Euro zone GDP, Fed meeting in focus

U.S. stocks opened slightly higher on Tuesday as traders ended a strong month for stocks.

The Dow Jones Industrial Average was flat in early trade, while the S&P 500 was 0.1% higher. The Nasdaq also rose 0.2%.

—Karen Gilchrist

The euro zone grew by 0.1% in the last quarter of 2022, according to Eurostat’s preliminary data released on Tuesday.

Energy prices cooled in the second part of the year, bringing some relief to the broader economic performance of the Eurozone.

The latest data comes after the eurozone reported a 0.3% rise in GDP in the third quarter.

Germany surprised with a decrease at the level of breakdown by country. Europe’s biggest economy shrank by 0.2% in the final quarter of 2022, with analysts now expecting Berlin to head into recession.

— Silvia Amaro

UK food price inflation hit a record 16.7% in the four weeks to January 22, up 2.3% from the previous month, market research firm Kantar said on Tuesday.

The figure, the highest since data began tracking in 2008, represents a further deepening of the country’s cost-of-living crisis, which has seen shoppers trade in branded foods for private label brands and discount retailers.

“We thought inflation was coming down; the fact that it’s gone up again is not great news,” Fraser McKevitt, head of retail and consumer affairs at Kantar, told CNBC. Grocers “in particular increased their own-label range, with sales of these lines growing steadily over the past nine months.”

Own-brand lines grew by 9.3% over the period, while discounter Aldi became the fastest-growing grocer for the fourth month in a row, just ahead of Lidl.

—Karen Gilchrist

Data released on Tuesday showed economic growth in France slowed to 0.1% in the fourth quarter from 0.2%, while retail sales in Germany unexpectedly fell in December.

Joost van Leenders, senior portfolio manager at Kempen Capital Management, told CNBC that these and other indicators mean the picture to 2023 is “not that strong” and the possibility of a recession in Europe and the US is “still firmly on the agenda”.

— Jenni Reid

UniCredit was the top performer in early trading, rising 7.5% after the bank promised to distribute 5.25 billion euros ($5.69 billion) to shareholders after beating earnings.

German arms maker Rheinmetall fell 6% despite announcing yesterday that it had won a contract for the US military. General Motorsdeliver up to 40,000 trucks worth up to $14 billion.

— Jenni Reid

Europe’s Stoxx 600 index opened 0.2% lower, extending Monday’s slide, as investors prepared to chew on a quick estimate of eurozone GDP.

Figures released early Tuesday from France, the bloc’s second-largest economy, showed growth slowed to 0.1% in the fourth quarter of 2022 from 0.2%. However, it exceeded expectations.

Most sectors were in the red in early trading, led by financial services, down 0.8%.

But banks gained 0.6% after UniCredit and UBS beat profit expectations.

This week, the central bank’s decision to raise rates on Wednesday in the US and on Thursday in Great Britain and the Eurozone also dominate the markets.

— Jenni Reid

UniCredit pledged to return 5.25 billion euros ($5.69 billion) to investors on Tuesday after posting its best profit in more than a decade.

The bank said net profit came in at 2.46 billion euros in the three months to December, more than double the average forecast of 1.10 billion euros ($1.2 billion) from analysts polled by the bank.

UniCredit said it expects to post a net profit in 2023 broadly in line with 2022, including its Russian business, after dropping it from its profit target last year following Russia’s invasion of Ukraine.

It failed to break out of Russia, where it owns 15 of the largest lenders.

UBS’s fourth-quarter profit beat market expectations, but the Swiss banking giant reported a drop in revenue due to weaker client activity and warned of an “uncertain” year ahead.

The bank reported a net profit of $1.7 billion in the fourth quarter of last year, pushing its full-year profit to $7.6 billion in 2022.

Looking ahead, the Swiss lender said earnings for the first quarter of 2023 will be “positively impacted” by higher client activity and interest rates, as well as the easing of COVID-19 restrictions in Asia.

But he was cautious about the broader economic outlook, citing central bank activity as a potential catalyst for market volatility.

UBS said it will buy more of its own shares this year.

Read the full story here.

— Silvia Amaro

European markets are headed for a lower open Tuesday as investors focus on the next US Federal Reserve meeting starting today. The two-day meeting will conclude on Wednesday with the announcement of the central bank’s latest decision on interest rates.

United Kingdom FTSE 100 The index is expected to open 26 points lower at 7,758, German DAX Down 79 points at 15,052, France CAC down 40 points to 7,049 and Italy FTSE MIB down 125 points to 26,260, according to IG data.

Revenue comes from Pets at Home, UBS and Spotify, and the release includes fourth-quarter eurozone gross domestic product figures. Preliminary data on inflation in Germany and France for January should also be released.

— Holly Ellyatt

Microsoft issued a disappointing sales forecast last week, but its stock has since risen. What does this mean for other big tech companies set to report earnings?

Technology fund manager Jeremy Gleeson, who manages the £1.1 billion ($1.5 billion) AXA Framlington Global Technology Fund, said there was enough bad news in Microsoft’s earnings to “scare” investors into selling the stock .

However, the fact that shares subsequently rose more than 2% is an “encouraging” sign for the rest of Big Tech’s gains, Gleeson told CNBC’s “Squawk Box Europe.”

This week, he shared his thoughts on what to expect from Apple and Alphabet.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Just last week, the electric vehicle maker’s shares jumped more than 30% after the earnings announcement. So far this year, Tesla shares are up about 44%.

It follows a dismal 2022, when Tesla shares fell more than 35% in December and about 65% for the year.

After all this volatility, Wall Street analysts see the stock moving forward:

CNBC Pro subscribers can read more here.

— Weizhen Tan

A rally in Chinese stocks gained momentum on Monday as China’s benchmark index edged into bull market territory.

Bernstein analysts believe the rally is still ahead and are revealing their best stocks to ride it out.

Subscribers can read more here.

— Zavier Ong