Stock exchanges optimistic on the eve of the ECB, Nvidia a record. Bank of Canada cuts rates

(Il Sole 24 Ore Radiocor) -Eve of optimism for the European stock exchanges that all closed on an upward trend and await Thursday 6 June for the first rate cut by the ECB. A first cut in the cost of money, now taken for granted by the markets, which comes almost two years after the Eurotower's first hike in July 2022 to tame the inflation. Now comes the expected change of course, with traders betting on an initial 25 basis points reduction and already questioning the extent of the ECB's next cuts in the second half of the year. Supporting this scenario came the Bank of Canada, which cut rates (by 25 points), becoming the first central bank in the group of G7 countries to do so. And it bodes well for the slowdown in US employment, which could push the Fed to bring forward the decline in the cost of money in the US as well.

Wall Street closed positive. The Dow Jones climbed 0.25 per cent to 38,807.56 points, the Nasdaq advanced 1.90 per cent to 17,177.25 points, and the S&P 500 gained 0.25 per cent to 5,352.21 points. Nasdaq rallied as hopes of a rate cut were rekindled by the Fed, whose Fomc is scheduled to meet next week, when it is expected to announce the status quo on rates. For the rest of the year, after the recent light-and-shady US data, observers have returned to the hypothesis that a cut in the cost of money will also be implemented in the States: after job vacancies fared worse than expected, the Adp data on the US private sector showed a slowdown, with a lower-than-expected figure, a further sign of the cooling of the labour market (152,000 jobs were created compared to the previous month, forecasts were for 175,000). These numbers were expected, foreshadowing the trend of Friday's general labour market figure. On the other hand, the Ism service sector index, which returned to expansion in May, exceeded expectations. The index rose from 49.4 to 53.8 points, with expectations for a figure of 50.7.

On the stock market, the rally of Nvidia continued, touching new records by surpassing the threshold of $3 trillion, the third largest company in the world by capitalisation. CrowdStrike stock surged after the cybersecurity company reported a better-than-expected quarterly earnings report and offered solid guidance for the second quarter. CrowdStrike posted adjusted earnings per share of 93 cents, compared to 89 cents for the consensus, on revenues of 921 million, compared to 905 million for the estimates. Purchases also on Hewlett Packard Enterprise, after adjusted quarterly earnings of 42 cents on revenues of 7.2 billion, against expectations for 39 cents on 6.82 billion. Taiwan Semiconductor Manufacturing (Tsmc) did well after unveiling a new generation of chips, prompting Barclays to raise its price target.

At Piazza Affari, the Ftse Mib index ended the session gaining 0.7% (but after having touched over +1%). St. St. runs (+3.2%) pushed by Nvidia's rally on Wall Street where it is now approaching the 3 trillion dollar capitalisation. Purchases on Nexi (+2.4%) and among banks Mps (+1.8%).

A weak session, instead, for the other credit biggies, from Popolare di Sondrio (-1.8%) to Banco Bpm (-1.1%). The worst was Tim (-2.2%) with Equita limiting its target price, while the network dossier continued with Fastweb selling its 4.5% stake in FiberCop to the Kkr fund for EUR 438.7m. Outside the main list, a jump for Mfe A (+4%) after positive estimates on advertising in the first half of the year.