Le European stock exchanges they put last week's strong sales behind them and close sharply higher, while Wall Street travels at full sail, towed by the rebound of tech stocks. After having taken Donald Trump's victory for granted, and having positioned themselves accordingly, the markets are now trying to understand what the consequences of the sensational Joe Biden's step back and his endorsement of Kamala Harris. The first effects can already be seen on Bitcoin, which after having exceeded 68.500 dollars last week, convinced that a return of the tycoon to the White House could favor the rise of cryptocurrencies, today slows down below 67 dollars, while the dollar it proceeds smoothly with the exchange rate against the Euro at 1,088.
Stocks rise after Biden, but volatility ahead
Will volatile weeks those to come according to all the main analysts after Joe Biden's withdrawal, a decision with few precedents in history. The fact that he gave his endorsement to his deputy, Kamala Harris, "reduces uncertainty" about the Democratic party, according to Jay Hatfield, CEO of Infrastructure Capital Advisors, who however expects more doubts about the outcome of the vote compared to recent weeks, because for the markets "Harris has a better chance of winning” against Republican Donald Trump compared to Biden. “Donald Trump is still the favorite to win the presidential election, but betting markets suggest he has a slightly lower chance of beating Harris than Biden,” he told Reuters Paul Ashworth, chief economist for North America at Capital Economics. “Harris will have a chance to make himself known to the American public in the second presidential debate, currently scheduled for September 10, although Trump may back out.” Meanwhile, an average of recent polls conducted by CNN comparing Harris (47%) and Trump (48%) highlights a close contest with no clear winner.
However, it's not just the USA: some surprise news arrived overnight from Asia, where the People's Bank of China cut lending rates, bringing them from 3,45% to 3,35%, to new historic lows.
European stock markets rise again in the post-Biden era
In this context, European stock markets closed the first session of the week with a clear rise with the Stoxx 600 which earns over 1% driven by tech sector (+2%) and from banking sector (+ 1,44%).
Recording the best performance on the old continent is Frankfurt (+1,37%), closely followed by Paris (+ 1,41%) and Amsterdam (+1,21%). More backward Madrid (+0,67%), while outside the EU London scores +0,53%.
It joins the general good mood Business Square which closed the day with an increase of 1,17% to 34.615 basis points with 38 blue chips out of 40 rising.
On the stock market, the collapse of Varta (-69%) after the German battery maker said it is discussing two restructuring options that could potentially lead to Porsche taking a stake. Varta shares were also suspended from trading in Italy, reflecting a similar measure in the reference market.
In deep red too Ryanair (16,59%) in Dublin, which this morning announced the accounts of the first financial quarter which began on 1 April, closed with earnings down 46%.
Wall Street rises sharply: Nvidia rebounds, Verizon collapses
Wall Street continues to rise sharply, officially putting behind us the worst week since April for the S&P 500 and Nasdaq Composite. However, investors' eyes are not only focused on politics. The one that has just opened, in fact, is Big Tech quarterly week: they will open the dance A (+ 1,1%) and Tesla (+2,6%) who will publish their accounts on Tuesday after the closing. Also pay attention to the macroeconomic agenda which this week includes the preliminary estimate of the GDP for the second quarter and the PCE data on inflation for June, fundamental for the Federal Reserve's monetary policy. In any case, investors are now certain that the US central bank will lower rates by September.
And so, the Dow Jones it's around parity, lo S & P 500 marks +0,46%, the Nasdaq is up 0,7%.
Among the highlighted titles are:
- Nvidia rises 1,17%, and is among the best on the Nasdaq, after that Reuters reported that it is working on a version of its new AI chips for the Chinese market that would be compatible with current U.S. export controls. The stock has gained 138% since the beginning of the year, but lost 8,8% last week after a massive rotation of stocks in the portfolio to the detriment of Big Tech, which is now recovering.
- Verizon Communications it dropped 6,7%, after recording unchanged profits and in line with expectations, with an adjusted profit of 1,15 dollars, on revenues of 32,8 billion, below the 33,05 billion of expectations.
- The collapse continues CrowdStrike (-10,5%) after the IT crash that sent the whole world into disarray on Friday.
- bofa drops 1,4%: Warren Buffet's Berkshire Hathaway fund sold 33,9 million shares of the bank in recent days for almost 1,5 billion dollars. However, Berkshire remains Bank of America's largest shareholder with a 10,8% stake.
- Instead, it trudges Eli Lilly (-0,3%) which lost 9,4% of its value last week, hit by growing competition and regulatory uncertainties. Pressure on Eli Lilly's stock, considered Big Pharma's Nvidia, increased after Roche's announcement of new weight loss treatments, at a crucial time when Eli Lilly is launching its drug, tirzepatide.
FinecoBank in the spotlight on Piazza Affari, the banks run
After a morning running, in the afternoon FinecoBank reduced the gains, closing the session at +2%. The purchase of the stock was scaled back Zurich's denial about a possible deal with the Italian company. Regarding the press rumors circulated over the weekend, which claimed that Zurich was studying a possible agreement with the Italian company, the Swiss insurance company "categorically denies having any interest in the Italian bank", a spokesperson for the Swiss group told Ansa . According to what was revealed by Radiocor, the dossier "was under study at the beginning of the year but is no longer currently".
The banks are running: they are at the top of the Ftse Mib Ps (+ 3,54%), B for Bank (+ 3,38%) and unicredit, which gains 3.% in view of the quarterly which will be published on Wednesday. Also shop on Bpm bank (+ 2,45%) and Pop Sondrio (+ 2,26%).
It bounces stmicroelectronics (+2,9%), which takes advantage of the recovery of the tech sector around the world. Well Buy the utilities: A2a (+ 2%), Enel (+0,5%) on the ex-coupon date.
On the shields too Iveco (+ 2,56%) and Prysmian (+ 2,52%).
Among the 40 blue chips present on the Ftse Mib only two are in red: they are Eni which limits the damage to -0,06% and above Telecom Italy which slips at the end and loses 4,79% weighed down by the disappointing results of Verizon.
Spreads and oil down
Lo spread between BTP and Bund closes at 130 basis points from 133 at Friday's close, with the yield on the ten-year benchmark falling to 3,74% from the previous 3,77%.
Declining the price of Petroleum, with Brent marking -0,38% at 82,32 dollars a barrel and WTI losing 0,46% to 78,28 dollars.