Stock markets: Milan up 3% in a week. The rally towards record highs resumes, driven by the defence sector
Frankfurt is in the lead thanks to Merz’s major tax-cut plan. The tech sector continues to see sharp fluctuations. The market is pricing in a rate rise by the Fed, following the slowdown in US employment in June. Positive signs from the Middle East have pushed oil prices back to a four-month low
(Il Sole 24 Ore Radiocor) - Investors are in ‘risk-on’ mode in a week still marked by sharp fluctuations in the tech sector but also by the central bank summit in Sintra, with Fed Chairman Kevin Warsh making his first appearance outside the US, whilst, fears of an imminent rise in US interest rates are easing, following the slowdown in the US labour market in June. There are also positive signs on the Middle East front, with progress in the talks between Saudi Arabia and Iran in Doha bringing oil prices back to four-month lows.
Against this backdrop, Piazza Affari has recouped the losses of the previous week (which closed down 3 per cent), posting a 3 per cent rebound, with the FTSE MIB coming within a whisker of its all-time high in the final trading session. The top performer was Frankfurt (+4.6%), which set a new all-time high, also benefiting from the massive tax cut plan announced by the Merz government. Madrid rose (+2.2%), whilst Paris gained +1.5% and London +1.6 per cent. The Euro Stoxx 600 also hit a new all-time high on Friday, with a weekly gain of 2.7 per cent.Buying was concentrated in the industrials sector (+5.6% for the Stoxx 600 sector index), financial services (+4.6%) and banking (+3.7%).
Defence and Aerospace take centre stage on the Milan Stock Exchange
On the Milan stock exchange, Leonardo (+13.6%) and Avio (+13.4%) stand out among the blue chips, with the defence and aerospace sectors remaining in the spotlight (Rheinmetall is also up in Frankfurt at +15.5%). Unipol (+10.2%), Amplifon (+9.9%) and Fincantieri (+9.7%) are also in the spotlight. It has been a difficult week for Tenaris (-4%), Italgas (-2.1%) and Stellantis (-1.8%).
Oil hits 4-month low, but the fall slows ahead of the OPEC+ meeting
On the energy front, oil prices are weak ahead of the OPEC+ meeting on Sunday 5 July. Meanwhile, however, following the sharp sell-off the previous week, Brent futures fell by 1.5% over the past week (from -10.7%), whilst WTI remained largely unchanged (-0.8%). Gas prices in Amsterdam rose sharply by 8.9 per cent. On the currency markets, the euro/dollar exchange rate was largely unchanged (+0.5 per cent).
Spread closes unchanged at 78 points on Friday, 10-year yield rises to 3.71%
The spread between BTp and Bund bonds closed unchanged. At the close of trading, the yield spread between the benchmark 10-year BTp and the German Bund of the same maturity stood at 78 basis points, the same as Thursday’s close. By contrast, the yield on the benchmark 10-year BTp rose, ending the session at 3.71%, up from 3.68% in the previous session.
