European Economics News Preview: UK Inflation Data Due

Consumer and producer prices from the UK and industrial production from the euro area are the top economic news due on Wednesday.

At 2.00 am ET, the Office for National Statistics publishes UK consumer and factory gate prices for November. Annual inflation is seen easing to 10.9 percent from a 41-year high of 11.1 percent in October. This is well above the central bank’s 2 percent target.

UK factory gate prices are forecast to climb 14.6 percent annually after rising 14.8 percent in October.

Statistics Sweden is also slated to release consumer prices data at 2.00 ET. Consumer prices are set to climb 11.5 percent annually in November, faster than the 10.9 percent rise in October.

Half an hour later, Swiss producer price figures are due for November. Prices had increased 4.9 percent annually in October.

At 3.00 am ET, Spain’s INE is scheduled to issue final consumer and harmonized prices for November. The flash estimate showed that consumer price inflation slowed to 6.8 percent from 7.3 percent in October. The INE is likely to confirm the flash estimate published on November 29.

At 4.30 am ET, the Office for National Statistics releases UK house price data.

At 5.00 am ET, euro area industrial production data is due from Eurostat. Economists forecast production to fall 1.5 percent on a monthly basis in October, reversing a 0.9 percent rise in September.

Bank Of Canada Raises Interest Rates By Another 50 Basis Points

The Bank of Canada on Wednesday announced its widely expected decision to raise interest rates by another half a percentage point, saying inflation remains “too high.”

The Canadian central bank increased its target for the overnight rate by 50 basis points to 4.25 percent, marking the seventh consecutive rate hike.

However, comments in the accompanying statement seemed to suggest the Bank of Canada is nearing the end of its tightening cycle.

“Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target,” the Bank of Canada.

The Bank of Canada’s decision to continue raising interest rates comes as inflation remains well above the bank’s 2 percent target, although it noted the three-month rates of change in core inflation have come down.

“Inflation is still too high and short-term inflation expectations remain elevated,” the bank said. “The longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.”

The Bank of Canada said it is also continuing its policy of quantitative tightening, which it said is complementing increases in the policy rate.

“We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians,” the bank concluded.

NET Power To Go Public Through Merger With Rice Acquisition

Clean energy technology company NET Power, LLC announced Wednesday an agreement to go public through a business combination with special purpose acquisition company Rice Acquisition Corp. II (RONI).

The merger will create a pro forma enterprise value of $1.459 billion.

The transaction is expected to close in the second quarter of 2023. The proposed combined company NET Power Inc. will be listed on the NYSE under the ticker symbol “NPWR”.

The merger deal is expected to boost deployment of NET Power’s proprietary technology that delivers clean, reliable, and low-cost power from natural gas.

Upon closing of the transaction, Ron DeGregorio, current CEO of NET Power, will be succeeded by Danny Rice, current director of RAC II and former CEO of Rice Energy, Inc.

The merger is expected to provide NET Power with around $535 million of cash net of transaction fees.

In addition, NET Power has the total committed investment of $235 million.

Net proceeds of $200 million secured through the committed investments are expected to fully fund corporate operations through commercialization of SN1 with expected commissioning in 2026.

Net proceeds above $200 million are anticipated to advance and support commercialization, including funding of SN1.

Bloom Energy Rally Continues

Bloom Energy Corp. (BE) shares are gaining more than 8 percent, continuing an uptrend since December 9. There were no corporate announcements today to influence the stock movement and the market is broadly up.

Currently, shares are at $23.89, up 8.79 percent from the previous close of $21.96 on a volume of 2,544,900.

Plug Power Rally Continues, Stock Gains 7%

Shares of Plug Power Inc. (PLUG) are continuing its rally from past few days, and has gained nearly 7% on Wednesday morning.

PLUG is currently trading at $15.08, up $0.97 or 6.87%, on the Nasdaq. The stock opened its trading at $14.76 after closing Tuesday’s trading at $14.11. The stock has traded between $12.70 and $32.80 in the past 52-week period.

Plug Power delivers end-to-end clean hydrogen and zero-emissions fuel cell solutions for supply chain and logistics applications, on-road electric vehicles, stationary power market, and others in North America and internationally.

Delta Air Lines Shares Climb On Outlook

Delta Air Lines, Inc. (DAL) shares are gaining more than 3 percent on Wednesday morning trade after raising the December quarter outlook and introducing 2023 guidance.

The company now expects fourth-quarter adjusted earnings in a range of $1.35 to $1.40 per share, while the earlier outlook was $1.00-$1.25 per share.

For the full year 2022, earnings per share are expected to be $2.12 to $2.17, and adjusted earnings of $3.07 to $3.12

For 2023, the company expects 15 to 20 percent revenue growth in 2022 and earnings in a range of $5-$6 per share, doubling from the prior year. For 2024, the company expects earnings of $7 per share.

The outlook for 2023 is based on a full restoration of its network and continued improvements in premium and loyalty revenue.

Currently, shares are at $34.61, up 3.68 percent from the previous close of $33.38 on a volume of 10,846,380.