The U.S. economy is performing stronger than expected, and the final reading of second-quarter GDP has been revised to 3,8% from the estimated and expected 3,3%. This raises new questions about the trajectory of U.S. interest rates, placing even more weight on the PCE inflation data, due out tomorrow, and prompting investors to exercise caution. European stock markets close weak Wall Street is moving along the same path today in the American morning.
Milan limits the damage at 0,43%, considering Cucinelli's collapse (-17,28%), hit by sell-offs following accusations from some hedge funds regarding its activities in Russia, to which the maison responded in a detailed statement, explaining that it complied with all European regulations. Frankfurt fell 0,59%, London -0,4%, Paris -0,41%, Amsterdam -0,11%, and Madrid -0,44%.
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Among the sectors they close a session industrial and defense in trouble, even if the international climate shows no signs of improving and German Chancellor Merz, in a letter to the FT, opens up to the use of frozen Russian funds to finance Ukraine's war effort, arguing that such a move could unlock a €140 billion loan for Kiev and demonstrate "the strength to stay in the game".
Piazza Affari: focus on Cucinelli
Piazza Affari falls back to 42.242 basis points and is affected by the heavy fall of Brunello Cucinelli, a stock overwhelmed by the "short" position of Morpheus Research, which says it made its choice on the basis of a study that would demonstrate the violation of sanctions against Russia by the king of cashmereStores reportedly continued to sell Cucinelli's prized products in Moscow during these years of war with Ukraine. The company denies the claim and threatens legal action, but this isn't enough (at least today) to stem the haemorrhage for a stock that, after being suspended due to excessive declines, has returned to trading and been hit with even more sales.
To compensate for the declines, the increases in the main index stand out Saipem +3,09%Banco Bpm +1,82%, Telecom +1,51%. The oil service rebounded also thanks to UBS, which initiated coverage on the stock with a 'buy' rating and a target of 3 euros. The good performance comes on the day of the extraordinary meeting that approved the merger plan for incorporation with the Norwegian Subsea 7, a transaction that, however, is at risk of being halted following requests from rivals Petrobras, Exxon Mobil, and Technip FMC to the Brazilian antitrust authority (CADE) to intervene to block it or impose remedies to preserve competition in Brazil. According to one trader, the market appears to appreciate the possibility of the Italian company remaining alone, should obstacles arise to the merger between the two groups.
In a banking sector that is still in conflict, it is Banco Bpm once again in the spotlight, which has attracted market attention following the successful outcome of MPS's takeover bid (-1,59%) for Mediobanca (-1,56%). The game of risk could restart in Piazza Meda, with the stock also benefiting from Goldman Sachs's positive coverage (buy) and a target price of €15,7. Intesa (+0,41%) and Unicredit (+0,19%) are also slightly positive. Both institutions received rating upgrades from Fitch today, following the improvement of Italian sovereign debt last Friday, which rose to A- with a stable outlook. Outside the main basket, MFE stocks are falling (A -1,8% and B -1,32%) after first-half results were in line with expectations.
Spreads up
The secondary market remains in the red, where the spread between the Italian 10-year and the German one rises to 86 basis points (+2,18%) in a context of slightly increasing rates, at 3,64% and 2,78% respectively.
Wall Street is nervous
Overseas Wall Street appears nervous in these hours, while still the risk of shutdown looms Government talks in Washington, where budget negotiations have so far failed to reach an agreement. The DJ is down 0,25%, the S&P 500 is down 0,54%, and the Nasdaq is down 0,5%.
Investors are once again questioning the future of artificial intelligence stocks—which have driven much of the rally on Wall Street and the global tech sector—and are cautious following the US macroeconomic data. The labor market is also showing signs of strength, with weekly jobless claims falling by 14.000 to 218.000, versus estimates of 235.000. These numbers paint a picture of a robust economy, which on the one hand reassures investors and on the other offers support to the Fed's hawkish stance, further fueling expectations for tomorrow's PCE inflation data.
In the stock the focus remains on the tech giantsIntel rose 5,8% after reports of an investment approach from Apple, as part of a move to strengthen the company now partially owned by the U.S. government. Nvidia was little moved, while Oracle fell 2,3%.
Rising dollar
The dollar strengthened on the foreign exchange market today, and the euro fell back below the 1,17 threshold. Meanwhile, U.S. Treasury yields rose, reflecting positive economic data and expectations about the Fed's next moves. Among raw materials, the gold appears to be slightly moved, while November oil futures are currently down around 1%. Texas crude is trading at $64,33 a barrel; Brent crude is trading at $68,71.
