The mid-August rally in Piazza Affari continues, exceeding 26.500 points and closing up by 0,38%, led by Stellantis +2,66%, but held back by the banking sector, the subject of some profit-taking. The Milanese price list continues to move at its highest level since 2008, while the Cac 40 in Paris, +0,36%, is approaching the historic record that dates back to 21 years ago. In the rest of Europe Frankfurt appreciates by 0,7%, Madrid and Amsterdam are practically colorless, while London loses -0,35%, weighed down by the mining sector following the crash of Rio Tinto (-5,5%).
Wall Street is moving on the same wavelength, with the Dow Jones declining slightly after two consecutive sessions at record levels, while the Nasdaq appears to be recovering. We are moving cautiously from one side of the Atlantic to the other, both due to the high levels reached, and due to the Delta variant which looms over the recovery and slowed down the Asian stock market session, and due to the uncertainty about the next moves of the Fed in the light of constantly updated inflation and jobs data. Consumer prices in July, as seen yesterday, grew at a slower pace than in June, a sign that inflation may have already reached its peak.
Today it emerges that weekly claims for unemployment benefits in the US fell to 375.000, down by 12 and in line with estimates, while producer prices in July grew more than expected, +1%, against expectations for +0,6%; the "core" component – the one purged of the more volatile components represented by the prices of food and energy goods and commercial services – grew by 1%, against expectations for +0,5%. Compared to a year earlier, the increases were 7,8% and 6,2%, the highest ever recorded since the survey took place, ie for 10 years now. Investors are therefore grappling with these data, to understand how they will guide the Fed's choices. It now seems obvious that in the coming months the North American central bank will begin to reduce its support for the pandemic emergency by cutting the 120 billion dollars of purchases monthly bonds. What is far less certain is the timing and pace of any subsequent interest rate hikes, a more consequential step that will depend on which view of inflation prevails.
According to Mary Daly, governor of the San Francisco Federal Reserve and voting member of the FOMC, tapering can begin by the end of 2021. “It is appropriate to start discussing a reduction in the level of aid we are giving to the economy. And it starts with asset purchases, of course,” she said in an interview with the Financial Times. Daly expressed optimism about the economic recovery, downplaying any impact of the Delta variant of the coronavirus. The Fed's jobs and inflation targets, according to the governor, will be met by the end of 2021 or 2022.
On the currency market, the dollar is stable, just below the highs for 4 months. The heart of the greenback beats to the rhythm of the Stars and Stripes central bank valuations and, according to what Commerzbank analysts write to their clients, after yesterday's consumer price data "inflation is more likely to return to 2% target and less likely that the Fed will have to hike rates more aggressively than hitherto imagined. The dollar index is up by 0,08% and the euro changes on the previous day's levels of around 1,173.
The government bond thermometer shows prices slightly down and yields up moderately. The ten-year marks +1,366% from 1,359% yesterday. In the share market, Moderna rebounds after the crash of the last few sessions following the observations of a Bofa-Merryll Linch analyst who, data in hand, claims that the quotations are too high. Meanwhile, during the day, the Washington authorities should give the green light to the third dose of Moderna and Pfizer Biontech's anti-Covid vaccine for fragile subjects.
The raw materials are not moved. Gold is trading at previous close levels at $1751,90 an ounce. Oil, such as Brent, fell by 0,2% around 71,30 dollars a barrel. As regards the session in Piazza Affari, behind Stellantis, there are Interpump +1,45%, Amplifon +1,4%, Diasorin +1,25%. Atlantia appreciates by 1,24% also following the increase in air and motorway traffic. Equita analysts note that the former "improved again after a few weeks of stabilization". Aeroporti di Roma (controlled by Atlantia) records -60% compared to 2019 against -82% since the beginning of the year, while Nice sees -39% (against -69%).
At the bottom of the list are Banco Bpm -1,24%, Unicredit -0,87%, Finecobank -0,91%; Bper -0,7% after the recent increases. Telecom loses -0,86%. Out of the main basket, Ulisse Biomed deflates -20,35% after the good earnings since its debut on last Friday's Aim. Spreads down to 100 basis points, with the Italian 0,55-year rate down to +0,5% and that of the Bund stable at -700%. Bank of Italy announces that, in the placement reserved for specialist operators, the Treasury issued 12 million annual BOTs expiring on 08/2022/884,7 and the demand amounted to XNUMX million euros.
