Uncertainty on interest rates weighs on EU stock exchanges, in Milan (-0.2%) Ferrari flies with Hamilton

(Il Sole 24 Ore Radiocor) - The European stocks ended the session almost all in the red, weighed down by uncertainty over rates. On the eve of the meeting, theFed left them unchanged, as expected, at 5.25%-5.50% and was cautious about the timing of future monetary policy easing. In fact, US Central Bank President Jerome Powell emphasised that interest rate cuts are not imminent and that there will be no reduction until there is "greater confidence" that inflation will fall towards the 2% target. Thus, the assumption of a March cut in the cost of money is receding, and we are beginning to think about May-June. Even the Bank of England, as expected, decided to leave rates unchanged at 5.25%, but experienced an internal rift at the time of the vote. Meanwhile, inflation in the eurozone has fallen again. In January, the annual rate was 2.8%, in December it was 2.9%, while in Brussels, the European Council reached an agreement in extremis between the 27 member states on the EU budget and aid to Ukraine.

Against this background, almost all European stock markets closed in the red. Milan's Ftse Mib ended -0.2%, while the Cac 40 in Paris was the black jersey (-0.9%). Also negative were Frankfurt's Dax (-0.3%), London's Ftse 100 (-0.1%) and Madrid's Ibex (-0.6%), while Amsterdam's Aex resisted (+0.5%).

Wall Street closed positive. The Dow Jones rose 0.97% to 38,519.84 points, the Nasdaq gained 1.30% 15,361.64 points and the S&P 500 advanced 1.25% to 4906.19 points. On the Nasdaq, in particular, weighed Alphabet Class A , Microsoft Corp and Advanced Micro Devices, coming off the back of quarterly reports. Also of note was Citi's rating cut on Qualcomm, due to lower-than-expected guidance. On the macro front came mixed news: unemployment claims rose by 9,000 to 224,000 in the week ending 27 January, above expectations. On the other hand, the labour costs rose less than expected, by 3.2 per cent compared to the previous three months, against the initially estimated 2.5 per cent.

Turning to the individual stocks at Piazza Affari, Ferrari (+9%) took the lead after the accounts, with 2023 earnings above EUR 1bn and with rumours of Lewis Hamilton joining the Maranello team. Also worth mentioning is the performance of Tim (-0.25%), which late in the evening of Wednesday 31 January received from the Mef the proposal for the purchase of Sparkle. Interpump (+2.6%), Stellantis (+1.3%) and Iveco (+0.4%) ran. Banks and utilities were at the bottom of the list, with Enel (-2.2%) weak after Jefferies cut its share price to hold and its target price to EUR 6.5 from EUR 7. Black jersey for Hera (-3.2%) and Mps (3.4%).

The dollar strengthened in the aftermath of the Fed meeting and pushed the euro to new lows since mid-December. Europe's single currency hit an intraday low of 1.0779 against the dollar, its lowest level since 12 December (1.0762), before recovering ground and returning to $1.085. Based on the statements made on the eve of the meeting, "the Fed is not in a hurry to cut rates, as was expected, and on the currency side this has allowed the dollar to recover ground," note analysts at Unicredit, who nevertheless expect the euro/dollar to hover in the 1.08 area while waiting for the US unemployment numbers on Friday, 2 February.