Attention remains high on the financial markets which, at the start of the session, are once again losing ground after a run-up to strong sales. Once again, Piazza Affari is the most penalized. At 10.00 in Milan, the FtseMib index lost 0.73%. Frankfurt’s Dax (-0.62%) was also down, as was Madrid’s Ibex 35 (-0.28%), London’s Ftse 100 (-0.48%) and Paris’ Cac 40 (- 0.50%).
Concerns about the US debt remain in the foreground. The country could end up in default starting June 1st. The financial markets are closely monitoring the progress of the negotiations. Yesterday evening the rating agencies expressed their opinion: Fitch has decided to put the country’s rating under observation, with negative implications.
New sources of concern also come from macroeconomic data with the German economy entering a recession. The Locomotive of Europe’s gross domestic product (GDP) contracted by 0.3% on a quarterly basis from January to March, the second consecutive quarter. This is what was declared by the Federal Statistical Office which revised the original estimates at the end of April, which still indicated stagnation. Two negative quarters in a row is called a technical recession. The German economy was slowed down by the contraction in private consumption, which fell by 1.2% in the first quarter. One reason is probably the loss of purchasing power of consumers due to high inflation.
Germany in recession after two negative quarters
The return of volatility puts the stock market in difficulty. Fixed income is also moving: in the morning the yield of the Italian ten-year BTP rose to 4.35% from 4.32% at the previous closing. The focus is on progress in the Pnrr. The government will send the revision of its plan to Brussels by July in agreement with Europe. This was stated by the Undersecretary for the Economy Federico Freni, also excluding that the delay in the collection of the third installment of 19 billion is causing a liquidity problem to be covered with the issuance of additional debt.
Meanwhile, the yield differential between Italy and Germany on the ten-year segment is 185.9 basis points from 186.9 at the previous closure.
Returning to Piazza Affari, the largest losses at the start are for Pirelli, Iveco and Telecom Italia which fall back by more than two percentage points. Good for Generali after a solid quarter and the confirmation of all the objectives of the plan. At launch, the stock gains more than 1%.