Europe stocks close at fresh record highs; UK exits recession

A slew of commentary from the Bank of England and a better-than-expected economic growth number have left traders and investors scrambling to refine their bets on when the U.K. central bank will start to cut its benchmark rate.

Markets on Friday were pricing in an around 48% chance of a rate cut in June according to LSEG data, slightly higher than Thursday’s 45% probability.

Economists at Swiss Bank UBS were among those who shifted their view on when the BOE may cut interest rates, saying they were now expecting the first rate cut to take place in June rather than August.

“The broader message and the tone of the MPC were more dovish than we had anticipated,” they said in a note published following the BOE’s latest interest rate decision.

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— Sophie Kiderlin

Investors see a “brighter future” for European markets, according to Daniel Morris, chief market strategist at BNP Paribas Asset Management.

It comes as anticipation grows for interest rate cuts in Europe and the U.K.’s first-quarter gross domestic product beat expectations.

“As equities do we’re looking to the future I think. Generally speaking investors are seeing a brighter future ahead for European markets and they’re reflecting that now,” he told CNBC’s “Squawk Box Europe” on Friday.

Major European stock indices, including Germany’s DAX, France’s CAC 40 and the U.K.’s FTSE 100, as well as the pan-European Stoxx 600, hit fresh intraday record highs on Friday.

— Sophie Kiderlin

The Europe listed shares of medical technology firm Getinge tumbled 7.8% on Friday after the U.S. Food and Drug Administration earlier in the week issued a safety warning about the company’s heart devices.

The FDA advised health care providers to move away from Getinge’s devices over concerns that issues and risks of recently recalled devices had not been addressed sufficiently.

Getinge did not immediately respond to CNBC’s request for comment.

Meanwhile, Iveco Group shares were last trading 6.83% higher on Friday after the Italian auto company released its first-quarter earnings. Adjusted net income and earnings before tax and interest soared in the first three months of the year compared to the same time period a year earlier, the company said.

— Sophie Kiderlin

European markets opened higher on Friday as positive momentum continued into the end of the week and the U.K. posted first-quarter gross domestic product that was better than expected.

The pan-European Stoxx 600 was 0.52% higher at 8:08 a.m. London time. The U.K.’s FTSE 100 was last up 0.41%, while Germany’s DAX rose 0.39% and France’s CAC 40 was 0.45% higher.

— Sophie Kiderlin

The U.K. economy has exited the shallow recession it entered in the second half of 2023, gross domestic product data released on Friday showed.

GDP rose 0.6% in the first quarter, compared to expectations for 0.4% growth. The production sector grew by 0.8% in the first three months of the year, while construction contracted by 0.9%

On a monthly basis, the economy expanded by 0.4% in March — an acceleration from February’s 0.2% growth.

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— Sophie Kiderlin

European markets are expected to open higher Friday.

The U.K.’s FTSE 100 index is expected to open 24 points higher at 8,406, Germany’s DAX up 47 points at 18,734, France’s CAC 29 points higher at 8,217 and Italy’s FTSE MIB up 85 points at 34,121, according to data from IG.

Earnings are due from IAG and Mediobanca.

— Sophie Kiderlin

A bumpy few months for mega caps like the “Magnificent Seven” have led some investors to question whether now is the best time to be buying growth stocks.

One investor says growth stocks still offer opportunities — but it’s time to get selective.

“Growth stocks will continue to outperform value stocks, generally speaking. But valuations are stretched so we are looking for higher quality names,” Adam Coons, portfolio manager at Winthrop Capital Management, told CNBC Pro on May. 1.

Coons named three of his favorite under-the-radar growth stocks to consider.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

The global semiconductor industry is set for a “transformation” — thanks to artificial intelligence PCs loaded with chips developed by British chip designer Arm, according to Morgan Stanley.

That’s because more powerful PCs are needed to run AI applications.

Arm-based central processing units are known for energy conservation and thermal control, which lead to longer battery life and more compact designs, Morgan Stanley noted, adding that they “exhibit a notable edge in power efficiency.”

The bank therefore expects Arm-based AI PCs to “start a transformation that will affect the global semis industry.”

What stocks will benefit from Arm’s foray into AI PCs?

CNBC Pro subscribers can read more here.

— Weizhen Tan