Recession looms, but the central banks could take their foot off the accelerator and this gives bond investors breathing space and comforts the Stock Exchanges which close higher in Europe and open positive in New York, leaving behind the thud of Hong Kong and Chinese markets. Furthermore, the gas price (November contract) returns below 100 euros and Great Britain has its next prime minister: is Rishi Sunak, former chancellor of the exchequer and opposed to Liz Truss' tax plan. In Italy, however, today is the first session after the oath of the government of Giorgia Meloni.
The first test on the financial markets for the new executive seems to have passed, but Kepler Cheuvreux underlines that “the priority will be the Budget Law for 2023, where the room for maneuver for new expenses is limited. We expect a disciplined financial approach, particularly after the bad experience with the UK government."
Rising Europe led by Milan and Madrid
Business Square at the end of the session it is the leader in Europe with an increase of 1,93%, which brings it back within a step of 22 thousand points. I'm in the wake Madrid + 1,86% Paris +1,59% and Frankfurt +1,6%. It's more backward Amsterdam, 0,17%. London it appreciated by 0,66%, with sterling stable after a brief flare-up on domestic political news.
The week promises to be full of events for the markets, with many meetings of central banks, from Canada to Japan. The most awaited is that of ECB which, on Thursday, will decide on a new rate hike, estimated by observers at 75 basis points, to combat inflation that is about five times the target level.
This as the Eurozone is slipping into recession in light of the Manufacturing and services SMEs down more than expected in October, starting with Germany, the industrial engine of the block. The index created with the opinions of purchasing managers of large companies in the service sector fell to 48,2 from 48,8 points, that of manufacturing to 46,6 from 48,4. The composite index, estimated at around 47,6 is instead at 47,1. Above 50 the economy is expanding, below that line it is contracting.
Furthermore, there are many quarterly reports that will tell about the state of health of continental companies at the end of the third quarter and in view of the following months. Today the test of accounts was Philips (-1,54%), which predicts the loss of about four thousand jobs and further problems in the supply chain that will continue to weigh on sales in 2022. The session is one to forget for the Dutch technology investor prosus, -17,31%, on the back of weakness in Hong Kong's tech giants after Chinese President Xi Jinping's newly unveiled leadership team raised fears that economic growth is being sacrificed for ideology-driven policies.
The winds of the dragon also bring down luxury, but in Paris the title Essilor Luxottica (+4,93%) is among the best, thanks to the positive ratings of analysts in the wake of the quarterly turnover announced on Friday.
Gas below 100 euros, for Tabarelli (Nomisma) bills will also drop
“Today's real news is that the price of gas has dropped below the 100 euro threshold and therefore bills will stop increasing, indeed a reduction is expected in the coming months”. Word of the president of Nomisma Energia, Davide Tabarelli.
And indeed today the gas drop, at its four-month low in the November future, offered some optimism, despite the fact that the December future is still over 130 euros and the news from Russia and the Ukraine does not bode much hope for the war. Other sectors are in fibrillation, such as those that use Moscow's aluminum, so much so that five European industrial associations have urged the EU authorities to prevent sanctions, tariffs or boycotts against the Russian product which, they say, could lead from the market thousands of companies.
Returning to gas, Italy will still make use of the skills of the former minister for ecological transition Roberto Cingolani, who will continue to work as a consultant to the Meloni government.
The session appears calm for the Petroleum, with Brent moving slightly above parity around 93,64 dollars a barrel.
On the currency market the euro, after a weak morning, is slightly up against the dollar at around 0,987.
Piazza Affari in dust with Pirelli and utilities
The Ftse Mib of Piazza Affari sees Pirelli at the top of the list with an increase of 5,18%, on which Equita has lowered the target price to 5,7 euros per share (-7%), however confirming the opinion on the share at " Buy”. The sector did well across Europe, with Michelin leading the Cac40 (+5,63%) ahead of the quarterly. In Milan it also shines Brembo (+4,97%). In the car well stellantis + 3,06 %
Among the blue chips continues the positive phase of Interpump, +3,73%, go up Recordati +3,44% and Campari +3,19%. The utilities are highlighted: Italgas + 3,45% Ivy + 3,3% Terna +3,04%. The latter benefits from the purchase recommendation of UBS and an agreement in the USA with Boundless Energy.
The banks did well: Unicredit +0,54%, is preparing to present the accounts in two days.
Ps -2,01%, a further decrease compared to the 2 euro of the capital increase, while the rights sink (-76,21%) on the penultimate day of negotiability.
Few blue chips in red: Cnh -1,42%; Amplifon -1,22%; Leonardo -0,28%.
Among the minor titles Webuild (+2,92%) benefited from the news of the consortium awarding of a railway contract worth a total of 490 million in Romania.
Spreads down
The Italian card closes in green: the spread falls back to 225 basis points (-3,95%) and rates fall. The benchmark 10-year BTP closed at +4,59% and the Bund at +2,34%. What gives government bonds courage is the hope that the Fed will slow its run against inflation, after the next meeting (in which it is estimated to proceed with the fourth hike of 75 basis points), as reported by the WSJ on Friday last. At the moment, US government bond yields are stable and the 4,2-year bond is around XNUMX%.
