They return sales on the financial markets, with Europe that seems destined to face a recession and the US once again pessimistic about the Fed, given the incisive action of the Central Bank of New Zealand, which launched the fifth consecutive increase in rates by 50 points. The higher-than-expected data on American private jobs also weighed on sentiment, pending the important report to be released on Friday. After three days of stellar earnings, thanks to profit taking, they close like this European lists are down (however far from the lows of the day) and Wall Street is moving downwards, while the flight from bonds is starting up again.
Yesterday Europe gained more than 300 billion in capitalization, while in the US the S&P 500 recorded the best two days since March 2020.
Today it seemed that even oil wanted to take a break, but the news that there'OPEC+ will cut production by two million barrels a day it quickly changed the sign of futures. Investors finally get back on dollaro, whose index appreciates today around 1,3%. L'EUR trades down to 0,98 cents.
Black jersey for Piazza Affari, the spread goes up
Piazza Affari is in black jersey and lost 1,52% rewinding the tape up to 21.360 points. Also weighing on Milanese stocks and government bonds is theMoody's warning: “We will downgrade Italy's ratings if we anticipate a significant weakening of the country's medium-term growth prospects, probably due to the failure to implement reforms to boost growth, including those outlined in the Pnrr”. If the rating agency really acted in this direction, it would bring Italian debt into the “non investment grade” (junk) area, which closes the purchases of Italian bonds by many institutional investors.
The news does not gladden the secondary tricolor, which closes in deep red: the spread between 10-year BTPs and Bunds with the same duration, it rises to 243 points. They grow i taxi: that of the Italian stock rises to 4,45%; that of the German share at +2,02%.
In the stock market, utilities are down, suffering competition from government bonds, but also cars and banks. The worst blue chips of the day are Ivy -5,08%%; Pirelli -4,08%; Telecom -4,03%; A2a -3,86%; Recordati -3,72%; Bpm bank -3,2%.
There are only five big caps making progress today, almost all of them in the oil sector: Saipem, +8,56%; Eni + 1,59% Tenaris +0,45%. This short list joins General Bank +1,62%, effervescent in view of a possible purchase by Mediobanca (-1,65%). Well stm + 1,47%.
Also in the rest of Europe, sales mainly affected cyclical sectors such as the automotive, telecommunications and banks, but the losses are slightly more contained than in Milan: Madrid -1,52%; Frankfurt -1,2%; Paris -0,9%; Amsterdam -0,77%; London -0,47%.
Eurozone services PMI falls; US employment rises more than expected together with wages
It was the data that said good morning to the markets in Europe disappointing eurozone services PMI, dropped in September to a 20-month low: 48,8 points from 49,8 in August. The composite index, ie the average between services and manufacturing, fell to 48,1 from 48,9, hitting a 19-month low. A picture that leads Chris Williamson, chief economist of S&P Global Market Intelligence to say that "any hope that the Eurozone avoids recession is further diminished by the ever more accentuated drop in entrepreneurial activity signaled by the PMI indices". Services activity weakens in Germany, Italy and Spain, while in France it shows weaker growth than the preliminary estimate, but faster than in August. In Britain, outside the European Union, businesses are seeing the steepest contraction in activity since early last year.
In Germany the index drops to 45 points, while in Italy it passes the 50 line that separates expansion and contraction and falls back to 48,8 from 50,5 in August. In the meantime, Istat improves the trend estimates of GDP of Italy in the third quarter, to +5% from +4,7%.
Turning to the US front, it is the good news that is frightening from a Fed point of view, ie in the perspective that the central bank proceeds with a decisive tightening to stop inflation. L'US private sector employment, based on payrolls, in fact increased in September much more than expected: 208 jobs were created last month compared to August, against estimates of 200. They grow strong too wages: +7,8% compared to September 2021.
The report steers investors away from T-bonds that see prices falling and rates rising.
Oil in cash with OPEC+ cuts
The Wall Street Journal is the first to write it: the Organization of the Petroleum Exporting Countries and its allies led by Russia meeting in Vienna agreed to cut production by two million barrels a day. The newspaper cites information gleaned from delegates. This is the largest production cut since the start of the pandemic and which goes against US requests. Following the news the Brent, which was slightly down, has started to move upwards and is currently up 1,9% to 93,54 dollars a barrel.
They seemed fluctuating i natural gas prices, which changed direction several times on the day when the president of the EU Commission, Ursula von der Leyen, opened a discussion on a ceiling for the price of the gas used to produce electricity. At mid-day the increase was 4,3% to 169 euros, MWh.
