Central banks, luxury and industrial plans. These are the three drivers of the day on the markets which for the moment are adopting the wait-and-see strategy. “Let's wait for Powell and see what happens”, is the whisper heard in the financial palaces. At 20pm this evening, Italian time, the Fed will give its verdict on interest rates. Nobody thinks that the central bank will touch rates now, but many are hoping to hear some possible indications on monetary policy in the coming months.
In the meantime, all the talking is Christine Lagarde. At the conference “The Ecb and Its Watchers XXIV” in Frankfurt, the president of the ECB confirmed: “By June we will have new projections available which will confirm or not the validity of the inflation trend we predicted in March. If these data reveal a sufficient degree of alignment between underlying inflation trends and our projections, and assuming transmission remains strong, we will be able to move into the easing phase of our monetary policy cycle and adopt a less restrictive policy." . In short, the chances that the Eurotower will decide to cut rates in June are certainly there, but Lagarde warns: "Our decisions will have to continue to be based on data and be defined from time to time at each meeting, on the basis of new information available. This means that even after the first rate cut, we cannot bind ourselves to a specific reduction path."
Latest stock market news: Europe cautious, Paris in the red with luxury
In this context, Business Square continues just below parity (-0,15%), while maintaining the threshold of 34 thousand points. Similar level for Madrid, while they are more inspired Frankfurt e Amsterdam, both up 0,2%. Paris lost more than half a percentage point, weighed down by sales to luxury giants. Outside the EU, London it lost 0,2% despite the slowdown in inflation in Great Britain (+0,6% in February and +3,4% annually).
Kering launches a warning on Gucci sales: the stock sinks and ballasts luxury
It all starts from Kering (-14,2%). The group warned that Gucci's first-quarter sales - which account for half of the group's sales and two-thirds of profits - would fall by around 20% due to the weak situation in Asia. As a result, comparable sales for the entire group could decline by 10% year-on-year in the first quarter.
The alarm raised by Kering "is a rather worrying signal for the luxury sector", comments Citi in a note sent to clients, adding that analysts at this point should reduce their estimates for current operating profit and earnings by 15%. Kering's net earnings per share for the year. JP Morgan experts say they are surprised because Kering's announcement contradicts the statements made by the group on the occasion of the publication last month of its fourth quarter results, according to which Gucci's commercial momentum in Asia-Pacific was seen in improvement. At Gucci, “the transition will take time,” JPMorgan predicts. Equita analysts highlight the "cautious indications" for the first quarter, in particular for Gucci, and cut the turnover estimate by 2% and net profit by 6%, i.e. 7% below the consensus.
The Kering affair is having repercussions on all stocks in the sector. In Paris lvmh yields 2%, Hermes 0,7%. In Zurich Richemont is in the red by 2,9%, in London Burberry marks -3,3% after having also launched a profit warning for January. Italian luxury stocks are no exception, but as the hours pass they try to limit the damage: Moncler (-0,85%), Salvatore Ferragamo (-1,8%), Brunello Cucinelli (-0,28%)
Terna flies in Piazza Affari, Poste Italiane in red
Opposite reactions to the industrial plans of Terna and Post Office. The title of the company led by Giuseppina Di Foggia has been announced revenues, net profit, investments and dividends growing over the plan period, also receiving the upgrade from Equita which improved the recommendation (to Buy) and the target price (to 8,8 euros per share, +5%). The strategic plan presented this morning da Poste Italiane instead it received a rather lukewarm reception. Revenues of 2028 billion are expected in 13,5, up by approximately 3%, operating profit of 3,2 billion (+4%). Net profit is estimated at 2,3 billion in 2028, growing by approximately 4% (cagr 2023-28). According to Equita, the plan is characterized by financial targets "on ebit/net income that are overall in line or slightly lower than our expectations, while better on the remuneration front". The Intermonte analysts point out that, unlike in the past, again on the analyst remuneration front, a year-by-year guidance in terms of DPS has not been indicated." For Banca Akros, however, the expectations on net profit are "slightly lower" than waits.
Profit-taking hits banks, after the strong increases in recent sessions: Pop Sondrio (-2,3%), Ps (-1,3%), Intesa Sanpaolo (-0,8%), Mediobanca (-0,56%).
Instead, it is among the best titles Prysmian (+1,81%), rebounds nexi (+ 1%). Enel e Snam they both earn 0,69%.
Istat: industrial production drops in January
In January 2024, Istat estimates that the industrial production index decreased by 1,2% compared to December and by 3,4% compared to a year earlier. The index therefore returns to November 2023 levels, with monthly decreases extending to all the main sectors, with the exception of energy. The picture is also negative on a quarterly basis. In trend terms, net of calendar effects, a decline is observed in 13 out of 16 sectors. In the main industrial groupings, the decline is very large for consumer and capital goods, while there is a very slight growth for power.
The spread rises, boom in orders for the 10-year BTP
Ascending parabola for the spread, which rises to 127 points compared to the lows of 122 basis points reached last week. The yield on the Italian ten-year bond fell to 3,68% from 3,70% on Tuesday.
On the government bonds front, the excellent result of the Ten-year BTP indexed to inflation, with demand that exceeded supply by more than eight times, reaching 41 billion euros.
The other markets
THEeuro it moves in the 1,083 area on the dollar, while the price of the Petroleum. after hitting multi-month highs in the previous session, with investors preparing for this evening's Federal Reserve announcement on interest rates. May Brent futures fell 1,04% to $86,47 a barrel. The most active May WTI contract is at $81,84 a barrel, down 1,08%. The price also drops gas natural, around 28 euros per megawatt hour.
