On Wall Street, awaiting the flurry of quarterly reports on the agenda and the outcome of the Fed meeting, Tech stocks continue to lose ground and analysts say that the decline is not over yet. In Europe the entire banking sector shines, driven by the excellent performances of the Italian companies. In Japan the Boj raises rates
On Wall Street, the decline in tech stocks is not over
Wall Street is awaiting the Big Tech accounts and the outcome of the Fed summit. While today will be the turn of Meta, yesterday it was ecosystem to attract attention. The company, which released the data after the close of trading, reported a 10% increase in earnings in its fourth quarter and revenue of $64,7 billion, up 15% from a year earlier. The stock, which fell to -7% after the stock exchange, now trades at -3%. Yet the software giant closed the fourth quarter with revenues up 15% to 64,73 billion dollars, above the expectations of analysts who were betting on 64,52 billion. Net profit increased by 10% to 22,0 billion. Revenues from the Cloud division amounted to 36,8 billion, less than the 36,84 billion expected by the market. The entire technology index Nasdaq, already under pressure for weeks, closed yesterday down 1,3 percent.
Sale Advanced Micro Devices +7% The chipmaker gave an upbeat revenue forecast, noting that its new AI processors are boosting growth. Second-quarter results also came in better than forecast, and the company raised its forecast for so-called artificial intelligence accelerators (chips used to develop artificial intelligence models).
This note of optimism is not enough to restore good humor. “Our overall view is still supportive of rotation and we expect cyclical, value and small-cap stocks to continue to perform positively on a relative and absolute basis,” although there may be some short-term “sell the news” trading post-Fed, Vital Knowledge's Adam Crisafulli wrote in a note. “There are still a lot of people waiting to get out of “big tech stocks.” July is starting to be the month of rotation. For theBloomberg index of the Magnificent 7 it should be the worst month in a year with a provisional loss of around -4%. It should be noted that the loss from mid-July onwards was -13%. For the Russell 2000 index it should be the best month of 2024 with a provisional +10%. The expectation of a rate cut should favor a further broadening of the rally in the sectors that have lost ground over the last year. Our view is still favorable to rotation. We expect cyclical, value and small-cap stocks to continue to perform positively or better than Big Tech, which needs more time to consolidate.
Bank of Japan raises rates
La Bank of Japan he raised his interest rate benchmark and presented a plan to reduce bond purchases, underlining its determination to normalize monetary policy. The reference rate rises to around 0,25%. With these measures, Governor Kazuo Ueda demonstrated his willingness to proceed with normalization after years in which the bank pursued an ultra-interventionist policy on the economy. China's manufacturing PMI remained negative in July, falling 0,1 point to 49,4. The parallel index for the services sector also fell by 0,3 points, although it remained in positive territory at 50,2.
In Europe, the banking sector dominates, driven by Italians
Le European banks take off thanks to an excellent quarterly season on average. The Stoxx Banks index yesterday reached a level not seen for nine years. The 2024 performance grows to +22%, the best result at a sector level. Much of the credit for the rally goes to blame on the Italian banks. The Ftse It. Banks index rose to its highest level since 2011, extending its 2024 performance to +46,50%. In second place, far behind is the Pharmaceuticals (+15,5%). The Stoxx 600 index is stuck at +7,4%. The FtseMib index is stuck at +12%.
While waiting for the big names on the web, Piazza Affari consoles itself with the sensational accounts of our local banks. Intesa Sanpaolo closed the first half of the year with profits of 4,8 billion euros, up 12,9% compared to the same period of 2023. The CEO Charles Messina called it “The best semester of the last seventeen years”. The second quarter, in particular, stands out with a profit of 2,47 billion euros, exceeding the expected 2,3 billion. The institute expects net profit of more than 8,5 billion euros for 2024 and 2025, and announced an increase in the dividend per share, significantly improving its previous forecasts.
Worth noting: they will come out today the accounts of Meta, UBS, HSBC, Boeing, Lufthansa, Telecom Italia, and Mediobanca.
Between January and June Poste Italiane recorded revenues of 6,2 billion and a profit above one billion, up 14,3%.
In the second quarter of the year the gross domestic product of Italy it grew by 0,2% in economic terms and by 0,9% on a trend basis.
La British oil company BP reported net profit of $2,1 billion in the first half of the year, a decline of 78,7% compared to last year (Cnbc). Airbus closed the first half with a 46% drop in profits to 825 million euros, due to a charge of almost 1 billion euros in its space activities (The print).
Gold continues to rise
Gold at 2.426 dollars, slightly appreciating from yesterday's +1%: the month is about to end with a 4% increase. Soaring gold prices are dampening demand for traditional applications such as jewelry and dentistry, but the voracious appetite of Asian investors is more than offsetting other declines. Strong buying of physical bullion in the over-the-counter market, particularly by Asian family offices, helped gold demand record its best second quarter in data going back at least 25 years, according to the World Gold Council .
