

European markets were mixed on Wednesday, as investors kept an eye on U.S. debt ceiling negotiations.

The pan-European Stoxx 600 index closed 0.15% lower despite morning gains in U.S. stocks, following signs of progress in the talks. Germany's DAX posted a 0.3% increase, while the U.K.'s FTSE 100 was down 0.4%.

Food and beverage stocks recorded the biggest losses, down 1.3%. They were followed by utilities, which dropped 1.1%. Travel led gains with a 0.9% uptick, while industrials rose 0.6%.

Traders also took stock of further earnings results, with Commerzbank, Siemens and JD Sports adjusting their outlooks for the year ahead.

Asia-Pacific markets traded mixed against the backdrop of debt ceiling negotiations. Quad leaders canceled a planned meeting in Sydney next week, as Biden cut short his Asia trip to return to the U.S. for talks on the debt ceiling.

We expect Germany will be in a mild recession this year, says Commerzbank CFO

Bettina Orlopp, Commerzbank CFO, discusses Germany's economic outlook and its commercial real estate sector, among other things.

U.S. stocks open higher

The Dow jumped more than 100 points, while the S&P 500 climbed 0.5%. The Nasdaq Composite advanced 0.4%.

— Fred Imbert

Speaker McCarthy says he thinks the U.S. won’t default as debt talks inch forward

House Speaker Kevin McCarthy told CNBC in an interview he does not think the U.S. will default on its debt as tense negotiations over the debt ceiling continue.

"I think at the end of the day we do not have a debt default," McCarthy told CNBC's "Squawk Box."

Read more here.

Consumers want to feel the energy of in-store shopping, JD Sports CEO says

JD Sports CEO Régis Schultz told CNBC's "Squawk Box Europe" consumers are demanding online and in-store shopping, and the company is well-placed to capitalize on post-pandemic trends.

Shares of the sportswear-seller were down 6.2% in early afternoon trade amid a 0.4% decline in European retail stocks, despite it forecasting underlying profit would surpass £1 billion ($1.246 billion) for the first time this year, and announcing a 12% rise in full-year sales.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said an adjusted item charge of £550 million from acquisitions and disposals along with a warning of macro-economic headwinds may be pulling down sentiment.

"JD Sports has raced ahead as the demand for the latest shoes and athleisure-wear for now shows little sign of abating," she added. "It's now ramping up new store openings, taking advantage of the renewed enthusiasm to browse in bricks and mortar shops once more."

Stocks on the move: Watches of Switzerland drops 12%, Hexatronic down 8%

Shares of Watches of Switzerland slumped as much as 12% in early trading after the luxury watchmaker forecast a "modest sales decline" for the first quarter of 2024. The group then estimated sales would normalize in the following quarter.

The company recorded revenue growth of 25% from the previous year, and reported that demand is strong and continues to exceed supply in what it described as "a more challenging trading environment."

Shares of Hexatronic dropped 8% in morning trade after the group announced it would repurchase up to 1.2 million of the company's shares on Sweden's Nasdaq index.

The Swedish fiber optic infrastructure company said the move is "primarily to reduce dilution caused by the company's outstanding share-based incentive programs" and to use the shares to pay for future acquisitions.

— Hannah Ward-Glenton

Commerzbank down 5% despite strong results

Shares of Commerzbank fell 5% in early trading after the bank posted its first-quarter results.

The results were better than expected, with net profit having nearly doubled in the three-month period.

The bank also raised its forecast to 7 billion euros ($7.6 billion) for the current year, up from the previous projection of 6.5 billion euros.

Commerzbank did say future results were dependent on the performance of its mBank unit in Poland and how it handles Swiss franc mortgages, and also noted a "mild recession" had been factored into its outlook.

— Hannah Ward-Glenton

Siemens raises outlook after strong second-quarter sales; shares up 2%

Siemens raised its full-year sales and profit expectations after posting better-than-expected sales in the second quarter.

The German manufacturer has seen its order book continue to increase and has benefited from the easing of global supply chain bottlenecks.

Shares of Siemens ticked 2% higher just after market open.

The full story can be found here.

— Hannah Ward-Glenton

UBS expects $17 billion hit from Credit Suisse takeover

UBS expects a financial hit of around $17 billion as a result of its takeover of Credit Suisse, the Swiss bank said in a presentation.

It anticipates a $13 billion loss from fair value adjustments of UBS and Credit Suisse's combined assets and liabilities, topped off with a $4 billion hit in potential litigation and regulatory costs.

Shares of UBS were little changed at the start of trading, and were down 0.2%.

UBS agreed to take over its ailing rival for $3.2 billion in March as regulators attempted to settle the turbulent global banking sector.

— Hannah Ward-Glenton

CNBC Pro: Morgan Stanley says Tesla among the EV stocks to benefit as supply chain shift

Morgan Stanley has identified several stocks to invest in as electric vehicle battery manufacturing shifts to the West.

As countries aim to reduce their dependency on China, which currently dominates 90% of the EV battery market, they will need to create a new supply chain for a decarbonized future, according to the Wall Street bank.

It identified a number of potential winners and losers from the process.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Citi names its top biotech and pharma stock picks, giving one nearly 90% upside

The healthcare sector outperformed in Europe, India and China last month, according to Citi.

The bank named its top buy-rated picks worldwide, including some with big potential upside.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are expected to open in negative territory Wednesday.

The U.K.'s FTSE 100 index is expected to open 11 points lower at 7,739, Germany's DAX 4 points lower at 15,904, France's CAC 11 points lower at 7,393 and Italy's FTSE MIB 14 points lower at 26,909, according to data from IG.

Earnings are set to come from Commerzbank, Experian, JD Sports, British Land. Data releases include final euro zone inflation figures for April and new car registration figures for Germany, France, the U.K. and Italy.

— Holly Ellyatt

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