While in the US Trump's constant attacks on the US continue to worry investors,independence of the Fed, in the Old Continent is the France to worry with his new Government crisis: the answer can be read in the movements of the bond markets which have pushed yields up, further worsening the already difficult financial conditions of governments. Tonight will be Nvidia will dictate the stock market's path when it publishes its quarterly results this evening, seen as a key to understanding the entire Artificial Intelligence sector. Asian stock markets are rising, led by tech. The cases of Nikon e MonAmi. European stocks are seen opening slightly higher.
Political déjà vu in France is pushing up government bond yields, worsening the country's financial situation.
In France, Prime Minister Francois Bayrou's bid to secure support for his unpopular debt reduction plan has caused the French blue-chip CAC40 index to fall more than 3% since the start of the week, along with banking stocks, which have suffered the heaviest losses so far. Yesterday, the gap between French and German 10-year government bond yields, a measure of the premium investors are asking for to hold French debt, widened to around 79 basis points, the highest level since April.
A déjà vu for France, which found itself in a similar situation when it lost its last prime minister, Michel Barnier, to a vote of no confidence over the budget at the end of 2024, after only three months in office, following another snap election in July of the same year.
Eyes on this morning at 10am French Council of MinistersThe members of the executive branch are meeting after Prime Minister François Bayrou announced that on September 8th he will take his government's responsibility for France's debt and the budget target to be set for 2026 before the National Assembly, calling for a vote of confidence. In order for François Bayrou to seek the Assembly's confidence, he emphasizes: BFMTV A resolution from the Council of Ministers is required. Government spokesperson Sophie Primas will hold her traditional press conference at the end of the morning, following the Council meeting.
France could thus find itself facing another early election, the French Justice Minister speculated on Tuesday, after opposition parties declared they would vote to oust Prime Minister François Bayrou. Justice Minister Gérald Darmanin said on France 2 program that, although the government is still working to find a compromise agreement, "it cannot rule out" the possibility of another costly dissolution of parliament. Emmanuel Macron, the only person who can dissolve parliament and call new legislative elections, has not yet commented on Bayrou's move, although Bayrou's entourage said on Monday that Macron had approved the plan. Bloquons movement tout called a Day of civil disobedience for September 10th, with strikes and symbolic actions against the budget. The climate is reminiscent of the yellow vest protests, and the government fears an escalation.
Wall Street closed higher ahead of Nvidia's results tonight. But bond prices are worrying.
Even in the USA the bond market is observed especially with the risk that the return 5-year Treasury bonds are attempting to break the XNUMX% threshold. Markets are nervous after Trump ordered the firing of the Federal Reserve chair on Monday, Lisa Cook , an unprecedented move that could lead to a legal battle. Cook has vowed to challenge his firing in a case that will likely end in Supreme CourtFor months, Trump has also been trying to “fire” Fed Chairman Jerome Powell because he is not obeying his orders to lower rates, which would facilitate his wasteful policies.
Although Treasury Secretary Scott Besent has repeatedly said that the administration's cost-cutting and growth policies would ultimately drive down the 10-year yield – which he cited as a key metric of success – that hasn't happened yet. While short-term yields have fallen in anticipation of a round of Fed cuts (as Powell speculated last weekend), the 4,31-year rose as high as 4,26% yesterday, before settling around XNUMX%, roughly where it was when Trump was elected in November. 30-year yield rose to 4,94%.
The main event today will undoubtedly be the quarterly report of Nvidia (released after the close of US trading), which will set the tone for near-term risk appetite and determine whether the skyrocketing valuation for the darlings of artificial intelligence is justified. Caught in the crossfire of the ongoing trade war between Washington and Beijing, the fate of Nvidia's operations in China depends on where the world's two largest economies will confront each other over tariffs and restrictions on chip trade. That's where investors' attention will focus.
Overall, the $4,4 trillion AI chipmaker is expected to post a 53% increase in revenue in the second quarter, reaching $46 billion, according to LSEG data. But that may not be enough to satisfy investors, as this leap is still far from the triple-digit growth seen in many recent quarters. Therein lies the challenge for a stock that has risen 35% this year and influences the broader stock market with every move. Options traders are pricing in a roughly $260 billion swing in the company's market capitalization after the results.
Yesterday on Wall Street it was really Nvidia, but also Eli Lilly, supporting the S&P 500 index and leading it to a higher close. Nvidia rose 1,1%, the pharmaceutical company gaining nearly 6% after the drugmaker said its experimental pill reduces body weight by 10,5% in diabetic patients.S&P 500 Index is traded at around 23 times expected earnings, the highest in the last four years, increasing the risk of a sell-off if Nvidia's results were to dent Wall Street's enthusiasm for stocks tied to theartificial intelligenceThe S&P 500 index rose 0,41%, closing the session at 6.465,94 points, just below the all-time high set on August 14. The Nasdaq gained 0,44% to 21.544,27 points, while the Dow Jones The Industrial Average rose 0,30% to 45.418,07 points.
Asia buoyed by tech. Eyes on Nikon and MonAmi.
