Federal Reserve Chair Jerome Powell on Friday warned further interest rate increases could be necessary in the fight against inflation.

In prepared remarks for his keynote address at the Kansas City Fed’s annual retreat in Jackson Hole, Wyoming, Powell said, “Although inflation has moved down from its peak — a welcome development — it remains too high.”

“We are prepared to raise rates further if appropriate,” Powell said, before adding that the U.S. cental bank intends “to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

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— Sam Meredith

Shares for the Watches of Switzerland Group plunged by more than a quarter on Friday morning, heading for the company’s worst day ever, after luxury watchmaker Rolex announced a deal to buy watch retailer Bucherer.

By early afternoon trade in Europe, the London-listed group’s share price had recovered slightly but was still down more than 20% on the day.

In a statement, Watches of Switzerland insisted that the acquisition was solely about succession planning for Rolex — which is breaking with its modus operandi of acting solely as a manufacturer — and did not represent a “strategic move” into the retail market.

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– Elliot Smith

German business sentiment darkened further in August, according to the Ifo Institute’s business climate index, with readings across manufacturing, services, trade and construction all declining.

The overall index slipped to 85.7 points in August from 87.4 points in July, a fourth consecutive fall.

“Assessments of the current situation fell to their lowest level since August 2020. Moreover, companies are increasingly pessimistic about the months ahead. The German economy is not out of the woods yet,” said Ifo Institue President Clemens Fuest.

– Elliot Smith

European markets made a muted start to Friday’s trade.

The pan-European Stoxx 600 hovered around the flatline in early trade, with tech stocks shedding 0.4% while oil and gas shares added 0.6%.

Britain’s FTSE 100 is set to open around 6 points higher at 7,340, while Germany’s DAX is seen around 31 points lower at 15,590 and France’s CAC 40 is slated to slip by around 14 points to 7,200, according to IG data.

The German economy stagnated in the second quarter, the federal statistics office said on Friday, confirming preliminary estimates published late last month.

The German GDP posted zero growth for the three months to the end of June, compared to the previous quarter, when Europe’s largest economy suffered a winter recession.

– Elliot Smith

Analysts at Goldman Sachs named five stocks to play themes including artificial intelligence, electric vehicles and energy-efficiency, placing two on the conviction list.

The picks are buy-rated names “whose exposure to enduring themes complements a compelling equity story,” according to a research note published Aug. 21.

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— Lucy Handley

Hannah Gooch-Peters of Sanlam Investments UK tells CNBC Pro Talks about a company that has an “amazing, diversified business” which helps earnings growth be consistent.

It’s a stock with consistent earnings growth, recurring revenue and high barriers to entry, according to the global equity investment analyst.

The stock is up nearly 12% this year, and analysts covering it give it potential further upside of about 16%, according to FactSet.

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— Weizhen Tan