Stock markets: focus in Milan on the MPS board meeting tomorrow. Moderna soars on the back of its melanoma vaccine

(Il Sole 24 Ore Radiocor) - A cautious session for European stock markets, as investors assess the impact of the rise in sovereign bond yields, whilst a fresh wave of selling in tech shares is once again fuelling recurring concerns about a bubble. On the first front, the US Treasury announced that it will at least double the scale of its buyback operations designed to support the liquidity of longer-dated nominal bonds. Following the announcement, Treasury yields immediately fell sharply, having risen on Tuesday to a 20-year high of 5.3371 per cent. The FTSE MIB in Milan is thus trading close to parity, in line with the other major European indices.

On the geopolitical front, there remains concern over tensions in the Middle East, where there are fears of a further escalation : US President Donald Trump has stated that no talks with Iran are currently taking place, nor are any planned. The US President has also described the Strait of Hormuz as ‘new US territory’, whilst, according to the Financial Times, Tehran is reportedly prepared to strike US military targets even in Europe.

Wall Street is trading higher, with slight gains across the main indices. Investors are awaiting, this evening, the publication of the minutes of the Federal Reserve’s latest meeting, from which they hope to gain clarity on the central bank’s intentions regarding interest rates, particularly now that inflationary fears have been reignited due to rising energy prices. On the corporate front, shares in Moderna shares soared from the very start of trading after an experimental melanoma vaccine developed with Merck (up around 10 per cent) showed positive results in a late-stage trial involving over 1,100 patients. On the other hand, tech stocks linked to OpenAI are under scrutiny. The Wall Street Journal reported, citing sources, that the company’s second-quarter results, whilst showing an 18 per cent increase in revenue compared with the first quarter, revealed rising losses.

On the Milan stock exchange, all eyes are also on the key players in the banking crisis: According to an article in *Il Sole 24 Ore*, written by editor-in-chief Fabio Tamburini, the CEO of Banca Monte Paschi Siena, Luigi Lovaglio, may present two extraordinary transactions to the bank’s board of directors in order to counter the OPAS launched by Intesa Sanpaolo on Rocca Salimbeni. These consist of a public offer for Banco Bpm and one on Banca Generali. The MPS board of directors has been convened for tomorrow.

“In our view, the strategic alternatives under consideration involve a significantly higher level of complexity and execution risk than Intesa’s offer,” comment the analysts at Equita. In particular, MPS ‘would find itself having to manage, in parallel, the completion of the integration of Mediobanca and further large-scale transactions, significantly increasing the execution risk compared with that associated with Intesa’s offer’, all the more so given that “the success of these transactions would depend on the involvement and consent of key parties, including Crédit Agricole, Generali and MPS’s major shareholders, as well as on obtaining multiple regulatory approvals and overcoming the constraints arising from the passivity rule”.