Stock market: Fed tightening on the horizon, but Europe is bouncing back, with Milan (+1.36 per cent) leading the way
US inflation in line with forecasts. Intesa and MPS stand out
(Il Sole 24 Ore Radiocor) - Calm returns in the final trading session of the week on the European stock markets, which closed higher on a day dominated by US inflation and the prospect of an imminent Fed rate rise. Consumer prices in the United States rose by 3.4 per cent year-on-year and 0.4 per cent month-on-month in August, in line with expectations, whilst the monthly core figure (0.3 per cent) exceeded forecasts by one-tenth of a percentage point. These figures reinforce expectations of a 25-basis-point rate hike by the Fed – now 90% likely according to the CME FedWatch for next week’s meeting – whilst the market has already priced in two hikes by the end of the year. “The Fed is lagging behind the economy,” says David Rees of Schroders Plc, who believes the central bank “can choose between raising rates next week and a controlled rise in short-term borrowing costs, or doing nothing and risking an uncontrolled rise in long-term borrowing costs”. Treasuries remain under scrutiny, with the 10-year yield edging close to 5 per cent.
The overall picture did not affect European equities, which were buoyed by the fall in crude oil prices (Brent down 3.1 per cent to $104.3 per barrel, WTI down 3.4 per cent to $99 per barrel) and the rebound on Wall Street. Milan closed at 52,512 points (+1.36 per cent), the best performer among the continent’s stock markets.
On the Milan Stock Exchange, Avio is leading the way (+3.9 per cent), following the publication of half-year results that saw the group return to profit and after confirmation of Advent’s stake in the company. Stellantis (+2.7%) and Prysmian (+2.9%) are also performing well, in a trading session that has favoured banking stocks: MPS (+2.4 per cent) and Intesa (+2.5 per cent) are shining after the latter’s shareholders’ meeting yesterday gave the green light to a capital increase for the public takeover bid for Siena, and against a backdrop of interest rates that are more favourable to the sector.
The TTF gas price in Amsterdam is down 3 per cent at 79.5 euros per MWh. In the foreign exchange market, the euro is trading at 1.1604 dollars (down from 1.1609 the previous day). The single currency is also worth 178.2 yen (down from 179.1), whilst the dollar has fallen to 153.6 yen (down from 154.3), with the Japanese currency buoyed by rumours of a rate rise by the Bank of Japan.