The upward closing of Wall Street is bringing up almost all the stock markets in Asia Pacific: on the day of the publication of the Nvidia data, they are i-tech to leave a mark on the seat.
The MSCI Asia Pacific index rose 0,1% on the back of a boost from equities. ChinaThe CSI 300 index of the Shanghai and Shenzhen stock exchanges is up 0,7%, hitting a three-year high. It has gained 25% since the outbreak of the trade war in April. The Hang Seng index of the Hong Kong stock exchange is at par. Chinese chip and AI stocks are rising, as Beijing steps up efforts to stimulate the adoption of this new technology, through a greater financial and fiscal support. The title of Cambricon, a Chinese company specializing in artificial intelligence chips, gains 6% and sets a record: since the beginning of the year, the price has more than doubled. China will promote the development of intelligent vehicles and robots, as well as phones and computers with artificial intelligence, according to the State Council's guidelines on promoting the use of AI. The decline of profits of Chinese industrial companies In July, the pace slowed, a sign, according to analysts, that the government's measures to stem overcapacity are starting to work. Industrial profits fell 1,5% last month compared to a year earlier, according to data released this morning by the Office for National Statistics. Bloomberg Economics had forecast a 5,8% decline.
The bag of Tokyo is slightly up, Nikkei +0,3%. The shares Nikon rose 21% after yesterday's news that Franco-Italian company EssilorLuxottica, maker of Ray-Ban glasses, is exploring a potential deal to increase its stake in the Japanese optical equipment maker to about 20% from 9%.
In South Korea the stock exchange Alone It's about parity. The actions MonAmi rises by 24%, while in two days, the increase of the manufacturer of pens, ballpoint and fountain pens, is 60% approximatelyOne of his pens caught the eye of Donald Trump during his first personal meeting with South Korean President Lee Jae Myung on Monday at the White House.
The doubling of the duties on goods coming from theIndiaTrump's tariff, which was set at up to 50%, went into effect as scheduled today, increasing tensions between the two countries. A punitive 25% tariff imposed because of India's purchases of Russian oil adds to Trump's previous 25% tariffs on many Indian products. This brings the total tariffs to 50% on goods such as clothing, precious stones and jewelry, footwear, sporting goods, furniture, and chemicals, among the highest imposed by the United States and comparable to those imposed by Brazil and China.
European stocks seen slightly higher
In Milan, the FTSE MIB index accelerated its decline, dropping 11% to 0,88 shortly before 42.280:2026 a.m. The banking sector is once again under pressure, both due to contagion from tensions in France and the government's proposed request for financial assistance from banks to provide additional liquidity to public finances in anticipation of possible tax cuts in XNUMX.
MPS (-3,40%), Intesa Sanpaolo (-2,68%), Unicredit (-0,71%), Banco BPM (-2,60%), Mediobanca (-2,33%), and BPER (-3,22%). Stm shares remained stable at 23,35 euros, while anticipation grew for Nvidia's results, which will be released tonight after Wall Street closes. Oil stocks rose, with Tenaris up 0,38% and Saipem up 0,16%.
In France, the Paris Stock Exchange is attempting a recovery (CAC40 +0,19%) while the government remains in limbo due to the budget law. The Dax 40 -0,51% in Frankfurt, with consumer confidence in Germany falling in September (to -23,6 points) and the Ifo employment barometer falling in August.
The yield on 10-year French OATs fell from yesterday's highs to 3,485%, and that on 10-year BTPs to 3,57%. However, both benchmarks saw their spreads with the corresponding German bond widen slightly, to 79 and 87 basis points, respectively.
GermanyGerman consumer sentiment is headed for a third consecutive decline in September, weighed down by growing household fears about potential job losses and inflation uncertainty. The consumer confidence index fell to -23,6 points from -21,7 points in August, a slightly revised downward reading, according to a survey by the market research institute. GfkAnalysts polled by Reuters had expected a reading of -22,0.
banksThe Italian government intends to negotiate with banks the terms of a contribution to provide additional liquidity to public finances in anticipation of possible tax cuts in 2026. According to rumors, the plan is to spread the use of deferred taxes over a longer period. The majority parties do not seem to agree on this issue.
Monte Paschi Bank will decide in the next few days, perhaps next week, on a possible improvement in the terms of the takeover bid for Mediobanca.
Saipem has completed the conversion of the semi-submersible drilling unit Scarabeo 5 into a floating plant for hydrocarbon separation and gas compression (Floating Production Unit) for Eni in Congo
Stellantis Stellantis has shelved its first Level 3 autonomous driving program due to high costs, technological complexity, and uncertainty about real market interest, three people familiar with the matter told Reuters. This year, it paid $190,6 million in penalties for failing to meet U.S. fuel economy requirements. According to a government report, Stellantis has paid a total of $773,5 million since 2018. The company confirmed the figures to Reuters.
UnicreditCitigroup resumes coverage with a 'buy' rating and a target price of 74 euros.
DiasorinJP Morgan initiates coverage with an Underweight rating, with a target price of €75,40.
(Last update at 10,50 on 27 August)
