MILANO – Markets closed for the Easter holidays in Europe and on Wall Street, precisely on the most awaited day of the week when the US PCE inflation data arrives, with prices rising less than expected, by 0.3% on a monthly basis (from the expected 0.4%) and 2.5% on an annual basis. For the number one of the Fed, Jerome Powell, are “in line with what we want” but “the economy is strong and there is no need to rush with rate cuts. Note the Financial Times that, between the realization of an American “soft landing” and the enthusiasm for the artificial intelligence boom, global stock markets closed the best quarter in five years with the global MSCI index gaining 7.7%, top since 2019. Although traders had to deal with the postponement of rate cuts, the S&P500 (+10.1% in the quarter) set 22 records during the quarter. Milan did well in this period: Piazza Affari recorded a progress of 14.5% which brought the index steadily above 34 thousand points to new highs since 2008. After +1.3% in January and +6% in February the price list accelerated further in March, recording an increase of 6.7%. It was thus the best in Europe: Frankfurt gained 10.5%, Paris 8.8% and Madrid 9.6%. London was left behind with +2.8%. The Moscow stock market rose by 4.1%, while Shanghai stopped at +1.2%. The pink jersey goes to Tokyo which, thanks also to a yen that fell to a 34-year low, grew by 21%.
Powell: “Inflation in line with expectations but there is no rush to cut rates”
PCE inflation data for February are “more in line with what we want to see”. Federal Reserve Chairman Jerome Powell said this in an interview at the San Francisco Fed. The central banker noted that “it is positive to see that the data is in line with expectations.” But at the same time he added that “there should be no rush to cut” rates and that “the risks are too high, the first cut is a very important decision”. Powell was also keen to point out that “we did not react in an excellent way to the good data from the second half of last year”.
Moody’s: “Debt alarm with NATO arms race”
The arms race in NATO countries triggered by threats from Moscow “will complicate debt reduction efforts and could weaken their credit profile” exacerbating social conflict: “Spain and Italy are particularly vulnerable”, having “the largest gaps in defense spending (compared to the NATO target of 2% of GDP, ed.) and the lowest levels of popular support for further increases in military spending”. The alarm comes from the rating agency Moody’s, according to which in the base scenario Italy’s debt would rise to 144% of GDP in 2030, but would reach 147% if 2% was reached.
China, another blow to the financial markets: Syngenta withdraws its plan to list in Shanghai
The seed giant Syngenta raises the white flag and puts on the back burner its plan, dating back to 2021, to list on the Shanghai Stock Exchange in an initial public offering worth 9 billion dollars. He says he will try to restart the machinery for the IPO, in China or on another world stock exchange, when the right conditions are right, by announcing the stop. Which in the meantime is another sign of stress for the Chinese financial markets, a few days after the abandonment of another operation: the listing of Alibaba’s logistics arm. While stock markets in Europe and the United States are at their highest, Shanghai has fallen from five-year lows in February, and overall has lost more than a third of its value from its 2021 peak onwards, recalls Bloomberg who broke the news. Syngenta, also active in genetically modified seeds and pesticides, is Swiss but since 2017 it has been under ChemChina which acquired it for 43 billion.
Tim, agreement with unions: solidarity until June 2025
The agreement was signed tonight between Tim and the trade unions on solidarity contracts until 30 June 2025. The objective is to manage 3560 redundancies. For 8,500 people a 5% reduction in working hours will be applied, for 23,300 13.84%; 13.84 percent will always be applied to employees of Noovle, Olivetti, Telecontact and Sparkle. The agreement will make use of the sector solidarity fund, explains a note from Fistel Cisl and, in case of inability, there is a side letter from Tim which undertakes to pay up to 80% for the solidarity days.
The decline in bank branches continues, 800 fewer in a year
The decline in bank branches in Italy continues, with over 800 fewer at the end of last year. As can be seen from the Bank of Italy tables, 2023 saw a further reduction from 20,985 at the end of 2022 to 20,161 at the end of 2023. The decrease, underlines Via Nazionale, affected all the regions and was more accentuated in percentage terms in the Marche, in Abruzzo and Sicily.
Confindustria: economy in moderate decline in the first quarter
The first quarter of 2024 is “moderately declining for the total economy.” This was revealed by Confindustria’s February Rtt index, the new Real Time Turnover indicator, which provides monthly dynamics of the volume of activity based on company turnover, and accompanies the CSC’s rapid survey on the activity of large industrial companies. In February, the RTT indicates a moderate decline in turnover at constant prices of companies, equal to -0.2% (following -0.5% in January).
Panasonic, Apollo fund acquires 80% of auto assets
The American investment fund Apollo has an agreement to acquire 80% of its assets relating to automotive technological systems and solutions from the Japanese Panasonic. The Panasonic battery business is not included in this business. The transaction values the assets at 311 billion yen, or 1.9 billion euros at the current price. The transaction is expected to be completed within one year.
Gold: new historical record
New historical record for gold which closed at 2,254.80 dollars an ounce, up 1.9%. Overall, gold futures rose 9% in March, the biggest monthly gain since July 2020. The yellow metal continues its rally after the Federal Reserve confirmed it expects three rate cuts this year, with the first probably in June, which suggests that there is no concern about the recent rise in inflation. The ounce has moved sharply higher since mid-February, with investors moving to terrain considered safer, also in light of the worsening geopolitical risks.
Tokyo rises by 0.5%, +21% in the quarter
The Tokyo stock market closed on the rise, following the movement of US stock prices which reached new highs thanks to positive American economic indicators, such as the increase in consumer confidence in March. At the end of the session, the Nikkei index recorded a gain of 0.5% to 40,369.44 points, thus closing a very positive quarter (+21% since the beginning of the year). The broader Topix index also performed well, ending the session up 0.65% at 2,768.62 points.
China on the rise, Hong Kong closed
Chinese stock markets continue to rise in today’s session with reduced trading. In Shanghai the Composite index gained 0.75% to 3,033 points, while the Shenzen Composite index on the second Chinese stock exchange rose by 0.02% to 9,345 points. The Hong Kong market is closed for holidays, as are the stock markets of Australia, India, Indonesia, New Zealand, the Philippines and Singapore in the rest of Asia.
EU stock exchanges closed
European stock markets and Wall Street remain closed for holidays on a day full of economic data. Inflation numbers for the month of March are expected in Italy and France, expected to accelerate and slightly decline respectively. The US PCE data, the Fed’s preferred price indicator, also comes out in the early afternoon. Consumer and producer prices in the United States have already been published and were slightly worse than expected. The forecast is that the ‘core’ PCE in the USA will remain stable at 2.8%. Today (at 4.30 pm Italian time) Jerome Powell will also speak, who this week used ‘dove’ tones. Lately within the Fed the climate has not been one of great unity and there has been no shortage of contrasts between hawks and doves.
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– 2024-05-13 01:29:29
