German inflation above expectations and weak opening on Wall Street dampen the good mood of European stock exchanges which had been on the rise all morning, celebrating the recovery of the Chinese economy and the signs of improvement coming from manufacturing production in the Eurozone .
Closure in red for European stock exchanges
In the afternoon, however, the euphoria gave way to fear and the continental price lists slowed down, closing the session subduedly. It just saves London (+0,44%), while Paris, Frankfurt and Amsterdam lose half a percentage point. TO Business Square purchases of luxury goods and cars were not enough and the day ended with a loss of 0,59% to 27.315 points. The worst is Madrid, which marks -0,8%.
Also sells on Wall Street
After the red recorded in February, the month of March opens in the spirit of sales, with the three main indices of American stock exchange they travel in decline after the data on the ISM manufacturing, which in February rose to 47,7 points against expectations for 47,6 points. However, the sector remained in contraction. The Dow Jones is just below parity, the S&P 500 is 0,5% and the Nasdaq even 0,74%.
On the hi-tech price list we note the thud of novavax. The stock of the biotech company sells 25% of its value after having expressed doubts about its ability to "continue to operate as a going concern for one year from the date of issue of these financial statements”.
Meanwhile the spotlight is still on fed. “We need to determine when inflation is irrevocably coming down. We're not there yet, which is why I think we need to raise the federal funds rate to between 5 and 5,25% and leave it there until well into 2024,” Atlanta Federal Reserve Chairman Raphael Bostic said. in an essay published on the institution's website.
Today's macro data: eyes on German inflation
To influence the performance of the markets is the shower of macro data released today. The first ones arrived in the night from Asia: the Chinese manufacture in February a leap to 52,6 (from 50,1 in January), the most robust increase in 11 years thanks to the restart of production after the lifting of the anti-Covid restrictions. In the morning it was the turn ofEurozone, where in February the index manufacturing PMI it dropped to 48,5 - a two-month low - from 48,8 in January. With the exception of Spain, Greece and Italy, which rises to 52 from 50,4 points, the sector remains in negative territory, but a positive signal comes from production at its nine-month high. “A marginal expansion in output reported by Eurozone producers in February is good news as it represents the first increase since last May and a further improvement in the underlying trend from the low seen in October,” said Chris Williamson, chief business economist. of S&P Global Market Intelligence.
OnItaly, i have also been released today Istat data on deficit and GDP 2022: the former soared to 8% due to the new Eurostat accounting criteria that update the weight of tax credits, Superbonus in primis; the second reports growth of +3,7%, slightly down on the +3,9% expected in September.
The most awaited data of the day, however, arrives in the early afternoon from Germany: in February consumer prices increased by 0,8% on the month and by 8,7% on the year. The estimates spoke of a monthly increase of 0,6%, annual of 8,5%. At the harmonized European level, the index rose by +1% on the month and by 9,3% on the year.
Extends the euro, Villeroy: "peak rates in the summer". Visco: "We need balance"
The reaction of theeuro, which touches 1,07 dollars and then settles at 1,066 against the greenback from 1,0619 the previous evening. In fact, German inflation could provide the ECB with further motivation to continue with monetary tightening.
In partial confirmation come the words of the governor of the French central bank, Francois Villeroy de Galhau, who, speaking before the finance commission of the French parliament, said: "It seems to me desirable to reach this terminal rate by the summer, ie by September at the latest". “The first February data published yesterday for Spain and France – he continued – invite us to be vigilant and to persevere in our monetary action. According to our forecasts, inflation should peak in the first half of the year and could halve by the end of the year”. However, the core inflation rate continues to rise and “consequently, no one can deny anymore that monetary policy can and must react”.
The president of the Bundesbank is of the same opinion, Joachim Nagel, according to which “One thing is certain: the rate hike announced for March will not be the last. Naturally we reevaluate the situation at each meeting – added Nagel – We are not stuck in a certain path. However, as things stand today, I believe key interest rates need to be even higher to bring the inflation rate back to our 2% target in a timely manner."
In the afternoon, the Governor of the Bank of Italy also expressed his opinion on the issue, Ignazio Visco, in a speech at the Frankfurt school of Finance & Management. "There is no doubt", said the number one on Via Nazionale, that the tightening of monetary policy in the euro area "must continue to ensure that a temporary increase in inflation caused by a supply shock does not become a phenomenon more persistent supported by demand factors”. But at the same time, “it will remain essential to continue to balance the risk of too little recalibration, which could cause inflation to become entrenched in expectations and wage-setting processes, with that of excessive tightening (doing too much), which would have significant repercussions for economic activity, financial stability and, ultimately, price developments in the medium term”.
Visco recalled that at the beginning of February the Council of the ECB assessed that the risks for the inflation outlook have become more balanced, reiterating that uncertainty remains very high.
Meantime Goldman Sachs has updated its forecast and now expects an interest rate hike of 50 basis points in May (up from 25 basis points previously) by the European Central Bank. Additionally, analysts raised the peak rat to 3,75% in June (up from 3,5% previously).
Yield on 3-year BTP rises, Bund above XNUMX% for the first time
In this context, the spread closed at 184 basis points, just above the previous day's level. However, the yield continues to rise ten-year BTP, which increases to 4,56% from the previous 4,46%. It rears the German Bund at 2 years, whose yield rises above 2008% for the first time since 3. Yields also rose US Treasuries, with the 4-year bond rising above XNUMX% for the first time since last November.
Taking a look at the other markets, the Petroleum it is down, with Brent at 83,02 dollars a barrel (-0,5%) and Wti at 76,7 dollars (-0,45%). The price of gas remains substantially stable above 47 euros per megawatt hour.
Piazza Affari: the best and worst stocks
Returning to stocks, luxury is highlighted in Piazza Affari, driven by the recovery of the Chinese economy. On the Ftse Mib Moncler is the pink jersey (+3,29%) after closing 2022 with revenues and profitability on the rise and better than the consensus. Management has proposed the distribution of a dividend of €1,12 per share. In the purchasing sector also on Salvatore Ferragamo (+ 2,28%) and Brunello Cucinelli (+ 0,75%).
Runs the car, with stellantis which scores +3%. Earn 1,43% Pirelli after the announcement by Brembo and Mtp/Camfin of the signing of a consultation agreement on the vote in the meeting with which the nucleus of Italian shareholders of the Bicocca group, controlled by the Chinese Sinochem, is consolidated.
Positive Saipem (+1,15%) which announced a new order in the Ivory Coast and sale of assets for 750 million. Instead, it is below parity (-0,99%) Amplifon which in 2022 saw net profit rise by 13,1% and revenues exceed 2 billion for the first time.
Worst title of the day is Diasorin (-2,76%). Utilities Sales: Ivy (-2,54%), A2a (-2,65%), Italgas (-2,5%), Enel (-2,2%), Terna (-2,3%). Down too Recordati (-2,5%).
Benefits taken up Unicredit (-2,46%) after the increases of the last few days.
