Under a flurry of interest rate hikes by central banks (from the Fed, to the BoE, to Switzerland) today the European stock markets close the session down, compounding losses in the afternoon after Wall Street's weak start.
The war in Ukraine negatively affects the mood, while Europe is preparing to introduce new sanctions against Russia. Consumer confidence then drops to a "record low" ever recorded, according to data from the European Commission: -3,8 points in the euro area, -3,5 points in the EU. At -28,8 points in the euro area and -29,9 points in the EU.
THEeuro-dollar it's under 99 cents. Oil is partially recovering, with Brent above $90. Gas in the area 180 euros MWh.
European stocks in the red; Switzerland closes the era of zero interest rates on the continent
Business Square after resisting the sell-off during the morning thanks to bank purchases (Unicredit +5,32%), yielding up to 1,07%, retreating to 21.799 basis points. The day's balance is more serious than the Stock Exchange Paris -1,87% Frankfurt -1,86% Amsterdam -1,85% Madrid -1,27%.
Outside the eurozone London loses 1,16% e Zurich marks -1,26%. Today also there Switzerland it aligned itself with the general trend and launched a maxi increase of 75 basis points, which put an end to the era of zero interest rates in Europe.
It bounces Moscow, despite the stampede of many Russians after Putin's speech yesterday.
Central banks in a straight leg
What attracted interest yesterday and today were the central banks, which have not scrupled to intervene with outstretched leg to curb inflation. Yesterday the Fed he decided on the fifth increase in the cost of money, the third in a row by 75 basis points and above all he made it clear that he will not stop. The forecast is now that rates will reach 4,4% (median value) at the end of 2022, while in June the projection was 3,4%. All this despite the expectation of a sharp decline in the growth of the stars and stripes economy.
Today, other central institutes have moved, including: the Swiss bank; the Norwegian bank, which raised rates by 50 basis points; the English bank which raised the cost of borrowing for the seventh time, with a half point adjustment to 2,25%, the highest in 14 years. The hawks' club has called itself out again the bank of Japan, which has maintained its ultra-accommodative policy. However, the Japanese authorities intervened yesterday to support the yen, which is in free fall against the dollar.
On the issue of interest rates, there is determination in Europe Isabel Schnabel, of the Executive Committee of the ECB, which reiterated the need for a restrictive policy with the intention of stopping inflation despite the economic stagnation of the bloc. A new increase is expected in October, but it is not yet possible to say how much. "Currently - the banker told the German newspaper T-online - we do not assume a recession, but rather a stagnant economy". However, the situation in Germany “is unfortunately worse”, due to “the strong dependence on Russian gas. A recession is potentially inevitable."
Government bonds: the inversion of the curve is widening in the USA. The spread in Italy is stable
The Fed's choices weigh on the T Bonds, that see prices falling and yields rising. The inversion of the US yield curve between two-year bonds (at its highest since 2007) and 10-year bonds worsens, an event that could precede a recession.
On the other hand, the Italian secondary closed in green, with rates slightly increasing: lo spread between 10-year BTPs and Bunds with the same duration, it falls by 219 basis points (-2,42%), while the yields are respectively at +4,17% (from 4,13% yesterday) and +1,98% (from 1,89 .XNUMX%).
Unicredit superstar at Piazza Affari
There are only eight blue chip companies in progress today, mostly banks. Unicredit it is the queen, in a sector, that is well tuned thanks to the prospect of greater earnings after the turnaround of the central banks. The stock, suspended in volatility in the morning, soared after the words of the managing director, Andrea Orcel, who anticipated a increase in estimates for 2023 the presentation of the third quarter accounts. The bank, Orcel said, should achieve "all targets even in the event of a mild recession" and, if there were to be a severe recession, it would still be ready "to face any shock and outperform the average of its competitors".
Asset management securities are also appreciated together with the banks. Overall they go up Finecobank + 4,78% Bper + 3,34% Bpm bank + 1,99% Understanding + 0,84% Banca Mediolanum +0,75%. The oil sector rears its head with Saipem, +3,21%, after recent losses.
Consolidate earnings Leonardo +0,07%, with the war in Europe getting worse.
Selling has been massive on health stocks like Diasorin -6,55% and Recordati -4,75%.
Back off Stm, -5,99%, in the wake of yesterday's and today's Nasdaq losses. Luxury is bad, alarmed by a possible economic contraction: Moncler -5,91%.
