MILANO – European equities are heading towards a lower opening, following the falls in Wall Street and Asia following the move by the Fed which raised the cost of money by another 75 basis points. The market was convinced at first, at the publication of the press release, that the message was accommodating, seeing signs of an imminent slowdown in the squeeze. Then the words of the governor Jay Powell they have made the lists change direction (the S & P500 lost 2.5%), confronted with the reality that more rate hikes will be “appropriate” and that a tight monetary policy will be necessary “for some time”. In short, although perhaps of a lower intensity, the Fed squeeze will continue and “the final level of rates will be higher than initially expected”.
Today is the turn of the Bank of England, called to the strongest action for over thirty years: even in this case, the market has fully priced a move from 75 basis points.
Future down for European stock exchanges
A downward start is expected for European stock exchanges after the Fed’s decision to raise interest rates by 0.75%. The words spoken at the press conference by Governor Jerome Powell, who defined other rate hikes as “appropriate”, underlining that a restrictive monetary policy will be necessary “for a certain time”, to cool the minds. The futures of the Eurostoxx 50 fall by more than 1%, those of the Dax in Frankfurt lose 0.79% and those of the Cac 40 in Paris fall by 0.90%. Also down are the futures of the Ftse Mib in Piazza Affari, which record a decline of 0.82%, and those of the Ftse 100 in London, which mark -0.70%.
Asian stocks in red after the Fed
Asian exchanges are in the red on the back of Wall Street’s steep drop after the Federal Reserve hiked interest rates again and warned there will be more monetary tightening. The Tokyo Stock Exchange was closed today for holidays. The Hang Seng index dropped 3%. A few hours after the Fed’s rate hike, Hong Kong’s central bank also raised rates. Hong Kong’s monetary policy moves in tune with that of the United States, as the city’s currency is pegged to the greenback. In contrast, the Kospi index which travels above parity.
Falling gold and oil
Gold price down on commodity markets this morning: the precious metal for December delivery changes hands at $ 1,637 an ounce with a drop of 0.79%.
Oil is also weak: the WTI for delivery in December is trading at 89.36 dollars a barrel with a reduction of 0.71%. Brent with delivery in January changed hands at 95.67 dollars with a decrease of 0.51%.
Stellantis, revenue leap in the quarter with the return of chips
Stellantis achieved net revenues of 42.1 billion euros in the third quarter of 2022, with a growth of 29% compared to the same period of 2021, mainly thanks to the increase in volumes, favorable net prices and the positive effects of rates exchange rate. Consolidated deliveries are 1,281,000, up 13% on an annual basis, “mainly thanks to the better availability of semiconductors compared to the third quarter of 2021”. Global sales of electric vehicles increased by 41% compared to the third quarter of 2021.
Chinese lists close weak but recovering
The Chinese stock exchanges recover their initial losses, but still close just below par, discounting fears about new rate squeezes in the US in the aftermath of the hike decided by the Federal Reserve of 0.75%, to bring the cost of money in the fork between 3.75% and 4%, at the highest levels since 2008: the Shanghai Composite index lost 0.19%, to 2,997.80 points, while the Shenzhen one lost 0.04%, slipping to share 1,967.38.