Stock exchange, Wall Street closes mixed. Europe's recovery fades. Milan down with utilities knocked out

(Il Sole 24 Ore Radiocor) - Stock markets deflated and hung with uncertainty with Wall Street failing to maintain the pace of previous sessions. The Ftse Mib closed down 0.35% weighed down by utilities, Ferrari and Leonardo. Madrid was heavy, with a drop close to one percentage point, while Paris and Frankfurt were in line with Milan. Investors remain on the lookout for direction and continue to question the next moves by central banks with eyes on the upcoming ECB meeting next Thursday and incoming macro data. Across the Atlantic, as the US quarterly earnings season continues, traders are no longer convinced of a first rate cut in March (possibility given at 42.4% - according to the Cme FedWatch Tool - against 63.1% a week ago). On the other side of the Atlantic the BoJ confirmed its 'zero rate' policy.

Indices contrasted on Wall Street after a second day of record highs on Monday 22 January for the Dow Jones and S&P 500. At the close, the Dow Jones lost 0.25 per cent to 37,906.04 points, the Nasdaq rose 0.43 per cent to 15,425.95 points, and the S&P 500 advanced 0.29 per cent to 4,864.60 points.

The week offers some interesting data, such as the preliminary GDP reading for the fourth quarter (Thursday) and personal incomes and consumer spending for December, including the Pce inflation figure (Friday), which will give further guidance to the Fed ahead of rate decisions. Investors then follow the release of an iimportant series of quarterly reports. Verizon Communications is up sharply after posting a net loss of $2.7 billion in the fourth quarter. On an adjusted basis, however, earnings per share came in at $1.08, above expectations ($1.07). Also up was Procter & Gamble, after reporting earnings for its second fiscal quarter that exceeded analysts' expectations. The General Electric was down after the US industrial group reported fourth-quarter earnings per share of $1.44, down from $1.53 in fiscal 2022, weighed down by lower-than-expected first-quarter guidance. Worst sell-off in five years for 3M, after the US group ended the fourth quarter with net profit almost doubling but disappointed the market with its forecast for 2024.

It was a day of selling at Piazza Affari for utility stocks, in the aftermath of the release of Terna's data, according to which, in 2023, Italian electricity consumption decreased by 2.8% compared to 2022, reaching 306.1 billion kWh. Equita analysts point out that falling electricity demand is a negative element for the system and for the entire utility segment, with post-crisis Ukraine energy savings having a greater impact in the last two years than electrification. Thus, A2A and Hera scored the worst performances of the day. Saipem (+2.85%) rose to the top after speculation that the maxi liquefied natural gas (LNG) project in Mozambique may finally be restarted. The contract with TotalEnergies in the African country was terminated in 2021 due to the lack of safety conditions in the area. Purchases are back on Campari (+2.4%), after the analysts' promotion, which allows the spirits group's share price to change course after four negative sessions. Purchases also on Stmicroelectronics (+1.84%), Diasorin (+1.11%) and Tim (+1.01%).

On the currency front, the euro cannot hold the 1.09 dollar mark and is again losing ground against the greenback. The euro/dollar thus continues in a rather narrow trading range: "The reason for this," say ActivTrades analysts, "is related to the continuing uncertainty surrounding international tensions, which support the dollar as a safe haven asset, while on other markets, this latent tension is less noticeable. On the other hand, the ten is strengthening, after Governor Ueda's words that he was more confident about reaching the price target set by the BoJ, supporting the prevailing view among economists of the end of the era of negative rates, presumably in the spring, Mps analysts note.