Stock market: Europe passes the Warsaw test unscathed; Milan up 0.7 per cent, led by BPER and Unipol
The Modena-based bank posted a 2.2 per cent rise, whilst Bologna recorded a 1.2 per cent rise
(Il Sole 24 Ore Radiocor) - Warsh, the ‘half-hawk’, does not disappoint the markets. Thus, whilst Wall Street is trading higher, European stock markets are closing on a calm note, with Milan up 0.67 per cent in today’s session. The final trading day of the week was marked by the quarterly results of tech giant Nvidia and monetary policy developments.
Wednesday’s US PCE data have, in fact, brought fears of persistently high US prices back into the spotlight and, by extension, concerns about a possible further tightening of interest rates by the Fed. These concerns were, however, only partially confirmed by Chairman Kevin Warsh’s speech today at the Jackson Hole symposium. The central banker, appointed by President Trump with the implicit aim of lowering interest rates, described inflation as “worrying” and reiterated the goal of bringing it back close to the 2 per cent target, saying that “there is still work to be done”. Despite this, he did not give anything away regarding the possibility of a rate rise in September, let alone the central bank’s future moves. “I am here today to fulfil a commitment, not to make a decision.” These remarks have, however, raised – albeit only slightly – expectations of a rise in interest rates, to the extent that, according to the CME Group’s FedWatch Tool, traders’ bets for next month have risen to over 40 per cent from 35.4 per cent yesterday.
"Warsh is giving the market what it wants, to a certain extent," explains Oliver Pursche of the asset management firm Wealthspire Advisors – “He acknowledges that inflation is a persistent problem, but remains reluctant to go out on a limb in predicting what the Fed might or might not do in the future. That’s the best we can expect from him.”
Turning to the equity market, Lottmatica (+2.32 per cent) is leading the gains, whilst the defence sector is lagging behind, starting with Leonardo (-3.96 per cent). The risk game remains in the spotlight: Unipol is up (+1.24%) after its chairman, Carlo Cimbri, emphasised in an interview with *Il Sole 24 Ore*, amongst other things,
