stocks, news, data and results

Javier Quesada, senior researcher at Valencia’s Institute for Economic Research, says government spending must be slowed and taxes must be raised to lower the debt-to-GDP ratio.

UK Science, Innovation and Technology Secretary Chloe Smith discusses the country’s strategy to boost its AI industry.

With European markets broadly positive in afternoon trade, chip makers ASM International was among the top performers, climbing 6.3%.

The technology has been enhanced by Nvidiapp results hit Thursday, with Dutch semiconductor company ASML 3% higher.

French suppliers of car parts Faurecia and Valeo were also top performers, rising 6.6% and 4.7%, respectively, after Jefferies analysts upgraded both stocks to a “buy.”

At the other end of the Stoxx 600 index, European property company Around the city fell 2.8%, extending its nearly two-year decline as it struggles with the higher interest rate environment. Bloomberg reported on Thursday that it is considering selling its Center Parcs portfolio to reduce debt.

Fintech Wise was down 2.3% as investors appeared jittery about Monday’s message that its CFO is leaving the company next year.

—Jenni Reid

Michael Yoshikami, founder and CEO of Destination Wealth Management, discusses the outlook for monetary policy and why a US recession would be positive for markets.

UK Chancellor of the Exchequer Jeremy Hunt told Sky News he would be comfortable with Bank of England rate hikes pushing the economy into recession as long as inflation falls.

“Because ultimately inflation is a source of instability,” Hunt said. He added that fiscal and monetary policy must work in line “to balance the books so that the markets, the world can see that Britain is a country that pays its own way.”

Money markets raised their bets on the central bank’s top rate from 4.75% to 5.5% after figures on Wednesday showed inflation fell less than forecast.

The Bank’s base rate is currently 4.5% and a 25 basis point increase in June is widely expected.

Gilded harvests have been moves higherapproaching levels last seen in the wake of former Prime Minister Liz Truss’s market-shattering mini-budget last October.

The International Monetary Fund joined the Bank of England this week proverb it no longer expects the UK to enter recession this year, but noted the outlook was “dim”.

Germany entered a technological recession in the first quarter, revised statistics published Thursday showed.

—Jenni Reid

European stock markets regained some positive momentum early Friday, with the benchmark Stoxx 600 index up 0.4% at 8:30 a.m. London time.

Britain’s FTSE 100 climbed 0.4%, while Germany’s DAX and France’s CAC were up 0.1% and 0.2% respectively.

Britain’s retail sales volume rose 0.5% month-on-month in April, the Office for National Statistics said on Friday.

Economists polled by Reuters had expected a 0.3% increase after a 1.2% volume decline in March.

However, volumes were down 3% compared to the previous year as the amount spent by consumers increased by 4.7%, showing the impact of inflation on consumers.

Ashley Webb, UK economist at Capital Economics, said better weather, increases in state pensions, social benefits and the minimum wage, and a government cost-of-living payment to low-income households were likely to boost the monthly figure.

“Overall, while the outlook for retail trade appears to be improving, we expect further rate hikes, from 4.50% now to a peak of 5.25%, and that they will remain high until the end of next year. It will meaning real consumer spending is more likely to fall later this year than to rise,” Webb added.

—Jenni Reid

European markets are expected to open mixed on Friday.

Britain’s FTSE 100 index is expected to open 3 points lower at 7,575, Germany’s DAX 0.5 points higher at 15,804, France’s CAC up 5.2 points to 7,239 and Italy’s FTSE MIB 87.5 points higher at 26,508, according to data from IG.

—Jenni Reid

Parts of the market are in overbought territory, but Morningstar’s Dave Sekera says some stocks the company is bullish on are still trading at a discount to their fair value estimates.

They include a tech giant and a major US bank.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Earnings season is over and Goldman Sachs has identified three stocks with great upside potential.

In the first quarter, the investment bank said, investors focused on the health of the global consumer and balancing post-pandemic growth with increased margins. Looking ahead, however, investors are expected to focus on large companies with profitable business models.

Based on their first quarter results, Goldman expects shares of three companies identified to rise more than 75%.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Congressional leaders and President Joe Biden were close to a tentative agreement to raise the debt ceiling on Thursday, according to a report from Reuters citing people familiar with the matter.

The tie between Biden and House Speaker Kevin McCarthy is pegged at $70 billion in discretionary spending, the report said.

—Brian Evans

Boston Federal Reserve President Susan Collins believes that the central bank there stop raising interest rates.

In a speech Thursday to graduates of the Community College of Rhode Island, Collins indicated she sees “signs of moderation” from inflation that could negate the need for future hikes.

“I believe we may be at, or close to, the point where monetary policy may pause to raise interest rates. This will provide an opportunity to more fully assess the impact of the measures taken so far and the general tightening of credit conditions on economic activity, she said in prepared remarks.

However, market pricing has changed, with expectations now that the Fed will raise rates by a quarter of a percentage point by the July meeting.

-Jeff Cox