Stock market: Slowdown in US inflation not enough; Milan closes down 0.84 per cent as banks and Generali fall
The BTP-Bund spread rises above 100 points
(Il Sole 24 Ore Radiocor) - The slowdown in US inflation is not enough to boost European markets, where high prices continue to take their toll. Milan closed down 0.84 per cent, falling back below 52,000 points in the final trading session of the month and the quarter, characterised by selling across all the major European stock markets. It is a different story for now on Wall Street (with the S&P, Nasdaq and Dow Jones all up), which may benefit from the slowdown in the consumer price index in August (to 3.4 per cent from the expected 3.7 per cent and the same as the previous month). This reduces the likelihood of a monetary tightening by the Fed in October: according to the CME Group’s FedWatch Tool, market participants now see a 47 per cent probability of a quarter-point interest rate rise next month, down from 51 per cent yesterday and 71 per cent a week ago. Bond yields are also falling, with the 10-year Treasury yield dropping from its highest level since 2007, although it has since risen back above 5.27 per cent. Bond markets remain under pressure and are set to close out their worst month in recent years. In Europe, the spread between BTPs and Bunds closed above 100 basis points, at its highest level since May 2025.
Looking at the Milan stock market, selling pressure is weighing on the banking sector (-2% for BPM, -1.6% for Intesa, -1.4% for MPS) as investors await further developments in the sector’s turmoil. Generali is also down (-1.75%) on the day of the board meeting to discuss the integration of Allianz. TIM is the worst performer (-2.6%). Technoprobe remains at the top of the FTSE MIB (+2.17%), whilst the sector centred on chips and AI awaits data from US giant Micron. ST, on the other hand, is weak (-0.34%). Buying was seen in Banca Mediolanum (+1.74%) and Fineco (+0.6%), with JP Morgan resuming coverage of the shares with an ‘overweight’ rating. Outside the main index, Juventus plummeted (-8.85 per cent) following the announcement of its fourth capital increase since 2019. BFF Bank was in the spotlight (+2.65%) following an agreement with an investment fund to sell certain receivables from the public sector in Italia and Spain, worth approximately 127 million.
On the energy front, oil prices are rising, with the November Brent futures contract at $103.73 per barrel (+1 per cent) and the WTI futures contract for the same month at $91.40 (+2.3 per cent). Natural gas has risen above 72 euros per megawatt-hour (+3%).
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