All eyes are on Jerome Powell's next statements on Friday at the Jackson Hole symposium, expected to give indications on the extent of the next US rate cuts, the first after the pandemic. Meanwhile, stock markets are starting to rise again, from Wall Street to Tokyo, with the expectation of a positive opening in Europe too. Tech stocks shine again on the US stock exchange, with Nvidia in the front row. Brazil's progress should be monitored
Wall Street closes higher. Nvidia shines with +4,35%
Yesterday on Wall Street, in the first session of the week, the main US stock indexes closed in positive territory and the turbulence of the first part of August is mostly dismissed as a summer storm. The VIX volatility index is falling for the fifth consecutive day at 13,30, while the tech sector shines again. If the Dow Jones achieved an increase of 0,58% to 40.897 points, and theS & P500 0,97% to 5.608 points, the Nasdaq accelerates by +1,39% to 17.877 points, with Nvidia which gains 4,35% to 130 dollars. Positive day too Advanced Micro Devices (+4,52% to 155,28 dollars). The company announced the signing of a definitive agreement to acquire ZT Systems, a provider of cloud computing and artificial intelligence infrastructure. The value of the transaction has been determined at $4,9 billion, which will be paid in a mixed cash-share manner, including a payment of up to $400 million based on certain additional milestones. Ten-year Treasury Note yield at 3,88%.
US stock index futures are stable. The focus is on the speech of Powell at the Symposium of Jackson Hole on Friday, where it is expected to provide further guidance on the US central bank's plans to begin cutting rates. The minutes of the Fed's latest meeting are expected tomorrow, August 21. According to a small majority of economists interviewed in a Reuters poll, the Fed could cut interest rates three times by a quarter of a point between now and the end of the year. Frankfurt could also cut rates in September given the persistent weakness of the economy, as central banker Olli Rehn underlined on August 19. Today at 14pm the weekly Redbook index arrives (previous: +55% year on year).
Asia-Pacific stock markets positive, Dollar at 2024 lows
Most Asian stocks are rising, following the rally on Wall Street, also awaiting Jackson Hole. The Nikkei Japanese gains 2% and is at a three-week high, supported by technology stocks. The Kospi in South Korea rose by 0,9%.
In Australia The ASX 200 limited gains to +0,2% as the Reserve Bank of Australia's August meeting minutes showed the bank was considering a rate hike and signaled it would keep rates high for a longer period.
Only the ones move against the trend Chinese markets, after the People's Bank retained its interest rate unchanged primary lending benchmark, as expected, disappointing some traders who were expecting more surprise cuts from the central bank. While recent macro data showed some improvement in Chinese consumer spending and inflation in July, overall sentiment towards the country remains undermined by lingering concerns about slowing growth. What worries the experts is always the Chinese real estate sector in crisis. In this regard, Kaisa Group Holdings has reached a restructuring agreement with a group of creditors, foreseeing the issuance of new bonds that could exceed 10 billion dollars, a step that could help the Chinese manufacturer defend itself from a liquidation request. Under the terms of the deal, Kaisa plans to issue new dollar bonds – totaling $5 billion in five tranches and an unspecified sum in another tranche – to partially repay creditors.
The surge of the Brazilian stock exchange
In South America, the main stock index of the Brazilian Stock Exchange of Sao Paulo, the Ibovespa, exceeded 136 thousand points for the first time in history, up by 1,53%. The Real, the Brazilian currency, also appreciated against the US dollar by 1,2%. In a speech, Gabriel Galípolo, current director and indicated by the government as the next president of the Central Bank, confirmed the Central Bank's commitment to bringing Brazilian inflation back within the established range, between +3 and + 4,5%.
Dollar falling against euro and yen
Ahead of the Fed's first monetary easing since emerging from the pandemic, the greenback remains under pressure against both the euro and the yen. The Euro/dollar is at 1,107, the highest since the beginning of the year. The yen also sees a new appreciation against the dollar, similar to that which occurred at the beginning of August, with the ratio between the greenback and the Japanese currency returning to 146,5, down 2% compared to last year's values. week.
Among other variables: Oil: Brent and WTI -0,8%, Bitcoin at 60.800 dollars, +3%. Gold little moved at $2.501: A weaker dollar combined with lower bond yields helps precious metals.
Europe expected to open on the rise. Here's what to follow
European stock markets are expected to open with little movement, based on the EuroStoxx50 index future rising by 0,6%. Milan's FtseMib closed its sixth positive session in a row yesterday. On the bond front, the yield of the ten-year Bund is at 2,25% and that of the BTP is at 3,625% with the spread between the two which is at 140 bps. In Germany producer prices in July rose by 0,2% cyclically and fell by 0,8% yoy.
This morning there Swedish central bank announces its decision on interest rates. It is expected to cut by a quarter of a point to 3,5%, then make two more cuts by the end of the year as inflationary pressures continue to decline.
At 11am on the agenda are Eurozone final July inflation (preliminary: unchanged month on month, +2% year on year) and final July core inflation (preliminary: +2,9% year on year).
Eni. In Plenitude's summary documents for the market and the financial report of the parent company, the six-legged dog company indicates that an in-depth analysis, compared to the data communicated by Eni on 26 July with the numbers for the first half of 2024, which shows that a strong year-on-year progress in net profit, which went from 120 million euros in the first half of 2023 to 200 million euros in the first half of 2024, with a jump of as much as 70%. The estimate for the end of the year is around 250 million euros, which compares with the 220 million euros at the end of 2023. The focus is on acquisitions in renewables and growth abroad. The company destined for the stock exchange aims to close 2024 with an EBITDA of 1 billion. The CEO of the parent company Eni, Claudio Descalzi, confirmed to MF-Milano Finanza the possibility of selling a second tranche before the listing on the stock exchange, to an investor other than Eip, which through a capital increase of 588 million euros has already secured a 7,6% stake.
Generali. The Central Bank of India is expected to take over Future Enterprises' 26% stakes in both Future Generali India Insurance Co. and Future Generali India Life Insurance Co., according to the Economic Times.
Unicredit concluded the third tranche of the 2023 buy-back program, purchasing a total of 42.242.975 shares, equal to 2,58% of the capital, for a total value of approximately 1,5 billion euros.
Stellantis. THEThe United Auto Workers union has announced that some local units representing the group's workers could launch a nationwide strike, accusing the automaker of not respecting production commitments. The dispute concerns agreements that, according to the union, Stellantis made in 2023 as part of a new employment contract.
