EU stock markets weak; Lottomatica down in Milan following a major merger in Spain
The rise in government bond yields is weighing on the markets. Oil prices are falling but remain at high levels, with Brent at around $94 a barrel and WTI below $90. Gas prices are rising, exceeding €72 per megawatt-hour
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(Il Sole 24 Ore Radiocor)- European stock markets European stock markets , with the market keeping a close eye on the price of oil – which remains high despite having turned negative – and the sales of government bonds which are fuelling the surge in yields to decade-highs. The resumption of clashes in the Strait of Hormuz has, in fact, reignited fears of inflation and of interest rate hikes, leading to a rise in global borrowing costs for both public finances and businesses.
Thus, the FTSE MIB in Milan is trading in the red; the same is true of the CAC 40 in Paris and the DAX 40 in Frankfurt.
Mixed futures on Wall Street
Futures on Wall Street are trading mixed, whilst anticipation remains high for the data on the US labour market due on Friday 4 September, which will also be significant from an interest rate perspective. Meanwhile, employment in the US private sector posted a positive figure in August, though it fell short of experts’ expectations. The market is also keeping an eye on yields on 10-year US Treasuries, which have reached a high not seen since November 2023.Meanwhile, US Secretary of Commerce Howard Lutnick told CNBC that the Trump administration is working on a tariff framework for semiconductors and that all companies are aware of this.
Amplifon performs well on the Milan Stock Exchange
On the main Milan stock exchange, oil shares are holding back the rally, with oil prices turning negative: they are therefore down Eni, Tenaris and Saipem . Good news for Amplifon is performing well, with Morgan Stanley initiating coverage with an ‘overweight’ rating and a target price of €14.9. Buying interest in technology stocks, with Stmicroelectronics and Prysmian were among the best performers on the market. Down Stellantis following the release of August registration figures the previous day.
Lottomatica takes a hit, but analysts back the merger with Cirsa
Lottomatica Group hit by selling pressure on the Milan Stock Exchange following the announcement of the major merger with the Spanish company Cirsa, which, by contrast, is soaring in Madrid. The deal creates the world’s second-largest listed operator in gaming and sports betting , “with a leading position in Italia and Spain and a pro forma adjusted EBITDA of around 2 billion”. Despite the market’s reaction, the deal has been welcomed by analysts. “We view the deal positively,” commented Intermonte. “The agreement appears to us to be well-structured from a financial perspective and consistent with Lottomatica’s track record in capital allocation.” Cirsa, in fact, “is being acquired at a lower multiple than that at which Lottomatica trades, making the deal intrinsically accretive to earnings and cash flow per share”.
