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Volatile Wall Street with Powell, car sales hold back Europe. Spread under 200 points

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Volatile Wall Street with Powell, car sales hold back Europe.  Spread under 200 points
Written by aquitodovale

(Il Sole 24 Ore Radiocor) – Sales on European stock exchanges prevail, while concerns about growth and inflation return to the fore. On the third day of the Sintra ECB forum, all eyes are on the round table with Christine Lagardepresident of the ECB, e Jerome Powell, number one of the Federal Reserve, which warns: “We know that growth may be slower” but “we must take it into account because our goal is to bring down inflation.” In any case, he assures him, the US economy is “well positioned to resist a tightening of monetary policy.” He echoes the number one of the ECB: “I do not think we will return to the context of low inflation that existed before the pandemic.” The FTSE MIB in Milan, the CAC 40 in Paris, the DAX 40 in Frankfurt, the FT-SE 100 in London, the IBEX 35 in Madrid and the AEX in Amsterdam travel in red. Under pressure all the car sectorafter the agreement between the European environment ministers which sanctions the stop to diesel and petrol engines from 2035.

Volatile Wall Street, towards worst half year in 52 years

Volatile Wall Street as the first half of 2022 will close on June 30: the S&P 500 is losing about 20% since the beginning of the year and could file the first six months as the worst since 1970, when it lost on the 21st, 01%. A little while ago, the final reading of the GDP of the first quarter of 2022 was published, which decreased at the annualized rate of 1.6% compared to the previous three months, while the expectations were for a confirmation of -1.5% of the second. reading; at first reading, a -1.4% was recorded. In the fourth quarter of 2021, GDP had increased by 6.9%. Consumer spending, which represents 69% of the US economy, increased by 1.8%, down from 3.1% in the second and after 2.7% in the first reading; in the last quarter of 2021, they had increased by 2.5%. At the center of fears remains inflation, which has brought consumer confidence (Conference Board) to its lowest level since February 2021 and the component that measures expectations for the future at the lowest level since March 2013. The Dow Jones falls by 2 , 82 points (-0.01%), the S&P 500 loses 12 points (-0.32%), the Nasdaq is down by 71.72 points (-0.64%). WTI oil at Nymex rises by 1.57% to 113.51 dollars a barrel, due to concerns about demand, reinforced by the G7’s willingness to work towards the phasing out of Russia’s dependence on energy.

FTSE Mib stock market trend

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Cars down in Milan, focus on Popolare di Sondrio

At Piazza Affari, eyes still focused on Saipem: between stop (volatility) and go, on the third day of the € 2 billion capital increase, rights (which represent a large part of the group’s capitalization) drop by 54% while shares rise to the top of the list principal. A downward trend for almost the entire Ftse Mib, with cars recording the most marked decreases, in line with the trend of the sector in Europe, with Stellantis, Ferrari, Pirelli & C and Cnh Industrial among the worst. Nexi and Unipol are saved, while among the banks on the main list only Banco Bpm advances. In the spotlight, Banca Pop Sondr, which approved the new “Next Step” 2022-2025 plan: in 2025 a net profit of 323 million is expected from 269 million in 2021, with an intermediate stage to 263 in 2023. Equita analysts the targets are better than expected. Another session of passion for Mps, which has lost 20% since the announcement of the plan and the capital increase.

Inflation holds its own but slows down in Germany

Concerns over growth and inflation are holding their ground, after weak US consumer confidence at a 16-year low and the decline on Wall Street, while the market expects indications of rate hikes and bankers’ forecasts from Sintra power plants on growth e inflation. Communications from central bankers are increasingly hawkish, promising increasingly aggressive interest rate hikes. The risk of recession also due to monetary policy errors it is therefore high, since inflation, especially in Europe, is mostly due to an increase in the prices of energy products, which are not very sensitive to the increase in rates », comments Luigi Nardella of Ceresio Investors. In June German inflation it is estimated to grow by 0.1% on the month and 7.6% on the year. An increase that was lower than forecasts, which indicated an increase of 0.5% in the economy and an 8% trend. The trend figure for June represents a slowdown compared to the 7.9% recorded in May. Conversely, he surprised the sharp acceleration of the Spanish figure to the new record of 10% driven, needless to say, by food and energy.

Waiting for the start of the quarterly season

On the equity front, the market is positioning itself ahead of thestart of the quarterly season, which will give the pulse of the effects on the balance sheets of companies of the difficult phase caused by the effects of the war in Ukraine and the easing of monetary policies. «The quarterly reports will show the impact of inflation on different sectors and companies; we will see who will be able to benefit from the still strong demand and defend their margins – says Nardella of Ceresio Investors – our focus is on leading companies in their sectors, which manage to increase the prices of their products and services, and whose valuations are are heavily compressed due to the increase in rates ».

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