Stock markets remain cautious, with attention focused on tech and Iran. Gold slips below $4,000
Oil prices fall sharply, with WTI below $70.
by Eleonora Micheli and Giorgia Colucci
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(Il Sole 24 Ore Radiocor) - European stock markets are trading cautiously, whilst concerns remain over the valuations of tech companies. The sector is set for a recovery today, with Nasdaq futures up by around half a percentage point. Meanwhile, anticipation is building ahead of Micron’s quarterly results, which will be unveiled after the markets close and could provide important insights into the future of the chip and tech sectors. Meanwhile, the Middle East remains under scrutiny, whilst negotiations between the United States and Iran continue in a bid to reach a peace agreement.
In this context, the FTSE MIB in Milan is down, against a mixed backdrop across the continent. By contrast, Wall Street is trading higher following the previous day’s tech sell-off. Among commodities, gold has slipped to an eight-month low below $4,000 an ounce, whilst oil has fallen below $70 a barrel.
Spotlight on the banks, oil shares fall
On the Milan Stock Exchange, Poste Italiane is in the spotlight, buoyed by a positive rating from Barclays and in the wake of Telecom Italia . Banks are once again in the spotlight, particularly following the news that emerged yesterday. The chief executive of Banca Monte Paschi Siena , Luigi Lovaglio, has stated that the bank will evaluate all the options on the table, seeking to guarantee the institution’s independence. Andrea Orcel, CEO of Unicredit , said that in Italia the group will remain on the sidelines as a spectator, whilst continuing its campaign to take over Commerzbank , over which it is edging ever closer to gaining control. Following yesterday’s slump, Stmicroelectronics and Prysmian remain under the investors’ microscope. The defence sector is under pressure, with Avio and Leonardo , dragged down by the slump in Rheinmetall following the German government’s decision to halt the construction of six frigates. Oil stocks are also down.
WTI crude oil below $70, euro below 1.14
On the energy front, oil prices are falling sharply: the August WTI futures contract has fallen below $70 a barrel and is now down 4.3% at $70.04, whilst the Brent contract for the same expiry date is down 4.39% at $73.70.
On the foreign exchange front, the US dollar continues to strengthen: the euro remains below the 1.14 dollar mark (1.1380 at the previous close). The spread is also flat. The yield spread between the benchmark 10-year BTp and the German Bund of the same maturity stands at 72 basis points, the same level as yesterday’s close. The yield on the benchmark 10-year BTp, however, is down slightly.
