It is the federal reserve day, but also the downgrade of Italy's outlook by the S&P rating agency, the decline in consumer confidence throughout Europe, including Italy, and the cuts in Russian gas supplies. Yet, Piazza Affari decides not to care and to celebrate the positive quarterly published today by Unicredit, filing the session as the best stock exchange in Europe. The ending says +1,52% to 21.480 basis points.
S&P downgrade drives up spread
The American rating agency Standard & Poor's has communicated a downward revision of the outlook on our country. Based on the new political and economic conditions, S&P no longer classifies the outlook for Italy as “positive”, but as “stable”. The reason is obvious: according to the agency la fall of the Draghi government it could “shift focus away from key reforms and weigh further on confidence and growth at a time of high uncertainty and rising inflation”.
But while the stock seems not to have given too much weight to the news, the secondary market reacts badly, with the spread between Btp and Bund which soars to 249 basis points (+3,5%), a sharp rise from the 235 basis points of the previous day. Also on the rise XNUMX-year bond yield Italians which at the end of the day stood at 3,54% from 3,35% yesterday.
Consumer confidence in crisis
According to data published today by Istat, consumer confidence in Italy fell from 98,3 to 94,8 in July, the lowest level since May 2020, while business confidence fell from 113,4 to 110,8 . All components of the Consumer Confidence Index are declining with the economic and future climate falling, respectively, from 93,9 to 84,9 and from 98,8 to 92,9. For businesses, confidence is worsening in manufacturing and market services while it is improving in construction and retail trade.
The deterioration does not only concern Italy, indeed if you look at the results recorded across the border it seems that the climate also involves the other European countries. In France, the indicator that summarizes household confidence lost two points, falling to 80, while in Germany, German consumer confidence fell to all-time lows: -30,6 points from -27,7 in the previous month. The result is worse than analysts' expectations which indicated -29,5.
Russia cuts supplies again and gas prices soar
As announced on Monday, Gazprom has reduced flows through Nord Stream at 20% of maximum capacity. Quotes in Amsterdam in the morning hit a new intraday record of 225 euros per megawatt hour, with an increase of 12% compared to Tuesday's session, to then continue to 206 euros per megawatt hour, up by 3,3%. To understand the extent of the increases, just think that over the last month in Amsterdam prices have risen by 64,5%, while compared to July 2021 the increase is 435%.
Slightly up too oil prices, with Brent maturing in September at 105,06 dollars a barrel (+0,63%) and WTI at 96,55 dollars a barrel (+1,64%). It stays instead the euro stable: the exchange rate with the dollar is at 1,0116 points.
Stock exchanges resist and close positively
Despite the not exactly positive news that arrived during the day, the European stock markets closed the session in positive territory. The best, as mentioned, is Piazza Affari, followed by Madrid (+ 0,76%), Paris (+ 0,84%) and Frankfurt (+0,57% with Deutsche Bank down 1,65% e Mercedes Benz up 3,5% after the quarterly). Outside the EU too London it moved up (+0,6%).
At Piazza Affari Unicredit and Nexi show
In Milan, the scepter of "best title" goes to Nexi, which in the wake of the Worldline rally in Paris (+13,7%), marks +8,9% at the end of the session. It follows closely Unicredit, which ends the day with an increase of 8,64%. The bank led by Andrea Orcel has seen profit rises 74% and raised its guidance for the whole of 2022. But above all, it reassured the market that exposure to Russia "is under control".
The accounts also push Saipem (+5%) which in the first six months of the year managed to reduce losses to 130 million euros from the loss of 779 million recorded in the first half of 2021.
Also among the best titles of the day Iveco (+ 5,12%) and stm (+3,4%). The worst performance is instead that Pirelli (-2,61%), followed by Diasorin (-2,21%) And Inwit (-1,06%).
Outside the Ftse Mib, it disappoints instead Fincantieri (-7%) which in the first half recorded revenues up by 16% to 3,51 billion, but a negative net result of 234 million, also due to a strategic review of the contracts in the infrastructure sector.
Wall Street up before the Fed: Nasdaq in orbit
Wall Street continues to rise sharply, awaiting the decisions of the Federal Reserve that tonight, at 20 pm Italian time, should announce an increase in interest rates of 75 basis points to try to contain inflation, which has reached its highest level in 40 years. Fears that this decision could push the economy into recession continue to grow, as evidenced by the inversion of the curve between 10-year and 2-year Treasury rates.
Investors are also watching earnings results this week, the busiest of the earnings season. More than 150 S&P 500 companies so far have reported second-quarter earnings on schedule and about 70% beat analyst expectations, according to data from FactSet. The accounts of will also arrive in the evening Facebook (+ 2,5%).
Among the major indices, the Dow Jones rose by 0,34%, the S&P 500 by 1,3%, The Nasdaq as much as 2,4%. To tow is ecosystem (+4,6%) which has provided encouraging sales forecasts and is engaging in a lobbying action in Congress to convince the government to distribute its contracts on the cloud, for now an almost exclusive monopoly of Amazon (+3,8%). Alphabet, the parent company of Google, reported higher-than-expected advertising revenue yesterday and its shares are up 3,3%.
