Stock markets: falling yields give Europe a boost. Milan rebounds (+0.9 per cent) as Lottomatica surges
Brent crude at around $96. Wall Street is up following Waller’s comments, suggesting the Fed will keep rates on hold in September. The euro is trading at around $1.16, whilst the yen is strengthening. Bitcoin is back at $80,000.
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(Il Sole 24 Ore Radiocor) - A volatile session for the European stock markets, which ended the day on a positive note. This was partly thanks to a strong day on Wall Street, fuelled by falling bond yields, which were also down in Europe. Investors’ attention then turned to the Middle East, where new attacks by Iran struck several US bases in Kuwait and the United Arab Emirates. The new offensive has pushed oil prices back up, with Brent crude rising above $96 a barrel, whilst WTI. This rise was partly offset by reassurances from US President Donald Trump, who stated that oil volumes passing through the Strait of Hormuz had returned to near pre-war levels. Meanwhile, Federal Reserve Board member Christopher Waller has stated that he is in favour of keeping interest rates unchanged at the US central bank’s September meeting. This is on condition that there are no surprises in the upcoming inflation figures.
Thus, Milan closed 0.88 per cent higher at 52,245 points. Elsewhere in Europe, Frankfurt closed up 0.6 per cent, whilst Paris lagged behind (+0.1 per cent), weighed down by a decline in the luxury sector. On a macroeconomic level, following the release of producer price data (+1.6% in July), expectations are growing that the ECB will tighten monetary policy in September.
Wall Street on the rise
Stock markets on Wall Street were up, thanks to Waller’s encouraging comments on interest rates, but also to the fall in Treasury yields. The yield on the 10-year US Treasury has in fact fallen below the 4.8 per cent mark, after hitting a high of 4.814 per cent – a level not seen since November 2023. Traders across the Atlantic are also monitoring oil prices and awaiting new US employment figures, due tomorrow.
In the equity market, shares in Snowflake have surged, after the company reported better-than-expected second-quarter profits and revenue, as well as providing a positive outlook. Conversely, shares in Broadcom shares are falling following the release of its latest quarterly results, with the company issuing disappointing revenue forecasts for the fourth fiscal quarter.
Lottomatica rebounds in Milan, luxury sector falls
Turning to the equity market, the biggest gainers on the Milan FTSE MIB index include Stellantis (+4.2 per cent) and Azimut (+2.8 per cent), thanks to a positive report from Deutsche Bank, which raised its rating from ‘hold’ to ‘buy’ and its target price from 35 to 46 euros. St closed higher (+0.7%) after a volatile session, as did Prysmian (+0.6%). Conversely, after a weak start to the session, Lottomatica (+5.8%) rebounded, having suffered losses the previous day following the announcement of its mega-merger with the Spanish firm Cirsa. At the other end of the main index, the defence sector was weak, with Leonardo down 1.4 per cent, whilst the luxury sector saw Cucinelli down 1.7 per cent and Moncler down 0.8 per cent.
