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Stock exchanges, positive Europe on Fed-day. The accounts of Unicredit and Saipem pass the test of the markets

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Stock exchanges, positive Europe on Fed-day.  The accounts of Unicredit and Saipem pass the test of the markets
Written by aquitodovale

(Il Sole 24 Ore Radiocor) – In the aftermath of a nervous session, Europe is traveling positive on the day of the Federal Reserve, waiting to understand how the institute led by Jerome Powell will be aggressive on rates (the forecast is for a rate hike of 75 basis points, but a more aggressive crackdown, even by one point, is not excluded). The FTSE MIB of Piazza Affari is the best, driven by the good quarterly reports of Unicredit and Saipem, which have passed the test of the accounts and without being affected by the decline in Italian consumer confidence to a minimum since May 2020.
Milan does not even seem to discount the fact that the surprise rating agency S&P announced the downward revision of Italy’s outlook to “stable” from “positive”, confirming the “BBB” rating. The rating agency’s fear is that the fall of the Draghi government “could shift attention away from key reforms and further weigh on confidence and growth at a time of high uncertainty and rising inflation”, essentially causing a slowdown. , if not a reversal, of the reforms needed by the country, also from a NRP perspective. The other continental markets are at a slower pace: DAX 40 in Frankfurt, after consumer confidence fell to -30.6 points, below estimates, CAC 40 in Paris, after household confidence dropped to 80 in July points, FT-SE 100 in London, IBEX 35 in Madrid and AEX in Amsterdam.

In Milan, eyes on the quarterly reports, focus on Unicredit and Saipem

Meanwhile, while overseas Microsoft and Alphabet have disappointed expectations, also in Italy the quarterly season has started: Unicredit has seen its profit rise by 74% to 1.7 billion (without Russia), beating the estimates, it has raised the 2022 guidance and reported that exposure to Russia “is under control”, while Saipem saw its loss for the first half fall to 130 million, beating estimates, and confirmed the plan’s targets. Furthermore, Fincantieri announced that as of June 30th, revenues increased by 16% to 3.51 billion, while the net result was negative for 234 million, also due to a strategic review of orders in the infrastructure sector.

Spotlight on the Fed and the rise in US rates

The main focus, however, is on the Fed’s announcement, which should announce a further adjustment of 75 or even basis points to the cost of US money. Meanwhile, government bond yields continued their decline, not just in the United States. The German Bund nearly halved ten-year yields compared to a month ago, again falling below 1 percent. The movement also allows Italian yields to cool at the same spread: 3.34% over 10 years with an Italy-Germany differential still at 241 basis points.

In Italy consumer confidence at a minimum since May 2020

In July, Istat estimates a decrease in both the consumer confidence climate index (from 98.3 to 94.8) and the composite business confidence climate index (from 113.4 to 110.8). All components of the consumer confidence index, which fell to a minimum since May 2020, explains the Institute, are falling. In particular, the economic and future climate recorded the most marked decreases, falling, respectively, from 93.9 to 84.9 and from 98.8 to 92.9. Business confidence also fell (from 113.4 to 110.8 points).

Confidence in France and Germany declined

Household morale in France recorded the seventh consecutive month of decline in July, a pessimism that affects all aspects of the personal and financial situation of families, according to the monthly survey carried out by Insee. The indicator that summarizes household confidence lost two points to drop to 80, well below the long-term average of 100, the National Institute of Statistics and Economic Studies said.
Furthermore, in Germany, in August, German consumer confidence fell to -30.6 points from -27.7 in the previous month of July. The result is worse than analysts’ expectations which indicated -29.5 for next August.

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