'Interpump is an Italian industrial excellence'
"The company has shown a virtuous growth path both organically and through acquisitions. Potential also for Reply and Leonardo'
3' min read
Key points
3' min read
Antonio Cesarano, Intermonte's chief global strategist, outlines the market scenario for the coming months, both from the point of view of interest rates with the Fed and ECB decisions and the analysis of possible overvalued sectors, without forgetting the influence of geopolitical variables on the dynamics of stock markets.
What are the variables that might influence the next monetary policy moves by the Fed and ECB?
On the ECB front, the path of rate cuts started in 2024 could in fact be considered concluded, barring a possible further downward adjustment of 25/50 bp, especially if the dollar were to cross the threshold of 1.20 vs. Eur. The strengthening of the euro could in fact penalise exports even more than tariffs. On the Fed front, the scenario is at least five to six cuts of 25bp each within a year, due to the weakening US labour market and a greater presence of Trump-appointed figures on the Fed board.
Despite geopolitical tensions, markets everywhere rose and some stock markets hit highs. Are we facing pockets of overvaluation?
Markets benefited from a number of factors, including rising expectations of a Fed rate cut, given indications of a slowdown in the labour market. For the technology sector, the softening of trade relations between the US and China was decisive, after the initial escalation that had led to the threat of rates well above 100%. Overvaluation fears remain, as China is accelerating domestic chip development and the technology sector in general could be subject to profit-taking, but the trend remains positive due to the growing impact of AI.
What are the prospects and expectations for the next six months? How to move at portfolio level?
The expectation is for a convergence of fiscal and monetary policies in an expansionary direction, with the One Big Beautiful Bill in the US and the German €1000 billion plan in the EU suggesting a favourable scenario for equities. The geopolitical backdrop is likely to remain overheated and gold and/or gold mining companies should be considered in portfolio choices, with Global Central Banks, particularly those of India and China, likely to increase reserves of the yellow metal.
