No doves and no olive branch addressed to the markets: central banks confirm their upward trajectory on rates and aggravate the tone. As Stock markets are plummeting, together with eurozone government bonds, especially BTPs.
The closing of the markets
Business Square closes today in the black jersey and archives the worst session for three months with a loss of 3,45%, which brings it back to 23.726 basis points, while the Italian chart sinks and the unenviable derby with Greece is revived, for the country perceived as the most risky. On the secondary it spread between ten-year BTPs and Bunds of the same duration, it soars to 207 basis points (+8,04%). They go up i returns, especially that of the Italian stock which returns to 4,15%, while the German benchmark is indicated at 2,08%. To complete the picture, Bank of Italy communicated that, in October, Italian public debt reached a new record, rising to 2.770 billion.
The session was also strongly negative for the other European lists, which all stop with large drops: Paris -3,09% Frankfurt -3,28% Amsterdam -3,18% Madrid -1,72%. Limit losses to 0,92% London.
Things are no better in New York, where Wall Street proceeds with massive losses.
The money market is volatileeuro-dollar, which has changed sign several times and is currently trading down around 1,064.
After three matching sessions the Petroleum: Brent -0,8%, $82,04 a barrel; Wti -1,54%, 76,09 dollars a barrel.
Lagarde: There is still a lot to do
To create all this havoc on the markets were the words of central bankers, Jerome Powell yesterday and Christine Lagarde today. The rate increase of 50 basis points by the ECB, after the same move decided yesterday by the Fed, was expected. The main rate in the euro area reaches 2,5%, its highest level for 14 years and the tones on future shares have not softened, on the contrary, because inflation estimates have worsened and the road to return to normal still appears long. “Further rate hikes will be needed to achieve our mandate” said the president at the end of the ECB's monetary policy meeting, which sees further hikes from 50 basis points. Furthermore, according to the updated estimates from Frankfurt, inflation will remain above the target also in 2025 when it should drop to 2,3%. And in the meantime the economy is slowing down: this and next quarter there will probably be a contraction, even if "the recession should be short and shallow".
The ECB will also launch quantitative tightening and begin to get rid of the bonds bought over the years (about 5 thousand billion euros), "starting from the beginning of March 2023".
Even the Bank of England , Swiss central bank which raised rates by 50 basis points.
Only Leonardo is saved on the FtseMib. Juventus did well +7,19%
The wave of sales that hit Milan today has only saved money Leonardo + 0,03%. Saipem, which floated for most of the session, closed down by 0,58% protected by the announcement, in the morning, of offshore contracts for 1,2 billion dollars.
The long list of discounts opens with Finecobank -6,35%. Asset management appears to be under pressure due to competition from government bond yields. Poste also lost 5,22%.
The day's balance sheet is heavy on utilities, starting at Ivy -5,02%. Heavy losses then for nexi -5,24% Amplifon -5,47% stm -4,95%, with the latter looking with concern at the trend of Nasdaq (-3%) in NY.
Bad banks from Understanding, -4,46%. Among the titles constantly in the spotlight Telecom it lost 2,38% on the day of the first meeting between government officials and the main shareholders of the telephone company, Vivendi and Cdp, to discuss restructuring plans.
To find some joy you have to get out of the main basket, where the Juventus stands out with an increase of 7,19%. The stock recorded progress for the third consecutive session, with the market appearing to believe in the takeover bid of the parent company Exor and the subsequent delisting of the Old Lady.
On this dreadful day, he starts off with a bang Saccheria Brothers Franceschetti +53,6%, on the price list dedicated to dynamic and competitive SMEs.
