Listen to the audio version of the article
(Il Sole 24 Ore Radiocor) – The hopes for a rapid rate cut and the quarterly reporting season which is proceeding at full speed are driving the European stock markets, which all close the week on a positive note, returning to historic highs (in particular Frankfurt, Paris and London while Milan has been back at the top since 2008). The pink jersey is Frankfurt’s Dax (+4.2%), despite the weakness of the German automotive giants. Milan’s Ftse Mib gained 3.1%, confirming its best performance since the beginning of the year (+14.2% since January), behind Amsterdam. The Aex itself closed the eighth month up by 2.6%. On a similar level the Ftse 100 of London (+2.7%), the Ibex of Madrid (+2.3%) and the Cac of Paris (+3.3%).
In Piazza Affari, Nexi stands out (+11.5%) driven by better-than-expected accounts. Amplifon also performed well (+9.3%) together with European Health Care (+2.8%). The quarterly results also boosted Prysmian (+8.7%) in the wake of a positive industrial sector (+4.1% in the week). Among the sectors, the one that is experiencing the fastest growth is that of utilities, with Enel’s rally (+8.1%) in Milan. Mediobanca, also returning from positive accounts, instead collected 7.2%. Closing the week with a decline were instead Stellantis (-0.2%) and Ferrari (-6.2% and among the worst of the Euro Stoxx 50), penalized by the accounts but also by a general weakness in the automotive sector (-1, 9%). In Germany, Mercedes (-4.7%) and BMW (-0.9%) also finished lower. Luxury is also heavy in Milan, with Brunello Cucinelli losing 3% and Moncler 1.3%, while Bper (-0.9%) is affected by the market’s cold reception to the quarterly report. On the currency, the euro/dollar exchange rate was stable (+0.1%).
The quarterly reports dominate the last weekly session
The quarterly reports give impetus to the European stock markets which close the last session of a week with a good rise. The prices are driven by corporate profits on the one hand, and on the other by renewed hopes of an early start to the cycle of rate cuts by central banks, also thanks to the signals that emerged from the minutes of the ECB meeting in April. The FTSE MIB of Milan is thus the best in the Old Continent. The CAC 40 in Paris, the DAX 40 in Frankfurt, the AEX in Amsterdam, the IBEX 35 in Madrid and the FT-SE 100 in London also ended higher.
For ECB governors it is “plausible” to start cutting rates in June
The members of the ECB Governing Council considered it “plausible” that they would be in a position to “start easing monetary policy restrictions at their June meeting if further evidence received by then” confirmed the medium-term inflation outlook included in the March forecast. This is what emerges from the minutes of the April 10-11 meeting in Frankfurt, when some members indicated that they felt “quite confident” in a reduction in interest rates already at that same meeting. In this context, a very large majority of members agreed with chief economist Philip Lane’s proposal to keep the three main interest rates unchanged on that occasion. On the macroeconomic front, in Italy in March the seasonally adjusted index of industrial production fell by 0.5% compared to February.
Wall Street closes mixed
Wall Street closes mixed with fears of stagnation. The Dow Jones rises by 0.32% to 39,512.32 points, the Nasdaq loses 0.03% to 16,340.87 points while the S&P 500 advances by 0.16% to 5,222.67 points. Weekly unemployment claims have reached its highest level since August on Thursday, corroborating evidence from last week’s jobs report that the U.S. job market may finally be cooling. The labor market is central to the debate over when the Fed can start cutting interest rates and whether it will be able to engineer a soft landing — that is, contain inflation without triggering a recession. But caution remains. San Francisco Fed President Mary Daly said on Thursday there was “considerable” uncertainty about the direction U.S. inflation will take in the coming months, while Atlanta Federal Reserve President Raphael Bostic told Reuters today that the Fed is likely on track to cut rates this year, but warned that the timing and scope are uncertain and that further declines in inflation will come only slowly.