The bubble in artificial intelligence stocks is a bit scary, but it hasn't burst yet. In a session marked by some quarterly results from sector giants such as Palantir (-3,49% on the Nasdaq) and by thewarning from the CEOs of Goldman Sachs and Morgan Stanley On the risk of a 10% correction in the stock market over the next two years, European stock markets closed weak and Wall Street opened lower, but the red faded during the American morning.
Piazza Affari even moved into positive territory, closing with a slight gain of 0,09% at 43.262 points. The Milan stock exchange was influenced by the accounts of the US giants, as well as those of national champions like Ferrari, which rose by 3,24%. Well, in the wake of the quarterly report, Lottomatica +3,27%, while blue chips more closely tied to the tech world, such as STM -2,2% and Prysmian -2,27, are acting as drags. At the end of the day, Frankfurt -0,61%, Paris -0,52%, Amsterdam -0,18%, and Madrid -0,06% are also above today's lows. London is up 0,15%.
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Profit taking on Wall Street
Wall Street is currently retreating, mainly due to profit-taking after last week's record highs. The DJ is down 0,32%, the S&P 500 is down 0,71%, and the Nasdaq is down 1,19%. The CBOE Volatility Index, an indicator of the level of fear on Wall Street, is near a two-week high, even taking into account the ongoing shutdown of the US administration (Tomorrow will become the longest in history), leaving investors in the dark about important macroeconomic data. Expectations are thus focusing on the ADP report on private sector payrolls due tomorrow.
Concerns in the stock market began last night, after Palantir, a company specializing in big data analysis and heavily invested in artificial intelligence, announced earnings that beat expectations but failed to provide convincing guidance on the near future. This wasn't enough to satisfy market appetite, as the stock has surged 173% this year alone.
Investors' high bet on AI will be under scrutiny again in the coming hours and days with other significant earnings reports, such as that of Advanced Micro Devices (tonight) and Qualcomm (this week). Among the stocks that are falling sharply is Tesla. (-3,15%), after Norway's sovereign wealth fund, the world's largest, said it would vote against ratifying CEO Elon Musk's proposed compensation package, containing shares worth up to $1 trillion, at its annual general meeting this week.
Dollar still at three-month high
On the foreign exchange market The dollar is still trading near three-month highs against major currencies, despite the market's somewhat tentative macroeconomic performance. The euro-dollar exchange rate is currently trading below 1,15.
Strengthening the greenback is the fact that expectations for a further Fed rate cut in December have cooled slightly. According to the CME, Fed funds futures now price in a 65% probability of a third cut, down from 94% a week ago, before the US central bank president appeared more hawkish than expected. In the Fed, the governors' positions are not uniform and T-Bonds are also taking advantage of the situation and strengthening, while waiting, among other things, for the US Supreme Court to rule tomorrow on the legality of the tariffs imposed by President Donald Trump.
Sterling moves near six-month lows against the dollar, following British Finance Minister Rachel Reeves' unusual pre-budget speech, which called for tighter fiscal policy and higher taxes, raising the likelihood of interest rate cuts by the Bank of England, which meets this week. Money markets are currently pricing in a less than 40% probability of a quarter-point reduction, but until the end of October, traders hadn't expected any move from the BoE until at least spring. Commodities: they are trading gold and oil in the redSpot gold below $4000 an ounce, Brent below $65 a barrel.
Piazza Affari, boom for Industrie De Nora
In Milan today it is not only the blue chips that show off with their quarterly reports, but even smaller stocks like Industrie De Nora, which posted a 17,23% increase, after posting 5% growth in revenues for the first nine months (to €631,3 million) and confirming its 2025 guidance. Among the blue chips, Ferrari stands out – which exceeded expectations with its results and confirmed estimates – and Lottomatica following the third quarter data that saw an 18% increase in adjusted EBITDA to €195 million, with growth in the online market at an all-time high.
The utilities are confirmed to be well-tuned Enel rose 1,62% and Snam 1,38%. Campari rebounded 1,19%, after a slide the day before due to the seizure of group shares worth €1,3 billion held by its parent company Lagfin for alleged tax evasion. Banks closed the session without much momentum. Intesa Sanpaolo was the best performer, up 0,49%, while Unicredit lagged slightly behind, down 0,03%.
MPS is timidly positive (+0,25%). According to press reports the ECB would have authorized Francesco Gaetano Caltagirone to rise to 20% in Siena's capital. Bper is the worst performer, declining 0,86%. According to Unipol Chairman Carlo Cimbri (+0,13%), Modena's shareholders must begin working on their recent acquisitions and there should be no new moves in the pipeline following the acquisition of Popolare di Sondrio (-0,07%). It should be noted that Unipol is Bper's largest shareholder. Among the biggest decliners today were Stelantis (-2,41%), Leonardo (-2,04%), and Buzzi (-2,01%).
Spread slightly increasing
The secondary market is also turning red today, with the spread between the 10-year BTP and the Bund of the same duration widening to 75 basis points from yesterday's 74. Yields are relatively stable at 3,4% and 2,65%.
