MILANO – Start of the week in deep red for the European stock exchanges and Wall Street, after the Asian session marked by declines. The first concern of investors concerns the Delta variant of Covid: the markets fear that it could negatively affect the reopening of economies: today Great Britain removes the restrictions, but there is great controversy due to the increase in infections that does not leave you calm. And it is no coincidence that it is precisely the stocks of airlines and shipping companies that push the falls on the New York Stock Exchange: According to Antonio Cavarero, investment manager of Generali Insurance asset management, “macro conditions remain generally favorable for the equity markets” but “Valuations, seasonal trends and positioning leave room for price corrections and volatility spikes, like the one we are experiencing today.” In any case, Cavarero wrote in a hot note, “as long as the Delta variant is not able to exert pressure on hospitals, I believe that the market will receive these corrections with discipline and selectivity”.
Over the course of the day, the indices however widened the declines. Milano it opened down by 1% but gradually increased its losses reaching -4% and then closed at -3.34%. Piazza Affari (which returned below 24 thousand points to the levels of March) moves with greater difficulty than the main squares of the Old Continent, which are however all in sharp decline: Frankfurt -2,7%, Paris -2,54% e London -2.34%. As a note Bloomberg, European equities put together the worst day of the year: fourth consecutive session down, worst streak since October. If you look at the capitalization loss of the Old Continent’s stock exchanges, the cost of this difficult Monday is 240 billion euros.
The main securities of Palazzo Mezzanotte are in sharp decline: the pharmaceutical sector is holding up better, while the banks are in difficulty. Enel is among the worst, also the sales on Tim which is brought to the tail of the main list after the revision on the objectives of the year: the former monopolist of the Tlc explained in a note that the agreement with Dazn for the distribution of the Serie A championship involves an acceleration in the growth expected for revenues and gross margin (mid single digit growth) in the years 2022-2023, with 2021 objectives confirmed in terms of turnover (stable to low to single digit growth) and revised to low to mid single digit decrease for EBITDA, also as a consequence of the general effects on the market of the time lag of the vouchers plan for households and businesses.
Also Wall Street does not escape the general black mood: at the end the Dow Jones lost 2%, the S & P500 1.5% and the Nasdaq 1%. Already in Asia, this morning, it was understood that it would be a complicated session: Tokyo closed the opening session of the octave down by 1.25%, while Hong Kong lost 1.84% e Only l’1%.
Insiders are also wondering about the reverse of US Treasury yields, although the inflationary push has shown to be well present from the latest data: according to the US financial agency, the word “inflation” was mentioned in 87% conference calls to present the quarterly results of American companies, up from 33% a year ago. Yet i Treasury they began to appreciate again, a symbol of prevailing concerns about the recovery, and consequently the yield fell to 1.3%. The accounts of the big corporations are now in full swing for the industrial and technological sector, after the big banks have generally done better than expected: with markets closed it will be IBM’s turn. Also it spread – i.e. the yield differential between BTPs and German Bunds – is affected by this situation: it grows to 109.5 points at the end of the session but the yield of the Italian ten-year is stable at 0.7%, reflecting an appreciation of the German bond considered “safe harbor” par excellence.
The decline also contributes to keeping prices in negative territory.Petroleum: after the OPEC + agreement on production levels, with an increase of 400 thousand barrels per day until the end of 2022, prices are heading down sharply. In New York there is a real thud of the WTI barrel, which exceeds -5%, breaking down the support of 69 dollars.
Stable week departure foreuro, after an initial appreciation of the dollar which benefited from safe-haven status in times of uncertainty. At the end of the day, the single currency closed stable just above 1.18 dollars. The Japanese yen, on the other hand, strengthened, positioning itself at around 129.25 against the single European currency and at around 109.50 against the dollar.
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