Stock markets: Europe sees a cautious rise as oil prices fall. All eyes on US inflation figures and Nvidia’s results
Brent crude continues to fall, well below $90 per barrel. Chipmakers are driving the Asian markets, whilst the countdown is on for the US chip giant’s quarterly results. All eyes are also on the personal consumption expenditure figures, with the consensus forecast predicting a stabilisation
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(Il Sole 24 Ore Radiocor) - A cautious rise for European stock markets, which are benefiting from the latest fall in oil prices. Investors are hoping that US economic sanctions against Iran will, on the one hand, ward off the spectre of military escalation and, on the other, help to normalise traffic through the Strait of Hormuz. Tehran has announced that it has resumed talks with Oman regarding a ‘temporary corridor’ for shipping. The market is also awaiting the publication of financial results from tech giant Nvidia this evening (Italian time), to assess the outlook for the technology sector and, in particular, artificial intelligence. Milan is up (FTSE MIB ), Paris (CAC 40 ), and Madrid (IBEX 35), with Frankfurt (DAX 40) London (FTSE 100).
On the macroeconomic front, the July PCE figure, the Fed’s benchmark measure of inflation, is due to be released later today. The consensus forecast is for the core figure to stabilise at 3.3 per cent year-on-year and for the headline figure to slow slightly to 3.6 per cent from 3.7 per cent, partly in light of the latest PPI data, which had shown a mixed trend across the components included in its calculation. An easing of inflationary pressures was also evident in the latest July inflation figures. “A figure well above expectations,” note the experts at MPS, “could prompt the Fed to adopt a more restrictive stance.”
On the Milan Stock Exchange, the focus remains on the banking crisis
Among Milan-listed shares, the banking sector remains in the spotlight, after the board of directors of Banco Bpm had shown little enthusiasm for the public offer launched by Banca Monte Paschi Siena, and the Ministry of the Economy explained that it had ‘frozen’ its stake in Rocca Salibeni. The fall in crude oil prices is holding back Eni , the worst performer. Other oil companies are also weak, with Saipem, Snam and Tenaris, as well as Leonardo. On the other hand, buy shares in A2a, Azimut and Brunello Cucinelli.
Oil and gas prices fall; all eyes on the Iran-Oman agreement on the Strait of Hormuz
On the energy front, as mentioned, oil prices were falling, whilst Iran and Oman were discussing an ‘interim framework’ aimed at resuming shipments through the Strait of Hormuz. Specifically, the October WTI futures contract fell by 1.86 per cent to $80.33 per barrel, whilst the Brent contract for the same expiry date fell by 1.84 per cent to $86.95. Overall, this week’s 8.5 per cent fall in crude oil prices has eased inflation fears, helping government bonds to rise. Natural gas prices are also falling, with prices on the TTF platform in Amsterdam, where it fell by 5.4 per cent to 63 euros per megawatt-hour.
Euro/dollar little changed, gold falls
In the foreign exchange market, the euro/dollar rate remained largely unchanged at 1.1667, down from 1.1670 at Tuesday’s close. The single currency is also trading at 185.49 yen (down from 185.90), whilst the dollar/yen exchange rate stands at 159.05 (down from 159.26). Gold fell by 0.3 per cent to $4,645 an ounce, whilst Bitcoin remains around $79,000.
