October brings new drops to the European stock markets and various shades of red paint the closing stock markets today, while Wall Street moves mixed at the end of the morning, in waiting for an intervention from Jerome Powell, in these hours in Pennsylvania. At the same time, the prices of T-Bonds and rates rise, with the Stars and Stripes ten-year bond at 4,68%, again at the highest level since 2007.
The stock exchanges in Europe and the BTP Valore
Piazza Affari is the worst and loses 1,39%, falling to 27.849 basis points, with investors also distracted by the new Btp Value, than on the first day of placement it has already grossed 4,77 billion of Euro. A good debut, even if in the June issue, on the first day, it exceeded 5 billion.
As regards the other European markets, the picture is not very different: London -1,27%, Frankfurt -0,92%, Paris -0,95%, Madrid -1,15%, Amsterdam -0,63%. Between the various stocks at least Biontech celebrates, with an increase of 3,01%, the Nobel Prize for medicine to Katalin Karikó and Drew Weissman for the discoveries that "led to the approval of two highly successful Covid-19 vaccines based on mRna at end of 2020.
Stagnant manufacturing in Europe
The markets can feel the different economic climate on the two sides of the Atlantic, also in terms of monetary policy. The manufacturing does not promise anything good in the euro zone and in September the sector's PMI fell for the fifteenth month in a row to 43,4 from 43,5 in August, with the third quarter below the ax of 50 that separates contraction and expansion.
Furthermore the index that measures production, which is included in the composite PMI expected for Wednesday and which is considered a good indicator of the economic health of the euro zone, fell to 43,1 from 43,4. In the USA instead the manufacturing ISM reverses course, despite failing to cross the coveted border: 49, from 47,6 in August and against expectations of 47,9. A trend that could offer Powell good reasons to maintain the tightening for a long time. The data also weighs on the currency market, where the euro is in sharp decline against the dollar with an exchange rate in the 1,049 area.
World Bank cuts estimates for China; oil declines
Therefore, after the sigh of relief seen at the beginning on the European markets, following the political agreement reached over the weekend in the USA to avoid the shutdown, the stock markets of the Old Continent began to shake due to the performance of manufacturing in the Euroland and in Great Britain (where the index rises, but remains weak at 44,3), while the World Bank cuts its growth forecast for China to 4,4% next year (from 4,8% previously), warning that the performance of developing Asian economies is destined for one of the lowest rates of the last five decades, thanks to US protectionism and the growing cost of debt. Under the weight of this news, oil is losing ground, with Brent dropping 1,4% each way to around 90,90 dollars a barrel.
MPS does well in Piazza Affari, gains on oil stocks
In Piazza Affari we find only six blue chips on the rise, some of which are often in the spotlight lately. It's at the top of the list Banca Monte Paschi di Siena, +1,62%, with ever new rumors about its future that keep the title effervescent. At his side Banco Bpm, +0,24%, in an overall weak banking sector, where Unicredit lost 2,97%. Telecom also showed a small increase, +0,3%, awaiting news on the network. Well Ferrari, +1,11%, with Prismian +0,21% and Stm +0,17%.
An indigestible day, however, for oil stocks, which are losing share in the wake of drops in the price of crude oil: Saipem -3,67%, Tenaris -3,44%, Eni -2,33%. Others suffering sectors are: managed savings, especially with Poste -2,93% and Finecobank -2,82%; utilities, starting with Erg -3,06%, Hera -2,93%, Enel -2,73%.
Spreads down
Lo spread between the benchmark 186-year BTP and its German counterpart, it drops significantly to 3,98 basis points, (-XNUMX%), more due to the demerit of the Bund than to the merit of the BTP. In fact, it is the ones that move the differential sales on the German title, which at the end showed a rate of 2,91% (from 2,84% on Friday), against the Italian stock which maintained 4,77%. The reasons for this detachment can probably be found in the stagnation which is especially affecting the German manufacturing. For Cyrus de la Rubia, chief economist of Hcob, in fact "in the race to the bottom, France and Germany are leading the September PMIs. Instead, Spain and Italy fare less worse."