Markets have regained hope for a resolution to the war with Iran, catching some positive words from Washington and Tehran, even though both sides have stated they remain distant on the crucial issues of nuclear enrichment and control of the Strait of Hormuz. Asian stocks are rising after a session that ended positively on Wall Street, and European markets are also expected to open positively.
Uncertainties in the Middle East push oil prices higher again
While the US Secretary of State Marco Rubio He told reporters that there had been "some positive signs" in the talks with Iran. He also stated that a diplomatic agreement between the United States and Iran would be impossible if Tehran implemented a toll system in the Strait of Hormuz, a key oil transport conduit. A senior Iranian source told Reuters that no agreement had been reached with the United States, but that differences had narrowed, while Iran's uranium enrichment and Tehran's control of the strait remain among the sticking points.
Uncertainty pushed oil prices higher this morning after falling earlier. They remain well above pre-war levels, where they are expected to remain even if a solution is announced. Brent crude futures are up 2% at $104,71 a barrel, but are expected to decline 6% over the course of the week. U.S. West Texas Intermediate (WTI) futures rose 1,66% to $98,01.
Prolonged energy supply disruptions due to the ongoing war threaten to impact global prices, prompting market participants to anticipate tariff increases in both developed and emerging markets.
Markets are now discounting possible interest rate increases by the US Federal Reserve by the end of the year, against expectations of two rate cuts before the war.
Wall Street rose yesterday. Walmart reported consumers were affected by prices.
Yesterday, Wall Street's three major indices closed slightly higher after a volatile session that started poorly, with attention focused on every message from the Middle East. The Dow Jones closed up 0,55%, the S&P 500 up 0,17%, and the Nasdaq up 0,09%.
Walmart fell 7,3% after the world's largest retailer forecast second-quarter profit below estimates, keeping its annual targets unchanged but signaling that consumers are feeling the pressure of high fuel prices and have shifted their spending to basic, low-cost goods.
NvidiaNvidia, the world's most valuable company, fell 1,8% as some investors took profits following its optimistic second-quarter revenue forecast and $80 billion share buyback program. The stock has gained significantly since the beginning of the year, but its pace of growth has slowed as investors believe Nvidia will face tougher competition from chip rivals, including Intel and Advanced Micro Devices, in the future. However, the Philadelphia Semiconductor Index closed up 1,3%, as investors interpreted Nvidia's results as a positive sign for the sector. IBM rose 12,4% following the news that the administration Trump to fund quantum computing companies, including a new IBM initiative, in exchange for stakes in some of them. The underlying companies all moved higher. GlobalFoundries rose by 14,9%, while D-Wave Quantum rose by 33,4%, Rigetti Computing by 30,6%, and Infleqtion by 31,5%.
The software sector, on the other hand, is in difficulty, with Intuit which plunged 20% after the company lowered its annual revenue forecast for its tax filing software, TurboTax, and announced a 17% cut in its full-time workforce. H&R Block Inc. closed down 4,8%.
On the economic data front, jobless claims fell last week, reflecting the continued strength of the labor market, allowing the U.S. Federal Reserve to maintain its focus on inflation risks. U.S. manufacturing activity reached its highest level in four years in May, as companies stockpiled to hedge against potential shortages and price increases related to the war with Iran.
Asia rises. Nikkei gains 2,7% thanks to Softbank.
Asia-Pacific markets are trading higher. Japanese Nikkei 225 salt by 2,7%. Inflation Japan's core inflation slowed more than expected in April, hitting its lowest level since March 2022, dampening expectations of an imminent rate hike by the Bank of Japan. Core inflation—which excludes fresh food prices—came in at 1,4%, below the 1,7% forecast by economists polled by Reuters and also below the 1,8% recorded in March. Softbank Group Corp. surged more than 11% in Tokyo, following gains in U.S.-listed shares of its chipmaking unit Arm Holdings Plc.
Il Kospi South Korean shares rise 0,5%. Samsung Electronics fell 2,4% as unionized workers began voting on a preliminary wage agreement, narrowly averting a potentially damaging 18-day strike that would have affected tens of thousands of employees.
In China Hong Kong's Hang Seng Index rose 1,2%, while mainland China's CSI 300 rose 0,7%. Lenovo Group Ltd. hit a 26-year high in Hong Kong after reporting strong growth in artificial intelligence-related earnings. The Nifty 50 Indian The S&P/ASX 200 gained 0,4%. Australian salt of 0,3%.
Il dollar remains little changed against a basket of currencies, at 99,247. It yen Japanese yen is quoted at 159,11 per US dollar.euro stands at $1,1614, near yesterday's six-week low, and is on track to decline 1% this month.
European stocks opened higher. At the Milan Stock Exchange, Stellantis and Amplifon were all eyes on the stock.
Futures forecast a higher opening for European stock markets. The Euro Stoxx 50 Index is up 0,9%.
Amplifon – Placed up to 45,3 million new shares through accelerated bookbuilding (ABB) issued as a capital increase and intended for qualified investors. The proceeds, equal to approximately 20% of the pre-capital increase share capital, will be used to finance the acquisition of the Hearing business from GN Store Nord.
Eni – Signed three long-term agreements for the purchase of liquefied natural gas in Indonesia.
Prysmian – HSBC raised its target price to €170 from €115. Buy confirmed.
Stellantis The automotive group has presented a new €60 billion industrial plan. It plans to launch 60 new models by 2030, strengthen partnerships, and overhaul its extensive brand portfolio. Mediobanca raised its target price to €7,10, from €6,10 previously, with a Neutral rating confirmed.
Telecom Italy – The conversion of the savings shares has been completed, meaning they are no longer listed on the stock exchange.
Drums Investment Partners Alpitour's IPO is on hold due to uncertainty in the tourism sector, while TIP has committed up to €30 million to Amplifon's capital increase. Bending Spoons' potential US IPO remains a significant strategic option, with press reports indicating valuations well above TIP's current NAV.
Webuild – Neom announced that it has completed the high-speed rail project in Tabuk, Saudi Arabia. Webuild's remaining project backlog amounts to approximately €1 billion (2% of the group's total). Neom will reimburse all costs incurred up to the termination date of May 27.
