July 1, 2022

Hardwood Paroxysm

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Sales rain on stock exchanges as inflation in the European Central Bank and the United States soar to the top since 1981. For Milan, the week closes at -6.7%

(Il Sole 24 Ore Radiocor) – Black Friday of European stock exchanges puts pressure on the weekly balance and increases the negative performance of the indices compared to last Friday. In the eighth major event with the European Central Bank and US inflation, the Ftse Mib lost 6.7%, the Dax40 in Frankfurt 4.8%, the Cac40 in Paris 4.6%, the Ibex35 in Madrid 3.8%, the Ftse100 in London 2.9% and the Aex in Amsterdam 2.7% . At the sector level, in Europe, mainly banks (-6%) and financial services (-5.9%) pay customs duties per sales week for all sectors. In Milan, among the Ftse Mib titles, not one closed an octave with a positive performance. The worst were Finecobank (-13.7%), Banco Bpm (-13.4%), Saipem (-12.8%) Banca Generali (-12.5%) and Tim (-11.5%).

Friday Sales for Europe, Milan -5.2%

The last session of the week ended with a significant decline of European stock exchanges In the wake of the European Central Bank and on the day of US inflation, which rose to its highest levels since 1981. Strong sales in the banking sector affected Milan, the black shirt, with the Ftse Mib index losing 5.17%, also pushing the widening of the spread between BTp and Bund and reaching the lowest levels since last March. In Paris the Cac40 is down 2.69% and in Frankfurt the Dax40 is down 3.08%. Sales kicked in early in the morning following yesterday’s announcement by the European Central Bank, which announced two rate hikes in July and September, seemed unwilling to immediately launch anti-proliferation plans and cut growth estimates for 2022 and 2023, raising inflation rates. Specifically, regarding consumer prices, in May in the US, the index rose 1% month over month and 8.6% year-over-year, above expectations and at the top since December 1981. Again on the macro front, June data (preliminary) ) US consumer confidence turned out to be the lowest ever recorded, with 50.2 points — mainly due to inflation — compared only with the recession in the mid-1980s, according to the University of Michigan.

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Wall Street is falling, inflation is rising more than estimates

Down Wall Street, after CPI release: The figure rose 8.6% in May, while analysts expected an 8.2% increase, with the “core” figure – net food and energy prices – increasing 6% versus estimates of 5.9%. Thursday, the worst session in the past three weeks on Wall Street, as the day was marked by the decisions of the European Central Bank and the increase in the number of applications for unemployment benefits in the United States, which reached its highest levels since January; European Central Bank decisions then pushed US Treasury yields higher, adding pressure on indicators.

In Milan, a rain of achievements on Bieber after the 2025 plan

In Milan a session of passion for bankers, driving them down Pepper (-12.92%) which paid for the negative day of the sector and the achievements after the presentation of the plan to 2025. Also strong weakness for the sector. Banco Bpm (-12.05%). Among the key figures are projected net profit of 800 million in 2025 and 640 million in 2024 from 384 million recurring in 2021, revenue to 4.37 billion (from 3.38) with growth both on interest margin (to 2 billion from 1, 5) and above Commissions (at 2.2 billion from 1.6), and operating costs 2.5 billion (from 2.1), with Cet1 over 13%. The plan also provides for “extraordinary transactions, aimed at further strengthening the competitive position at the national level and ensuring greater focus on the core activities of the group, as well as through the sale and deconsolidation of non-strategic assets that will allow freeing up of capital from more than 500 million to be allocated to business development” .

Sales to banks and asset management limit Ferrari damage

In a session in which all European bankers underwent a sale (-4.96% sub-index Stoxx 600 banks), in Milan Unicredit lost 9.1%, Intesa Sanpaolo 7.38% and Mediobanca 6.59 against a hundred. In Europe, Deutsche Bank is down 5.85% in Frankfurt, Societe Generale is down 6.15% in Paris and Credit Agricole is down 5.91%, while BBVA is down in Madrid by 9.13%. Returning to Milan, Asset Management Securities also suffered from strong sales in Ftse Mib: Finecobank -9.47%, Azimut -9.08%, Banca Generali -8.3% with Banca Mediolanum -6.81%. Unipol (-8.2%), the largest shareholder in Bper, and Nexi (-6.93%) were also harmful to financial firms. Energy and utilities stocks were also not spared from the sell-off: Saipem lost 7.97%, Hera 7.18% and A2A 6.57%, when Eni left the five on the ground, 6% and Enel 4.33%. On the industrial front, Iveco Group posted another sales session (-7.35%) with Tim -6.65%. Atlantia identified damage (-0.27%), followed by Ferrari (-1.61%), which next week presents its new business plan, when CEO Benedetto Vigna must also clarify Maranello’s new strategy on electrification.