Economies are suffering, long live the economy. The signs of a recession are multiplying, starting with the sharp drop in copper, the most sensitive indicator of manufacturing trends. Recessionary winds are also pushing bond yields down. Paradoxically, these signs of crisis end up helping the stock markets while Eni postpones the listing of Plenitude but supports the increase in Saipem. De Nora's hypotheses and the Atlantia takeover bid are advancing.
In summary, before the opening of the European Stock Exchanges:
- For the first time in June, the MSCI global index is starting to close the week with a plus sign.
- The EuroStoxx 50 index future is up 0,8%. Wall Street futures are also up.
- Stock markets in Asia Pacific are on positive ground under the boost of high tech. Hang Seng High Tech earns 3%. The CSI 300 of the Shanghai and Shenzen lists increased by 0,4% (+1,4% for the week). Tokyo Nikkei +1% (+1,8%). Kospi of Seoul +2% (-3,3% during the week).
Ipo, only De Nora advances, the family remains in the majority
- Eni has decided to freeze the listing of Plenitude, the company branch specializing in renewable energy. The postponement of the IPO, scheduled for July, was decided due to the market situation.
- In particular, Eni, together with CDP, will have to support the increase of Saipem. Yesterday for the second day in a row the worst title in Milan (330 million burned in two sessions). Consob yesterday gave the go-ahead for the publication of the prospectus relating to the 2 billion euro capital increase starting next Monday
- On the other hand, the IPO of De Nora, the company owned by Snam that produces alkaline electrodes to make green hydrogen, is proceeding according to plan. On Wednesday it received the go-ahead from Consob to make the offer between 22 and 27 June. De Nora, valued at between 2,72 and 3,28 billion, is sold only to "institutional" investors and over a third of the shares are optioned by the Garrone (Erg) and Wertheimer (7-industries) families. The majority stake will remain in the hands of the De Nora family.
- Atlantia. The government has decided not to exercise golden power over the takeover bid by the Benettons and the Blackstone fund over the infrastructure group. This was communicated by the vehicle Schema Alfa.
Europe in recession: manufacturing and services fall
The recovery, however timid, does not hide an uncomfortable reality: Europe is already in recession. The first data on economic activity in the euro area in June (the composite PMI index went from 54.8 to 51,9) confirm an increasingly depressed picture. The growth of business activity in the eurozone has slowed well beyond forecasts as consumers, worried about rising bills, have chosen to postpone purchases. “It is a rude awakening – comments Giuseppe Sersale of Anthilia – for those who believed that the European cycle could bear the war in Ukraine and its repercussions on prices and the concomitant tightening of monetary policy by the ECB with reduced damage”.
Sharp drop in yields of Btp and Bund
- Thursday's data, on the other hand, suggest a rather difficult second half for the Eurozone economy. With drops of more than 20% from the maximum, the German Dax, the French Cac 40 and the Italian Ftse Mib have already entered a "bear" phase.
- The worst price list is the German one -1,72%: Germany has activated phase 2 of the "alarm" of the three-phase emergency plan in the face of the high risk of shortage of gas supplies.
- Closure in the red for Piazza Affari -0,89%. Mario Draghi has obtained that a forthcoming European Council is dedicated to the proposal of a gas price cap. But the opposition of Holland remains, home to the market which in recent months has guaranteed brokers large profits.
- The prospect of recession is weighing on bond yields: the BTP drops to 3,36% (from 3,53%), the German Bund to 1,43% (+1,62%).
- Back to climb it spread at 196 points: disagreements emerged from the European council over the anti-fragmentation parachute which the ECB should in any case announce in these days, barring new tensions.
- The ECB Bulletin confirms that, after the next rate increase of a quarter of a point in July, there will be a second one in September; except “one increment higher” if necessary.
Usa: Powell confirms forthcoming hikes, inflation expectations down
In his second testimony to Congress, the Fed chairman reiterated the rising rate line as an anti-inflation function: since March the central bank has already made three hikes, the last one of 0,75%. Another increase of the same importance, the president added, is likely at the end of July meeting. Powell does not rule out the risk of a sharp slowdown in the economy "but we cannot afford mistakes in this matter," he added. For now, moreover, the labor market is not slowing down: requests for layoffs were 229, at a minimum.
- The squeeze is already discounted by the market. The US indices close in progress. The Nasdaq is running +1,62% ahead of the S&P +0,95% and the Dow Jones +0,64% again over 3 thousand points.
- The yield on the T bond falls again to 3,068 (from 3,155%) after seeing 3% during the session. The two-year bond, at a yield of 3,02%, was 3,45% on Tuesday: for the two-year, it is the steepest drop in yield since March 2020.
Inflation expectations fell more than nominal rates, which pushed down real rates, which fell on ten-year maturities to 0,55% from 0,60% the day before. - In the aftermath FedEx presented its first quarter fiscal year data in line with forecasts, full-year goals beat expectations. Shares of the shipping company are up about 2%.
Flat oil but at its lowest since the beginning of May
WTI oil is flat at $104 a barrel, little moved after four consecutive sessions of declines that brought it to the lows of the last six weeks.
The Bloomberg index which collects 22 reference commodities closed down 3%, a drop that brought it to its lowest level since March. Almost all raw materials are cooling down but the price of gas in Europe is not going down.
