Another one week of passion she left with bags in red and weak performance of the economie and now the showdown with the decisions of the central banks is now upon us: this week the ECB, next week the Fed. Even theAsia is declining with the GDP of Japan that slows down and the China which fears deflation. In all this the European stock exchanges should have the strength to bounce this morning, based on the indications provided by futures.
Only red signs on Wall Street: suspicion of recession returns
The long-awaited data on Friday labor market ndid nothing but confirm the fears that theUS economy is slowing down too much. This week the index Nasdaq has accumulated a decline of nearly 7% and the S&P 500 index of nearly 5%, while Nvidia which has been the locomotive of Wall Street since November 2022, has lost 14% in a week. On Friday alone, the S&P500 lost 1,7% and the Nasdaq 2,5%.
Europe, weighed down by a very subdued Germany, lost over 3% this week. And it is precisely from the Eurozone that the central bank will begin to be dealt with: this Thursday September 12th Christine Lagarde is expected to cut rates again by 25 basis points, after the first cut in June, the first in two years.
With the Fed the appointment is next week, Wednesday September 18thThe latest US data has insinuated among investors that the world's largest economy is on thebrink of a recession and many see the need, to try to patch things up, for a drastic rate cut, of 50% instead of the softer 25bp. But we will have to see what could happen to the dollar if it were to cut too much because it could weaken further against the yen with potential repercussions on carry trade positions.
Japan's Economy Slows, China Fears Deflation
The economic weakness is also felt in Asia and not only in China as has been the case for months, but also in Japan which grew less than expected in the second quarter. In addition, this morning in Asia the effects of the negative closing of Wall Street on Friday are being felt. The MSCI Asia Pacific index is down about 1,1%, at the lowest level in the last three weeks.
On the one hand, the yen's appreciation against the dollar stopped last night (Cross at 142,8), on the other hand, the Tokyo stock exchange, after opening down about 3%, improved but closed with a drop of 0,69%, the fifth consecutive session of decline. The Japanese Economy grew in the second quarter at a slightly slower pace than the government had initially estimated, but the Bank of Japan will continue to hike interest rates. Japan's GDP grew at an annualized pace of 2,9 percent in the three months to June from the previous quarter, the Cabinet Office said Monday. The result compares with a preliminary estimate of 3,1 percent. In unadjusted terms, the economy expanded 1,8 percent from the previous quarter, and the data reaffirmed that the total value of the economy has surpassed 600.000 trillion yen ($4.200 trillion) for the first time in history, a target set a decade ago by Japanese policymakers. Consumer spending rose 0,9 percent from the previous quarter, a sign of recovery after falling for four straight quarters. “Today’s data will not really affect the BOJ’s policy stance,” said Takeshi Minami, chief economist at the Norinchukin Research Institute. “It is unlikely that they will raise rates this month given the volatility in financial markets, but they have made it clear that a rate hike is on their minds, so I think another hike within the year is possible.”
Along the same lines, it loses ground Shenzhen, which retraces by 0,93%. In sharp decline Hong Kong (-1,69%); on the same line, below parity Seoul, which shows a decrease of 0,22%. At the levels of the day before Mumbai (+0,21%); slightly negative Sydney (-0,32%).
In China deflation risk is confirmed after weak growth in consumer prices, which rose in August by just 0,6%, compared to 0,5% in July and the 0,7% forecast by analysts. The figure, released by the National Statistics Office, is the highest since February and marks the seventh month in a row of inflation, albeit minimal. producer prices, on the other hand, fell 1,8% from 0,8% in July, even worse than the previous day's estimate of -1,4%: the decline has continued for 23 months reflecting the weakness of domestic demand. Former governor of the Central Bank of China (PBOC), Yi Gang, warned last week that Beijing needed a "proactive fiscal policy" and "accommodative" monetary measures to support demand. China's GDP deflator, which measures the impact of inflation on the real value of an economy's total output, has been negative in recent quarters, Yi noted, indicating the insidiousness of deflationary forces in the economy.
La India Stock Exchange The Seoul KOSPI index is little moved, down 0,2%.
Il WTI oil bounces back after five consecutive sessions of decline, at 68,5 dollars a barrel, +1%. A hurricane is forming in the Gulf of Mexico: if there are no changes in direction, the winds and rains should hit the coasts of Louisiana and Texas around the weekend.
European stock exchanges: what to follow today
European stocks are expected to rebound and open higher, with the EuroStoxx50 index futures gaining 0,5%.
Saint Lawrence announced that, between September 2 and 6, 2024, it purchased a total of 35.000 ordinary shares at an average price of 34,31 euros per share, for a total value of 1.200.896,95 euros. The leading company in the luxury yachting sector now holds 166.459 of its own shares.
Stellantis. Business Minister Adolfo Urso said the European Union should decide as early as next year whether to rethink legislation that bans the sale of new petrol and diesel cars in the 27-nation bloc starting in 2035. Meanwhile, Stellantis announced on Saturday it was recalling 1,46 million vehicles worldwide because of a software malfunction in the anti-lock brake system that can increase the risk of accidents.
Enel. Business Minister Adolfo Urso also said that Italy plans to develop rules by early 2025 that would allow the use of new technologies for nuclear energy. In particular, it is working on the creation of a newco with a foreign technology partnership to build nuclear reactors in the country. Enel's electricity grids chief Gianni Vittorio Armani said the energy giant is interested in studying new technologies for nuclear energy, including small modular reactors.
A2A. CEO Renato Mazzoncini said that the appointment of the Minister for European Affairs Raffaele Fitto as EU Commissioner could facilitate dialogue with Brussels on the issue of renewing hydroelectric concessions.
Edison. CEO Nicola Monti said that a return to Piazza Affari, from which the company exited in 2012 (only the savings share is listed), cannot be ruled out and that the proceeds from the sale of the storage facilities to Snam will be used for M&A operations with an eye on Greece and Spain.
Mps. The Undersecretary of the Treasury, Federico Freni, said that the deadlines for the sale of his shares will be respected but without any rush.
Unicredit is planning with the unions a package of 1.000 incentivized exoduses through the Solidarity Fund, of which 320 have already been identified and 680 to be agreed upon by 2030.
Leonardo. President Stefano Pontecorvo, in an interview with Il Corriere della Sera on Saturday, said that defense spending should be deducted from the calculation of the public deficit, at least in the first phase, to allow European countries that also belong to NATO to increase their investments in the sector towards the threshold of 2% of GDP. Collaboration with Rheinmetall on a new tank is proceeding well and Leonardo is open to other cooperation with others, the president added.
