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(Il Sole 24 Ore Radiocor) – Week in no particular order for the European stock markets marked by uncertainty, between the skyrocketing tension in the Middle East, and the Fed and ECB interest rate dispute. Thus, while Piazza Affari has gained 0.5% in the last five sessions with an annual performance (+11.8%) far superior to that of the other markets, Frankfurt has lost 1% (+5.9% since the beginning of the year), Paris has gained a timid 0.1% (+6.4% since the beginning of the year) and Madrid a +0.4% (+6.2%). The worst was London which dropped 1.2% (+2.1%). The oil sector was hit hardest by the selling, with a weekly decline of 3.5%, as the price of crude lagged. On the other hand, banking stocks (+0.7%) and food sector stocks (+1.5%) did well.
In Milan the best performance was that of Campari (+6.5%), which announced that it had increased its production capacity for Aperol thanks to the expansion of the Novi Ligure plant. Among the banks, Pop came to the fore. Sondrio (+6.4%), Banco Bpm (+5%) and Mps (+4.5%). Positive eighth also for Diasorin (+5.2%). The worst performer in the Ftse Mib was Saipem, which lost 7.2%, even though it boasted progress of more than 52% since the beginning of the year. Other oil stocks also performed poorly (-3.9% Tenaris and 3% Eni), as well as St (-5.9%) and Interpump (-2.8%). In the rest of Europe, Adidas stood out thanks to the increase in estimates (14.4%). The effect of higher-than-expected first quarter revenues was also felt on L’Oreal (+7.3%). On the other hand, the Dutch Asml (-9.5%) and the German Infineon (-6%) lost share. Volatile week for crude oil, with the WTI dropping 3%, while gold gained 2%. On the currency, the euro/dollar exchange rate remained little changed (+0.2%)
Wall Street mixed with eyes on MO and Fed
A controversial session on Wall Street, after the Israeli attack on a military base in Iran which for now seems limited in its scope, almost a demonstration action, according to some observers. On the eve, fifth consecutive session of decline for the S&P 500, the worst series since October, and the Nasdaq Composite. Analysts now see the interest rate cut moving away: Raphael Bostic, president of the Atlanta Fed, said that the central bank “will only be able to reduce rates towards the end of the year”. The possibility of a first interest rate cut in September is at 45.6%, according to the CME Group’s FedWatch Tool, while the chances of a cut in June or July are now almost eliminated. Moving on to stocks, another day of decline for the Taiwan Semiconductor Manufacturing (TSMC) stock, despite a very positive quarterly report, due to an outlook on the semiconductor industry at a global level that is below expectations, also due to uncertainties at a macroeconomic and geopolitical level, the company explained. For this reason, two of the main customers of TSMC – which is the main chip manufacturer – are also declining, namely Nvidia and AMD.
Slip for Netflix due to fears over subscriber numbers
Netflix shares are in sharp decline, despite a better-than-expected quarterly result. In fact, analysts reject the decision of the streaming service platform to no longer provide data on the number of subscribers or even on average revenues per user from next year, preferring to focus on revenues, operating margins and cash flows. However, the company specified that it will continue to announce “when we exceed significant thresholds in terms of subscribers”. In the first quarter of 2024, Netflix recorded earnings per share of $5.28 on revenues of $9.37 billion, against expectations for $4.52 on revenues of $9.28 billion, up from $8.16 billion in a year before. Net income was $2.33 billion, or $5.28 per share; a year earlier, it had been $1.30 billion, or $2.88 per share. Russ Mould, investment director at AJ Bell, commented to the Wall Street Journal that the market looks to subscriber numbers to gauge Netflix’s success. In the first quarter the number of subscribers increased by 16% to 269.6 million, against the expected 264.2 million. Netflix stock has gained approximately 27% since the beginning of the year and 85% in the last twelve months.
Nervous atmosphere in the session of April 19th, but Milan recovers and closes at +0.12%
Israel’s attack on Iran sent European stock markets into disarray, but after an initial phase of shock they limited the damage. In particular, Milan and London managed to close the last weekly session above parity. Stocks continue to move in a climate of nervousness, although Theran has made it known that he is not planning an immediate response. The United States, although informed, has specified that it is not involved, as underlined by the secretary of state, Anthony Blinken. Wall Street also reacted in a composed manner, with mixed indices, perhaps more attentive to the prospect of a late cut in interest rates, than to the news coming from the Middle East.