The enthusiasm of the financial markets for one cools down in the evening Fed (perhaps) less aggressive in December and a (perhaps) less repressive China in the fight against Covid. European stock markets closed today's session with little movement, held back in the afternoon by the weak performance of Wall Street
Business Square rises by 0,31% (24.685 basis points), striking a balance between the rebound of Telecom (+3,69%) and the losses of banks and oil stocks. They are cautiously positive too Madrid + 0,55% Frankfurt 0,64% and Paris +0,23%. It shines Amsterdam, +1,026% (thanks to the presence of many tech stocks), while London it fell by 0,17%, also weighed down by the strengthening of the pound.
Italian paper rallies, spreads peak
Government bonds close a session in rally. In particular, the Italian paper is nourished by the possibility of more cautious central banks and yields go down. The spread between 10-year BTPs and Bunds with the same duration, it fell by 177 basis points (-10,54%), with rates respectively at +3,7% and +1,93%.
Wall Street in the red: fear of recession?
La New York Stock Exchange, after the gains on the eve and a cautious start today, is now moving down. The Nasdaq is colourless, more sensitive to rates, while government bond yields are falling, even if the curve between short-term and long-term bonds remains inverted, a trend that usually anticipates a recession.
On the one hand, therefore, one looks at the probability that the US and European central banks will moderate the pace of their increases in the cost of money, passing to 50 basis points at the next meeting, on the other, however, there is fear of excessive optimism on the markets and road the fear of an impending recession and this raises questions about the duration of this effervescent phase, after two months of gains.
Today, disappointing US macroeconomic data lends a hand to this vision. In particular the manufacturing ISM - an index that measures the performance of the manufacturing sector in the United States - fell in November to 49 points, ending up in contraction after 29 consecutive months of expansion (above 50 points). The construction sector recorded a decline in October, the fourth in the last five months, and worse than expected.
However, inflation slows down and seems to confirm the "progress" made so far, to use the words of Jerome Powell. The given Pce, highly valued by the Federal Reserve, was up 6% in October compared to a year earlier, down from +6,3% in September (revised from the initial +6,2%), with the “core” component of the figure, net of volatile elements, grew by 5%, in line with expectations, after +5,2% in September (revised from the initial +5,1%).
After yesterday's intervention by the president of the North American central bank, the markets are now pricing in terminal rates on Fed funds of 4,92% at the meeting in May next year. Prior to Powell's speech, markets were pricing in an interest rate spike to 5,05%, according to data from Refinitiv.
Will China Be the Next Fueler of Risk Appetite?
The propensity for risk could rekindle if China really, after the recent street protests, announces a change in its zero covid policy. Vice Premier Sun Chunlan said efforts against the virus are entering a "new phase” thanks to the weakening of the Omicron variant and the greater number of vaccinations, opening up the possibility of isolating patients at home starting from the infected in Beijing.
Dollar down; oil and gold up
A more dovish US central bank is ballasting the dollar, which dropped during the session to a three-month low against the major currencies. It is above all the yen and the pound that are strengthening, while the euro is struggling a bit more. In any case, the single currency trades in fractional progress, with the exchange rate around 1,048.
A weaker greenback favors buying on dollar-denominated commodities. They are so bullish gold and oil. The spot gold it earns about 2% and trades over $1800 an ounce.
Il Petroleum Brent type appreciates by 2,36% to 89,02 dollars a barrel; Texan crude rose 3,14% to 83,08 dollars a barrel.
Diasorin queen of Piazza Affari
From Cinderella to Queen: after the losses on the eve of Telecom, the crown of the blue chips is missing by a whisker. In any case, the stock recovers its speculative appeal which yesterday was tarnished by the fact that government officials had branded the hypothesis of a totalitarian takeover bid on the company as pure fantasy. “Many hypotheses remain under study£, observes Equita.
The best blue chip of the day is Diasorin, +3,78% and other health stocks are in the money such as Amplifon +2,98% and Recordati + 2,36%.
stm +2,32% is part of the good performance of the tech sector.
Good in the automotive Pirelli + 2,03% Cnh + 2,46 % Ferrari +1,98. Among the utilities are highlighted Enel +2,26% and Terna + 1,97 %
The sell-off hit financials and oil stocks the most.
Red is especially bright for Unicredit -3,64% Understanding -1,77% Bpm bank -2,41% Tenaris -2,33% Banca Mediolanum -2,21% Eni -1,63%.
