Le stock exchanges of Europe are little moved in the hours preceding the publication of dozens of quarterly, from lvmh to several S&P 500 companies, on the agenda for today. The most awaited appointments concern Alphabet and Microsoft who will release the press release tonight after the market is closed.
Stock market latest news: Piazza Affari hits 15-year highs
While waiting Business Square it advances in small steps and travels just above parity. In line with Eurostoxx. The index, at 28.918 points, reached a new 15-year high of 28.950 points in the session. In Frankfurt he suffers Bayer (-2%) which revised downwards its forecast for the full year 2023 "primarily due to a further significant decline in sales of glyphosate-based products". Great performance by Adidas (+4%) after the presentation of the data for the quarter. The IFO indexes of July confirmed the stagnation of the German economy. The index on current estimates fell more than expected to 91,3 from 93,7 in June
In Milan it stands out Poste Italiane (+1,3%) which closed the second quarter with revenues and operating profit above expectations, the former amounted to 3 billion, the latter to 799 million euro. By mid-morning it's even better stm +1,7%, in line with the accounts of NXP Semiconductor a chip maker specializing in automotive components, presented data for the quarter that exceeded expectations.
Recordati -1,5% is the worst blue chip. It loses more than half a percentage point Italgas which closed the first half with an adjusted net profit attributable to the group of 213,2 million (+14,9%) and total revenues of 931,8 million (+31,7%), with a gross operating margin of 607 million (+18,3%) and operating profit of 358,8 million (+21,2%).
In the secondary, the yield of the BTP it's at 4,07%, up 5 basis points. Bunds at 2,45%.
Overseas, futures are up slightly in the US, while the Ten-Year Treasury Notes at 3,88%, unchanged from yesterday. Yesterday the US PMI indices showed signs of recovery in the manufacturing sector, against a slowdown in services, in this second sector, the price component started to rise again.
The awakening of the Chinese Dragon favors the recovery of emerging funds
Pending the decisions of the central banks, the focus of attention has jumped the China. The index CSi 300 achieved an increase of 2,60%, that of Shanghai by about +2%. Taiex of Taipei +2%. It shines Hong Kong +3%; the Hang Seng Tech index gains +4,7%, the CSI 300 Properties where the main names in the real estate industry are located, rises by +7%.
This is how the market reacted to the decisions of the Politburo lightning meeting dedicated to relaunching the Dragon economy, in serious difficulty starting with real estate, still nailed to Evergrande's suffering which has not been resolved after three years of agony prolonged by a mix of restrictive policies and weak sales during the pandemic era.
In the meantime, the Chinese Yuan it rose 0,4% against the dollar, recovering sharply from the 7,20 level touched earlier this week. Media reports have signaled that China's state-owned banks are once again selling dollars to prop up the yuan. Sentiment towards China improved after officials in the Politburo, the Communist Party's top decision-making body, promised new efforts to stabilize the yuan, after the currency tumbled more than -4% against the dollar this year.
Can we be trusted or will the Dragon crisis, aggravated by tensions with the West, prove to be too deep? For now, let's take note that the awakening of the Chinese markets has helped the MSCI Emerging Markets Index, lagging behind on the MSCI World since the beginning of the year due to the problems of the Dragon, the only large red square in the global economy.
Brazil and Korea run, but Greece is the hare
China, which has a whopping 30% weight in the EM indices, masked the better performance of the other EMs. Emerging market ex-China stocks are up 13% this year, versus China's decline of 3% on the back of Greece (+50% since the beginning of the year), the Czech Republic, Hungary and Mexico.
Still in the emerging area, Brazil it closed last night up almost 1% to reach the tops for two years. Thus the probability of seeing the absolute tops again increases. As is happening to the South Korea as attention grows Taiwan, Saudi Arabia and India, i.e. the countries which, together with Brazil and Korea, represent 70% of the Morgan Stanley EM index, an eclectic mix which, beyond the share dedicated to China (just under 30%), boasts a strong exposure to the technology sector (a third of the index), banks (a quarter) and commodities (15%).
There is enough for Ben Leidier, global strategist at eToro, to say that "EM stocks are a high-value contrarian option, thanks to a mix of factors: the weakening dollar, the improvement of the technology cycle and the strengthening of Chinese growth", conditions that could occur in the coming months.
