European stocks tick higher; UK and U.S. markets closed

Joost Van Leenders, senior investment strategist at Van Lanschot Kempen, discusses the dynamics in Europe and the U.S., and what catalysts could affect markets looking ahead.

— Katrina Bishop

Olli Rehn, head of the Bank of Finland and a governing council member of the European Central Bank, said on Monday that inflation in the region was falling in a “sustained way.”

“Thanks to this disinflationary process, inflation is converging to our 2% target in a sustained way, and the time is thus ripe in June to ease the monetary policy stance and start cutting rates,” he said in a speech published on the website of the Finnish central bank.

“This obviously assumes that the disinflationary trend will continue and there will be no further setbacks in the geopolitical situation and energy prices.”

That comes as inflation in the euro area held steady at 2.4% in April. It marked the seventh straight month the headline rate has been below 3%, despite a slight rebound in the rate in December.

Inflation figures for May are due on Friday.

— Katrina Bishop

European markets were broadly higher in early trade Monday, albeit only marginally.

France’s CAC 40 was 0.13% higher and Germany’s DAX was up 0.16% at 8:40 a.m. London time. Spain’s Ibex 35 was around 0.17% in the green, while Italy’s FTSE MIB was flat.

U.K. markets are closed for a national holiday.

— Katrina Bishop

France’s CAC 40 is expected to open 5 points higher at 8,098, while Germany’s DAX is seen up 17 points at 18,709.

Italy’s FTSE MIB is expected to rise 15 points and Spain’s IBEX is seen 12 points higher.

U.K. markets are closed for a nationwide holiday.

— Katrina Bishop

Even as big tech names power the market higher and dominate headlines, there are signs of broadening, according to Ross Mayfield, investment strategy analyst at Baird.

“While there was some angst last year over heavy concentration in Big Tech stocks, the market has broadened out significantly in recent months,” Mayfield said.

He noted that “While concentrated markets have not historically led to bad returns, it is usually a sign of a healthier economy when breadth — the number of individual stocks and sectors that are doing well — is better (more legs supporting the stool, so to speak).”

— Hakyung Kim

India’s main stock indexes hit intraday record highs for the third straight session, with the Nifty 50 index up 0.15% and the S&P BSE Sensex Total Return index last up about 0.25%.

So far this year, the BSE Sensex has risen 4.6%, while the Nifty 50 has risen 5.8%, according to LSEG data.

Last week, the Reserve Bank of India approved the highest-ever dividend to the government, with a 2.11 trillion rupee ($25.3 billion) cash injection, which was significantly higher than analysts’ and government predictions. 

Focus has also been on the general elections in India which kicked off on April 19. Prime Minister Narendra Modi reportedly said the stock markets will touch fresh highs on June 4 when the results of the 2024 elections are announced.

Modi is widely expectedly to secure a third term in office.

— Shreyashi Sanyal

Investor darling Nvidia continued its artificial intelligence-fueled boom, with its earnings beating expectations last week.

“The biggest question that remains is how long this runway is,” said Lucas Keh, analyst at research firm Third Bridge.

Wall Street is still mostly bullish on Nvidia. But investors who are worried about being overexposed to Nvidia or who want to make their portfolios more balanced could consider replacing their Nvidia allocation or complementing it with other growth stocks with a low correlation to the chipmaker.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Chipmaker Nvidia has rallied 15% week-to-date. The stock has surged following its better than expected quarter earnings report on Wednesday, which indicated ongoing strong demand for its artificial intelligence chips.

Shares topped $1,000 for the first time this week on the earnings.

As the price of gold hits an all-time high and silver rallies to a multi-year high, Bank of America has identified four exchange-traded funds (ETFs) that offer attractive exposure to precious metals.

These funds reflect baskets of physical precious metals, with varying allocations to silver, gold, palladium, and platinum.

The bank’s research also suggests that a portfolio with 40% exposure to broad commodities would have outperformed a portfolio with 40% United States Treasury bonds by 0.8% per year since 1945.

CNBC Pro subscribers can read more here.

— Ganesh Rao