A more hawkish than expected Powell sends the markets into a tailspin: "monetary policy will be restrictive to bring inflation under control - he says - and this could translate into slower economic growth, a weaker labor market and "a little suffering for families and businesses". The long-awaited speech by the Fed chairman Jerome Powell, at the Jackson Hole symposium, therefore scares the world stock exchanges which increase losses after his words. European stock markets thus close in deep red, closing the second week in reverse and even Wall Street, after some heeling, is now moving with conviction below parity.
Europe in decline and gas on the shields
In Europe Business Square it is the worst, -2,49%, and the psychological threshold of 22 points is at stake, slipping to 21.895. Frankfurt loses 2,27%, Amsterdam -1,83% Paris -1,68% Madrid -1,53% London -0,7%.
The fears of a recession, which have never really subsided, are making themselves felt again in the financial markets, especially in the Old Continent and on the other hand if US households and businesses have to suffer, who knows what will happen to the European ones with the gas flying higher and higher. Today the price has reached 339 euros per megawatt hour, one step away from the record of 345 euros set on March 7th. Colorless oil.
British regulators have already announced that the country's energy bills will rise by 80% from October and the cost of energy also pushed German consumer confidence to a low for the third consecutive month in August. On the contrary, the confidence of French consumers unexpectedly increased and the confidence of Italian consumers also rose, however remaining at the low levels seen in June, while, again in August, for the second consecutive month, the confidence of Italian businesses fell.
Spreads up with Powell and the ECB
Following Powell and a Reuters report that the ECB may discuss a 75-basis rate hike at its September meeting, rain selling also hit in the afternoon. the bondholder in the euro area, with yields reaching two-month highs in Italy, France and Germany. In closing, however, the yield of the BTP, which had reached 3,75, decreased by +3,68% (from 3,55% yesterday) and that of the Bund with the same duration to +1,38% (from +1,33, 230%), for a spread of 3,07 points (+XNUMX% compared to the day before).
They also continue to rise i Italian bond rates at auction. Today the Treasury assigned six-monthly BoTs, maturing on February 28, 2023, for 6 billion, equal to the entire amount offered, against a request for over 8,7 billion. The yield was up 18 basis points to 0,810 percent.
Inflation drops in July in the US, but for Powell one swallow doesn't make spring
Stars and stripes inflation unexpectedly fell in July, but for the president of the US central bank "the improvement of a single month is far less than what we will have to see before we are convinced that inflation is falling".
In any case, the personal consumption spending price index, normally held in high regard by the Federal Reserve, fell by 0,1% in July (+1% expected) to 6,3% on an annual basis, from 6,8, 0,1% in June. The "core" component of the figure, excluding volatile elements, grew by 0,2% compared to June (against estimates of +4,6%) and by 4,7% compared to a year earlier (against expectations for a +4,8%) after +XNUMX% in June.
For Powell, deciding how much to hike rates at upcoming meetings "will depend on the totality of incoming data and the evolving outlook," in light of further employment and inflation reports to come.
“We will vigorously use all the tools available against inflation”, even if “at some point” the US Central Bank may slow down.
This leaves us with uncertainty about the extent and pace of future interventions.
In light of all this, the euro, after having managed to recover something beyond parity, has slowed down and is currently moving in the 0,999 area against the greenback.
In Piazza Affari only Telecom and Atlantia are saved
The blue chips of Piazza Affari are almost all in the red, with the exception of Telecom +0,24% and Atlantia +0,22%. The telecommunications company, after so much suffering, seems to be benefiting from the share purchases of CEO Pietro Labriola, who has placed another 500 shares in his portfolio. This move is seen by analysts as a sign of confidence.
The count of losses on the price list starts from Amplifon -6,02%, followed by nexi -5,4% Iveco -4,92% Moncler -4,92% Finecobank -4,85%.
Banks, the traditional barometer of the Milan stock exchange, are in decline led by Bper -3,24%.
Letter also for the utilities, observe special these days for the energy crisis and the ongoing political debate on how to counter the race in gas prices and the impact on the economy. “Following the new gas peaks on the markets, the pressure rises for new government interventions in favor of the economy and companies in difficulty”, underlines Equita, listing the hypotheses of interventions in the sector. Among the most exposed companies according to the broker, there are Enel -2,29% and A2a -3,9%.
