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Eurozone PMI falls to 20-month low as recession outlook rises

Eurozone trade activity fell further than expected last month, raising the likelihood of a recession in the common 19-member currency bloc.

S&P Global’s Final Composite PMI for the Eurozone (Purchasing Managers Index), considered a reliable indicator of economic health, fell to a 20-month low of 48.1 in September from 48.9 in August , below a preliminary estimate of 48.2. Any reading below 50 indicates a contraction.

-Elliot Smith

Stocks on the move: Nordnet down 6%, Avanza down 5% after September numbers

Swedish financial services companies Advance and Nordnet fell 5% and 6%, respectively, in early trading after the release of their September monthly figures.

On top of the Stoxx 600, German chipmaker Infineon gained 4%.

More and more German companies are planning price increases, according to the Ifo Institute

Other German companies plan to raise prices in the coming month, according to a new Ifo Institute survey released on Wednesday.

Economy-wide price expectations for the month ahead rose to 53.5 points in September from a seasonally adjusted 48.1 in August. The food price indicator stood at 100 points, against 96.9 in August.

“Unfortunately, this probably means that the wave of inflation is not about to subside,” says Timo Wollmershäuser, head of forecasts at Ifo.

“Especially when it comes to gas and electricity, the price pipeline is not exhausted yet.”

-Elliot Smith

CNBC Pro: Bank of America Reveals Its Global Picks for This Quarter, Giving Stock a More Than 100% Rise

Rising interest rates, soaring energy prices and political unrest in some parts of the world hurt stocks in the last quarter of this year.

To help investors navigate the volatility, Bank of America released its top “short-term stock recommendations” for the next quarter, which should “significantly outperform” their peers.

CNBC Pro subscribers can read about five of their stock picks here.

—Ganesh Rao

The dollar index falls back to 110

A factor helping stock markets on Tuesday could be a slightly weaker dollar, which fell for the fifth day in a row.

The DXY US Dollar Currency Index was down 1.5% in afternoon trading at 110.06. The index traded as high as 114.78 last week amid fears of a default in the UK government bond market.

The pound and the euro were each trading more than 1% against the dollar on Tuesday. The greenback was also down against the Japanese yen.

—Jesse Pound, Gina Francolla

CNBC Pro: Market heading for ‘best week of the year,’ says pro – and names 2 stocks to play in it

Market veteran Phil Blancato, whose firm manages more than $4 billion in assets, said he expects next week to be a “turnaround week” for the markets.

Investors should take the opportunity to “jump into the market,” he said, naming two stocks to take advantage of the coming rally.

Pro subscribers can find out more here.

— Zavier Ong

Stifel’s Barry Bannister says there’s ‘room for a rally’ after two straight days of gains

Stifel’s chief equity strategist, Barry Bannister, said stocks could rise further after this week’s strong two-day rally.

“I don’t think you need to worry about a recession until the second half of 23,” Stifel chief equity strategist Barry Bannister said on CNBC’s “Closing Bell: Overtime” on Tuesday. “So there is room for a rally early next year.”

The strategist said there could be a “conditional pause” at the December meeting as the Federal Reserve considers the impact of its interest rate hike plan on inflation.

“Leading inflation indicators are all down, global liquidity has tightened significantly. They don’t want to kill the patient to cure the disease,” Bannister said. “And if the data kept going, then the pause would last, and if the data didn’t keep going, it would come back up and we’d go right back down.”

—Sarah Min

CNBC Pro: It’s not the bottom of the market, says Morgan Stanley, citing 3 things that need to happen first

There is unlikely to be a lasting market bottom unless three conditions are met, according to Morgan Stanley.

“We…remind readers that the later legs of every bear market are very difficult to trade as volatility becomes extreme,” they wrote. “None of the conditions we were looking for to end this bear market are in place.”

Pro subscribers can learn more here.

—Weizhen Tan

European markets: here are the opening calls

European stocks are heading for a lower open on Wednesday, bucking a positive trend seen in the previous session.

Britain’s FTSE index is expected to open down 27 points to 7,059, Germany’s DAX down 59 points to 12,606, France’s CAC 40 down 25 points to 6,005 and Italy’s FTSE MIB down 112 points at 21,426, according to data from IG.

Wednesday’s expected declines come after European markets rebounded yesterday, with the pan-European market Stoxx 600 closed up 3%. Travel and leisure stocks jumped 6.1% to lead the gains as all sectors and major exchanges entered positive territory.

The Pound sterling pink tuesday after uk dramatic change in government policy and UK sovereign bond yields also fell after a sharp sell-off last week.

Wednesday’s data releases include final Eurozone PMI data for September and German import and export data for August. Revenue comes from Tesco and Bang & Olufsen.

—Holly Ellyatt

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