The black Tuesday of the European stock exchanges costs the financial markets 230 billion euros: essentially in a single trading day, the European stock exchanges burned 60% of the value of the Ftse Mib in Piazza Affari. London lost 2.47%, Frankfurt 1.82%, Paris 1.86% and Milan 1.64%: a thud that hurts not so much because of the intensity of the fall, but because only at the eve, the indices had recovered the pre-covid values of February 2020 when the global pandemic was not even a hypothesis.
The concern is that the acceleration in prices of raw materials – due on the one hand to the impracticable increase in demand and on the other to their scarcity – is driving sales on final consumers, thus convincing central banks to anticipate the end support measures for the economy.
At this point, the US inflation figure for April risks becoming a watershed in monetary policy decisions. Especially if – as analysts hypothesize – the consumer price index will go from + 2.6% in March to the expected + 3.6% in April: this would be the largest increase since 2006.
Concern about a monetary tightening leading to a rise in interest rates has translated into a general decline in the prices of government bonds with a consequent rise in yields. Of course, the Fed maintains that the increase in prices is only temporary and despite the secretary of the Treasury, Janet Yellen, no longer excludes the start of tapering (the progressive reduction of stimuli, ed); Fed number one Jerome Powell reassured the markets by ruling out an imminent cut in financial stimulus.
However, the problem – according to analysts – is serious because the prices of energy products have not risen with raw materials, but also food and semiconductor prices. Also because the supply chain is unable to keep pace with demand with an offer that remains lacking: a shortage that, in all likelihood, will continue until next year.
At this point, central banks’ decisions will be guided by prices: if the blaze expected for April does not return by the summer, the squeeze would get closer. And for the markets, a much harsher correction could begin than that seen last year with Covid.