The last month has seen the markets tumbling badly. For S&P 500 and Dow Jones Industrial Average it was the worst month of September in the last 20 years. The European stock exchanges also suffered with almost -6% for Paris, while the Dax in Frankfurt stopped the bleeding at -5.6%.
Looking at the global equity index, the MSCI World, the negative balance in September was over -9%. In the first place, the increasingly aggressive footprint indicated by the company contributed to disturb the mood of investors Federal Reserve in its path of rising interest rates, together with growing fears of recession and worse than expected data on the inflation front. In this sense, in the Eurozone, the consumer price index reached double figures in September (+ 10% yoy).
We thus leave behind the negative third quarter in a row for world stock exchanges, an event that had not occurred since the great crisis of 2008/2009. On Wall Street the S&P 500 index which has lost 24.77% since the beginning of the year and the Nasdaq even 32.4%.
Reid tries to look at the glass as half full
There is currently so much negativity out there that it seems difficult to intercept even some arguments that appear to be favorable to the markets or economies. “Actually, perhaps a good thing is that EVERYTHING is getting cheaper,” he says Jim Reid, strategist at Deutsche Bank. “In fact – he continues – we come from the wake of one of the worst September, the worst quarters of the third quarter and the worst year-to-date of our careers in terms of the extent of declining assets”.
In September, only two of the 38 non-currency assets that Deutsche Bank normally monitors managed to post a positive return over the month. “The third quarter has been one of the worst since we started tracking all of these assets in our monthly review in 2007. Even if we go back a few decades, it will likely be hard to find a worse period for such a variety of assets,” Reid argues. who recalls how this happens after “practically everything has risen for 40 years along with extreme valuations; so (the current bearish movement) shouldn’t come as a big surprise now that the drivers have changed. “
The numbers of the Ftse Mib index: over the 9 months positive balance for only 4 stocks
The Ftse Mib ended the third quarter of the year with a week in the red (-1.98%) which marked the seventh negative month (-4.22% in September) of the year. Only in May and July did the Milanese guide index manage to dodge the sales and the YTD balance is -24.4%.
Among the individual securities, the marked weakness of Saipem (-86.23% YTD) was confirmed, followed by Telecom Italia (-56.17%) which in September updated its historical lows several times. Among the worst since the beginning of the year stand out Interpump (48.15%), Pirelli (-44.99%), Amplifon (-43.31%), A2A (-41.87%), Azimut (-40.42% ), Nexi (-40.37%), Hera (-40.29%) and Enel (-40.05%). The best stocks are Tenaris (+ 44.03%), Atlantia (+ 29.53%), Leonardo (+ 15.43%) and Banco BPM (+ 2.05%).
The final week of September “was a difficult week dotted with news that worried operators: from the worsening of geopolitical tensions after the annexation of some Ukrainian regions by Russia, to the sterling crisis after tax cuts by the British premier Liz Truss, the sabotage of the Nord Stream gas pipelines through the electoral outcome and the macro data that highlighting an out-of-control inflation “, comments Pietro Di Lorenzotrader and founder of SOS Trader.
Equita remains cautious on market prospects
In their usual monthly report at the beginning of the month, the Equita SIM analysts are still very cautious. “Last month we reported that a more cautious attitude in the portfolio and on the markets seemed appropriate to us due to growing fears on the macroeconomic front, and today we see no reason to change this approach”, explains the Milanese sim.
“Despite the weak performance of the markets since the beginning of the year, an already very cautious positioning of investors and multiples who are already pricing in a decisive economic slowdown (P / E adj. 2023E of the Italian market at 8x vs. historical average of 13x, therefore discounting a cut implicit of the EPS estimates of 35-40%, or 10/15% below the levels of 2019), we believe that the risks on the macroeconomic and geopolitical front have further increased “, argues Equita which at an operational level believes that it is There is still a need for caution on the markets, as visibility on the depth and duration of the economic slowdown in Europe and on the end of the current monetary tightening is still low. In the recommended portfolio Equita maintains an investment weight of 88.5% (from 89% of the previous month vs. neutral weight of 90%) confirming the neutral view, maintaining a strong positioning on quality stocks.