“The Duke climbed to the top of the Torrione of his castle to consider the historical situation for a moment. And he found it confusing. Bulk remnants of the past still dragged here and there…. Will there ever be a way out?” The state of mind of the Duke of Auge, a good friend of Bluebeard, as it emerges from the pen of Raymond Queneau, illustrates well the state of mind of the world of finance on the eve of the August holidays, more than ever propitious for some ambush favored by the fragility of a market where strong ideas are lacking: the shareholder in fact lives in a world that will avoid one recession serious, but the raw material they live in a parallel world that already feels itself in a certainly not superficial recession. And also i bond they remain with a foot and a half in the area of the recession.
A state of uncertainty that involved and largely depends on the pirouettes of the central banks. Accommodative until last November, shaken by the rise in prices last spring, ferocious in the war on inflation until a few days ago. Softer again, judging by the president's words Powell at the end of July, but severe again at the beginning of August, with the contribution of UK close and the confirmation via Economic Bulletin, which in September the ECB he will continue with the "normalization" of the cost of money, without taking into account the advice of Ignazio Visco.
US job market in July: new boom in employment
The data on US job market in July, however, is so eloquent as to dispel most of the doubts. The US economy has absorbed 528 new workers, more than double the expected. Thanks to the recruitment of nurses and waiters back to the pre-pandemic level. Apparently this is good news, but it shows that the Fed's efforts to curb inflation have not done much so far. Indeed, the unemployment in the States it slipped to 3,5%, from the previous 3,8%. The exact opposite of what was wanted by the central bank which proposed a rise in unemployment by at least half a point to cool down the run of wages.
The data immediately translated yesterday into a drop in the equity indices up to that moment in positive territory: Nasdaq -1,3% S & P 500 -1%. And some even feared a much darker red.
Salt on dollar, to 1,016 from 1,024 this morning, and down i Treasury, yield to 2,80% from 2,65%.
A downward ending is also inevitable for i European markets even though they had shown a higher than expected solidity by reducing the decrease since the beginning of the year to 10%. The index Ftse Eb it dropped to negative ground -0,4% and then improved slightly.
July to the rescue for Piazza Affari but the autumn clouds are looming
Business Square, after the excellent July (+5,20% despite the implosion of the Draghi government) benefited from the decisive contribution of the quarterly reports, generally better than expected, but also the economic trend, better than expected, especially in Italy.
But now, as already anticipated by Mario Draghi, the autumn clouds loom. The winds of inflation are still blowing, but the drop in Petroleum it leaves the door open to a recession, which has so far been averted. In the week is the Brent the wtf they slipped to their lowest since February with a loss of around -10% in the worst week since early April. In short, fears of a sudden slowdown in global demand triggered by the predictable offensive by the Fed and other central banks to defeat inflation: August will be really hot, maybe scorching.
