The exit from the tunnel is still far away. After yesterday's strong rebound on Wall Street, the stock markets are starting to open lower this morning. At least this is what emerges from the weak performance of Asian stock markets and the uncertainty of futures. Expectations weigh heavily on the Fed's next moves, as well as on the ECB's anti-spread plan, the complicated squaring of the circle between hawks and doves. But, on closer inspection, the unknowns are deeper.
Gold business for China and India with the crude oil embargo
Starting from the energy dossier, which, as the tug of war with Russia continues, presents many inconsistencies. The New York Times assign this morning the Currency of the Month Oscar at the ruble, supported byincrease in crude oil sales of Moscow (+1,7 billion dollars in May). To buy Russian oil, banned by sanctions, are the Asian countries: China increased purchases by 28% from Russia, which has bypassed Saudi Arabia. Even more significant the balance of India: from zero to 760 thousand barrels per dayat a much lower price than the list price. Sure, Moscow pays a huge price in terms of GDP (-15%), but the cost is high for everyone.
Opening down 1% for Eurostoxx and Wall Street
European stocks are expected to open about 1% lower, Wall Street futures are down more than 1%.
Also in red the oil: WTI loses 3,7% to $106 a barrel, a price not seen for five weeks.
To follow their, down 0,5%, to $1.825. The EU intends to extend the embargo to metal arriving from Moscow. But Bloomberg reports that Russia sold bullion to Switzerland yesterday. Of course with the discount.
Hong Kong down, Beijing increases spending
Thus the short-lived rally of the markets in Asia ended. In the final session, the Nikkei's Tokyo it is flat. The Hang Seng of Hong Kong loses 1,3%, the CSI 300 of the lists of Shanghai e Shenzen 0,4%. After three positive sessions, the Hang Seng Tech lose more than 2%.
Beijing seems intent on acting as an engine of growth. During the meeting of the standing committee of the National People's Congress held yesterday evening in Beijing, the will to increase spending on infrastructure through the issuance of special loans issued by local governments.
Prague is also raising rates. Eve of choices for the ECB
The east wind is unlikely to blow in old Europe for now. This morning, indeed, there Central Bank of the Czech Republic, last in order of time, will join the general rate hike with an increase of at least 0,75 points. The eyes of the markets remain focused on the control room of the ECB, where the technicians of the institute are filing the details of the anti-spread plan so that it can pass the exams of the German Constitutional Court.
The spread stops at 192, Milan +0,39%
In the meantime, the spread it remains at 192 points, despite the rise in yields on both BTPs and Bunds.
Business Square it appreciates by 0,39% and consolidates over 22 thousand basis points. The banks are confirmed to be well bought.
But the big deal did Leonardo (+3,51%), which in one fell swoop restores the American subsidiary Drs and establishes, thanks to a merger, an axis with the Israeli Rada, at the forefront of radars, a small jewel listed on both Tel Aviv and the Nasdaq .
Empty armchair in Generali
A high-voltage day is looming at home Generali. The nomination committee meeting for the replacement of Francesco Caltagirone as vice presidentclosed yesterday without a deal. Strictly by statute, the position will be offered to Claudio Costamagna, who will refuse it, as will Luigi Cirinnà. Other names will have to find the approval, far from obvious, of the minority directors.
Savona's anti-inflation proposal
On the occasion of his annual meeting with the financial market, the president of Consob, Paolo Savona, launched the proposal of a "inflation shield to protect savings".
Barkin (Fed): the rise must be rapid but short-lived
However, the long weekend was good for the US markets, yesterday in a robust rally awaiting Jerome Powell's hearing today. Richmond Fed Chairman Thomas Barkin has warned that the US central bank must raise rates as fast as possible, looking at the same time to cause the least possible damage to the economy and the financial system. A similar warning is likely to come today from Jerome Powell, in a hearing in Congress.
Revenge of Exxon, Tesla flies
All 11 sectors of the index rose yesterday S&P (+2,4%). They also go up the Dow Jones (+ 2,1%) and the Nasdaq (+ 2,5%).
Continue the rematch of Exxon (+6,2% to 91,48 dollars). The oil giant, excluded last year from the main index, was accused by President Biden "of having earned more money than God. Start investing and paying taxes".
The market comeback coincided with a surge in T-bond sales: The 3,304-year yield recovered to XNUMX%.
Double-digit bounce also for Tesla. Elon Musk also had his say on the recession: the billionaire considers it "probable" in the short term, as central banks around the world rush to withdraw monetary stimulus. The slowdown could result in a 10% reduction in the number of Tesla employees.
Goldman Sachs sees recession at 30%. For Summers it is avoidable
Recession is already replacing inflation in the ranking of the most feared dangers. The pessimists are in the majority: Viraj Patel, one of the most followed strategists, talks about bouncing the dead cat adding that "the worst is yet to come". For Goldman Sachs, the risk of recession is now 30% (double the previous survey).
President Biden, however, lets it be known that Lawrence summers, the economist who predicted (unheeded) that the post-Covid strong bolsters policy would trigger inflation, told him that “a recession is far from inevitable”. Everything will depend on the Fed's ability to maneuver rates in a tense situation, especially on the wages front.
