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The Stock Exchange, the indices of 26 September 2023The Stock Exchange, the indices of 26 September 2023The Stock Exchange, the indices of 26 September 2023
(Il Sole 24 Ore Radiocor) – Interest rates, difficulties in the Chinese real estate sector and lower-than-expected US data kept European stock markets under pressure, which closed another session in the red, even if above the day’s lows. In Piazza Affari the FTSE MIB lost 1%, weighed down by the banks, while in Paris the CAC 40 fell by 0.7% and in Frankfurt the DAX 40 fell by 0.97%. In the rest of Europe, in Amsterdam the AEX fell by 0.72%, in Madrid the IBEX 35 by 0.2% and in London the FT-SE 100 remained virtually unchanged. Among the slowing factors for the markets, there remains the awareness that the monetary tightening will last longer than expected, as reiterated on the eve of the president of the ECB, Christine Lagarde, with the decline in the cost of money which may not begin before 2025. Fears about inflation remain, with the price of oil remaining high, and uncertainties about the stability of Beijing’s economy: the giant Evergrande – the most indebted real estate company in the world – continues its descent on the Hong Kong Stock Exchange , where in today’s session it left another 7% on the ground. Meanwhile, disappointing data on home sales and consumer confidence arrived from the United States in the afternoon. As for Italy, tensions on the spread, which rose during the day to 192 points, the highest since May: the government must present the update note to the Def by Thursday.
USA: consumer confidence and home sales down, below estimates
In September, Americans are proving less optimistic about the economy than in the previous month. The confidence index drawn up monthly by the Conference Board, a private research group, fell from 108.7 in August (revised from the initial 106.1) to 103 points, against expectations for a figure of 106 points. The component measuring expectations for the future fell from 80.2 to 73.7 points; that on the current situation rose from 146.7 to 147.1 points. Meanwhile, new home sales in the United States fell more than expected in August. The Commerce Department reported a decline of 8.7% to an annualized rate of 675,000 units, versus expectations for a reading of 695,000. The July figure was revised from 714,000 to 739,000. Compared to a year earlier, the figure is up 5.8%. The median price decreased to $430,300, the median price stood at $514,000. At the current sales pace, it would take 7.8 months to run out of available homes.
Wall Street down, sharply down towards September
Wall Street is down, after the slight rises on the eve interrupted a series of four negative sessions. However, September will remain a decidedly negative month, with the S&P 500 index having lost 3.8% so far, the Nasdaq Composite 5.4% and the Dow Jones 2.1%. It was above all the Federal Reserve that caused the indices to fall: the US Central Bank, as expected, decided to keep interest rates at 5.25%-5.5%, the highest level in the last 22 years, but hinted that rates could stay high longer than expected to fight inflation. After the Fed’s decisions and the words of President Jerome Powell, the yield on the two-year Treasury bond rose to the highest since 2006, over 5.1%, and that of the ten-year bond reached new highs since 2007, exceeding 4 .5%, putting further pressure on the indices. The rise in oil prices, +13% in the last month, could then complicate the central banks’ fight against inflation. What worries traders, then, is the lack of agreement, at the moment, between Republicans and Democrats to finance the government and avoid the shutdown, i.e. the closure of non-essential federal activities, which would start on October 1st. According to experts, a shutdown would have negative repercussions on fourth quarter GDP. At an international level, uncertainties weigh on the stability of the economy in China, where the giant Evergrande – the most indebted real estate company in the world – continues its decline on the Hong Kong Stock Exchange (also today -7%), dragging down all the Asian squares.
In Milan, banks sold, utilities and energy also did badly
In Milan, among the titles sales on Banca Mps and Banca Pop Er. Opposite sign for Mediobanca, which moved against the trend after Monday the partners of the Consultation Agreement expressed, as expected, their support for the list of candidates presented by the outgoing board of directors and led by the president Renato Pagliaro and the managing director Alberto Nagel. On the eve of this, the sector had initially benefited from the changes to the tax on extra profits contained in the draft amendment to the Asset Legislative Decree: institutions, in particular, will be able to decide not to pay the tax if they set aside as a reserve a tax equal to at least 2.5 times the ‘tax. The prices then slowed down following the general decline in the price lists and today they moved into the red. Furthermore, MPS continues to be at the center of rumors about possible disposals of shares by the Government. The latest indications are for the sale of a stake of between 5% and 10% to be carried out by June next year. As for Unicredit, according to what was reported by Il Sole 24 Ore, the procedure for defining the list of candidates for the board of directors for the renewal of top management is underway in recent days. If the confirmation of CEO Andrea Orcel seems obvious, the candidacy of president Pier Carlo Padoan could be less certain. Banco Bpm and Intesa Sanpaolo lost. Nexi was also weak, on a day of sales for other titles in the sector such as Worldline in Paris down by 2 percentage points, with Telecom Italia, which remains awaiting developments for the network dossier. Looking at the utility-energy sectors, Saipem, Erg, Italgas and Snam Rete Gas fared badly. Bad day also for Interpump Group, Prysmian and Stmicroelectronics. Amplifon moved against the trend and attempted to recover after the strong sales of the day before, caused by the news of the Antitrust investigation into the hearing aid market in Italy, on which the market is starting to make its first assessments.
Morgan Stanley cuts estimates on European fashion houses
Rain of sales on European luxury giants after Morgan Stanley reduced its profit estimates for the sector in a report in light of the slowdown in the market. Moncler is the one paying the price on Piazza Affari, which finds itself with a target price cut by Goldman to 64 euros (from 69 euros). For the third quarter, for the down jacket brand, experts predict «organic growth of +5.5% year on year, equal to 655 million euros in sales, while, however, they slightly lower their estimates for 2023 taking into account «the slowdown in global demand and increase in macro pressure”. Also down are Tod’s, where analysts also reduce the target price to 30 euros (from 34 euros), Salvatore Ferragamo and Brunello Cucinelli. But Morgan Stanley’s downward estimates hit all the European giants, as confirmed by the negative trend on the stock lists of Kering, LVMH, Hermes, Richemont.