Stock exchanges, US-Iran tensions weigh on Hormuz. Milan (+0.3%) holds with St. Louis, Tesla slides on Wall Street

(Il Sole 24 Ore Radiocor) - The tug-of-war between the United States and Iran over control of the Strait of Hormuz and the stalemate in the negotiations weigh on the markets. Oil, after a brief slowdown, returned to rally while European stock exchanges closed lower and Wall Street was weak, with Tesla's slide. The only exceptions were Milan (+0.26%) and Paris (+0.9%), which benefited from the post-accounts sprint of St. Louis (+14%). On the Parisian list, L'Oreal also ran after the accounts, while EssilorLuxottica closed down over 4%. Madrid (-0.8%), Amsterdam (-0.7%), Frankfurt (-0.3%) and London (-0.2%) fared worse. Still on the quarterly front, Nestlé (+5.9%) in Zurich and Nokia (6%) in Helsinki were rewarded, boosted by the prospects for AI.

Meanwhile, the European economy is beginning to show the effects of the conflict: the April Pmi's - expected precisely because they record the first phase of the war - show that European economic activity has entered a contraction (Pmi at 17-month lows), mainly due to services. Manufacturing, on the other hand, continued to expand. Better news came from the US, where data came in higher than expected (with the PMI recording its best figure in 47 months).

The US stock exchanges moved weak, after the S&P and Nasdaq hit record levels on the eve of the event. Investor sentiment has been bolstered in recent days by a very positive earnings season so far. Of the 87 companies in the S&P index that released their results, 81% reported higher-than-expected earnings and 76% reported higher-than-expected revenues. Tesla's much-anticipatedquarterly earnings report - which kicked off the 'Magnificent 7' accounts presentation - initially brought a sigh of relief after higher-than-expected profits and positive free cash flow. However, Tesla executives have since announced that CEO Elon Musk has much bigger and more expensive ambitions. It is a reminder, writes the New York Times, that, at both Tesla and SpaceX, investing in a Musk-owned company means tackling ambitious projects that could take years and billions of dollars to fund. The company plans to invest $25 billion this year in capital expenditures to fund its research into artificial intelligence, humanoid robots and more. This is expected to push Tesla's free cash flow into negative territory, Vaibhav Taneja, the company's CFO, told analysts. Lower-than-expected quarters, then, forIbm and ServiceNow.

At Piazza Affari, Stmicroelectronics (+14%) had a great session after the three-month numbers beat expectations on the revenue front and with forecasts that exceeded consensus estimates. Purchases on oil stocks (+1.2% Eni, +1.14% Tenaris, +1.17% Saipem), on Lottomatica (+2%) and on energy stocks with Snam (+1.61%) and Eni (+1.2%). Stellantis - after European registrations better than the context in the quarter - slowed towards the end and closed down 1.5 per cent. Banks were weak, with only Mediobanca (+0.8%) and Mps (+0.2%) closing higher. Generali (+0.8%) closed on a positive note on the day of the shareholders' meeting, with Unicredit (-1.9%) strengthening its capital to 8.7% of the Lion of Trieste. At the back of the pack was Diasorin (-4.2%), after the French company Biomérieux cut its forecasts due to a less intense flu season and uncertainties linked to the geopolitical context. Amplifon (-2.7%) also fell and Moncler (-2%) continued to sell.

On the currency side, the rise in oil prices and the uncertainty linked to the diplomatic standoff in the Middle East continued to favour the dollar, which strengthened and remained close to 1.17 against the euro. Among precious metals, gold fell back, penalised by fears of rising inflationary pressure and a possible rate hike by central banks, dropping below USD 4,700 an ounce.