Europe stocks extend decline in shadow of Middle East tensions; Ericsson rose 6%

Crude oil futures fell for a second day on Tuesday as the US predicted a limited response from Israel to Iran’s unprecedented airstrike, easing fears that the Middle East is on the brink of a wider regional war.

The West Texas Intermediate contract for May delivery lost 52 cents, or 0.61%, to settle at $84.89 a barrel. The June Brent futures contract was down 49 cents, or 0.54%, at $89.61 a barrel.

Four US officials told NBC News that they expect Israel’s response to an Iranian attack to be limited in scope and likely to include attacks on Iranian forces and their proxies outside of Iran.

“Tensions are high and it is difficult to predict the next moves of either party, but all important signs point to an easing of hostilities and restraint in the short term,” said George Lyon, senior vice president at Rystad Energy, a consulting firm.

– Spencer Kimball

Shares of UK-based fintech Wise fell 8% at 10:20 a.m. in London after the company issued a trading update saying fourth-quarter revenue rose 36% year-on-year to £277.2 million ($344.8 million).

That was less than the £316 million analysts had predicted, according to FactSet data.

The company, which facilitates international money transfers, saw active customers grow 29% to 7.9 million in the quarter.

– Jenny Reid

European stocks opened lower on Tuesday, with the benchmark Stoxx 600 index down 1.2% at 9 a.m. London time, its lowest level since March 7.

All sectors traded in losses. The UK’s FTSE 100, France’s CAC 40 and Germany’s DAX were all 1.3% lower.

– Jenny Reid

Dr. Martens shares fell a record 30% in early deals.

Trading of the company’s shares on the London Stock Exchange has been temporarily suspended.

The company also said that CEO Kenny Wilson will step down in March 2025 and will be replaced by Chief Brand Officer Eje Nwokori.

In a note on Tuesday, analysts at RBC flagged negative sentiment on the stock and said markets will focus on near-term 2025 guidance.

The UK employment rate fell to 74.5% from 74.8% in December and January, figures released by the Office for National Statistics showed.

Unemployment rose to 4.2% for the third reading, up from 3.9% a year ago.

Wage growth excluding bonuses was 6% between December 2023 and February 2024, down slightly from 6.1% in November 2023 to January 2024, but higher than the 5.8% reading expected by economists polled by Reuters.

“Overall, if activity in the labor market had not clearly weakened, we would be a little concerned that the UK’s inflation process is stalling like it has been in the US,” said Paul Dales, UK chief economist at Capital Economics. , said the note.

“But with employment falling sharply and the unemployment rate rising, we suspect wage growth will moderate in the coming months. Even if the Fed doesn’t move until September, the bank may allow interest rates to be cut in June.”

– Jenny Reid

Swedish telecoms firm Ericsson on Monday reported operating profit excluding restructuring charges of 4.3 billion Swedish kroner ($393.8 million), up 7% year-on-year and well ahead of analysts’ expectations in an LGEG poll of 1.7 billion kroner.

Organic sales fell 14%, with a 19% decline in its networks unit, which includes 5G services.

The company said sales are expected to stabilize in the second half of the year in light of recent contract gains and normalization of inventory levels in North America.

CEO Börje Ekholm told CNBC’s “Squawk Box Europe” that the company is focusing on its pricing and ensuring it has a competitive product, which is behind the decision announced last month to lay off about 1,200 workers.

Ekholm said Ericsson is using artificial intelligence to make its complex 5G networks work better.

– Jenny Reid

Major indexes resumed their selloff on Monday, and the Nasdaq Composite slipped below its 50-day moving average as the index fell 1.7%.

This is the first time since November 3, 2023 that the tech-heavy index has slipped below this key threshold. If it closes below that level, it will be the first time since November 2, 2023. The index has risen more than 30% in the past 12 months.

The 50-day moving average is a technical indicator that traders look to to gauge short-term trading trends. A close below this level indicates an impending downtrend for an asset.

– Darla Mercado, Nick Wells

Crude oil prices were volatile in April amid heightened geopolitical risks.

CNBC Pro tested for stocks in the MSCI World Energy Index that are highly correlated and inversely correlated with international benchmark Brent crude oil prices over the past week, month and year.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Oil markets on Monday eased after Iran’s weekend airstrike on Israel with US crude, and the global benchmark both edged lower.

The West Texas Intermediate contract for May lost 25 cents, or 0.29%, to settle at $85.41 a barrel. June Brent futures fell 35 cents, or 0.39%, to settle at $90.10 a barrel.

Markets had already priced in the risk from an attack by Iran that had been telegraphed days earlier, and traders took a breather as Israel and the US intercepted almost all of the missiles fired.

What happens next depends on how Israel responds.

“What’s not priced into the current market in our view is the potential continuation of direct conflict between Iran and Israel,” Maximilian Layton, head of commodities research at Citi, said in a note to clients. Oil prices could rise above $100 a barrel depending on how Israel responds to the attack, the analyst wrote.

– Spencer Kimball

Asian markets have had a mixed start to the year – with investors looking keenly to India, Japan and a rising China.

Looking ahead, those looking for pockets of opportunity in this area can look to Morgan Stanley’s selection of “alpha” stocks. Alpha stocks have the ability to beat the market.

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– Amala Balakrishnar

European markets are expected to start lower on Tuesday.

The UK’s FTSE 100 index was down 87 points at 7,888, Germany’s DAX was down 214 points at 17,784, France’s CAC was down 96 points at 7,938 and Italy’s FTSE MIB was down 422 points at 32,870 from IG.

Revenues from Ericsson and LVMH are set. Germany’s ZEW survey on economic sentiment will be released.

– Holly Elliott