MILANO – Window markets on a day full of important events. In the evening, the main appointment: the Federal Reserve will communicate its rate decisions. The expectation is for a slowdown in the squeeze with an increase of 25 basis points, look at Powell’s words on the next trajectory. Tomorrow, then, it will be the ECB’s turn. “Inflation signals are better than a few months ago, but the war” against high prices “is far from won,” BNY Mellon’s Aninda Mitra told Bloomberg describing the moment the Fed is in. “Wages are still high and the job market is still tight.” Among the other turning points in the session, the manufacturing PMI index of the Eurozone which (as for China and Japan) rises but remains below the threshold that separates economic expansion from contraction (48.8 points) and then the inflation data . Eyes also on Brussels, with the European Commission presenting its proposals on aid to companies in response to Biden’s inflation reduction act.
Flat closing, in the morning, for Tokyo (+0.07%) in an overall positive session for Asia.
EU price lists cautiously rise in mid-morning
Milan (Ftse Mib +0.62%) is the best, followed by Madrid (+0.56%), London (+0.17%), Frankfurt (+0.1%) and Paris (+0.07% ). US futures are down. Crude oil rises (Wti +0.99% to 79.66 dollars a barrel), natural gas falls instead (-1.49% to 56.5 euros per MWh in Amsterdam), while metals appear to be mixed: l gold (+1.13% to 1,926.21 dollars an ounce) and silver (+1.58% to 23.52 dollars an ounce), weak iron (-0.29% to 870.55 dollars per ton) and steel (-1.39% to 4,123 dollars per ton). On the currency front, the dollar fell to 0.918 euros and 0.81 pounds.
Adani, the Indian group under attack by the bearish fund rescued by institutional investors
Adani Group saved in extremis by the support of large institutional investors: the offer of shares of the Indian Adani Enterprises, at the center of a vertiginous fall in the last week, ended positively yesterday afternoon on the Mumbai Stock Exchange, with a final rush of the last hours, as institutional investors, other publicly traded companies and high-profile individuals pumped money into India’s largest public equity offering ever. The billionaire’s group did not have the support of private investors even though the price of the shares on the market was lower than that of the public offer, following a massive sell-off: private individuals subscribed only 10% of the proposed shares . However, the portion offered to institutional investors was ultimately fully subscribed.
The main lifeline came from a group based in Abu Dhabi, which acquired 16% of the total, through a subsidiary. The group’s fall was dizzying: the fortunes of Gautam Adani, India’s richest man, very close to Prime Minister Modi, plummeted in less than a week. The tycoon lost around 31.2 billion euros in just a few days out of the 120 billion just seven days earlier, moving from fourth to eleventh place according to the index Bloomberg of billionaires. The storm was caused by Hindenburg Research’s Jan. 24 report, a 106-page document that says Adani has thrived his empire, whose businesses range from infrastructure to energy to food, thanks to a fraud . Hindenburg calls the group’s practices “the biggest swindle in business history” and accuses it of “shameless accounting fraud, stock manipulation and money laundering.” The group responded by denying all allegations.
Eurozone manufacturing PMI rises to 48.8 points in January as expected. Good news from Italy
The S&P Global Eurozone Manufacturing PMI rose for the third consecutive month to 48.8 in January, from 47.8 in December, in line with expectations. While still below the 50.0 threshold, and therefore indicative of a deterioration in the health of the euro area manufacturing sector, it was the highest reading since last August. Between individual countries, disappoint Germany with the manufacturing PMI standing at 47 points from 47.1 in December and against expectations for 47.9. Good news from Italy: production returned to growing slightly, orders fell to a much lower level and the level of employment increased once again. Forecasts for future activity have risen sharply since late 2022, while cost inflation has sunk to its lowest level in nearly two and a half years. The seasonally adjusted S&P Global PMI (Purchasing Managers’ Index) of the Italian manufacturing sector recorded 50.4 points in January, up from 48.5 in December, ending six consecutive months of results below the 50-point expansion phase. The figure is above market expectations, at 49.6 points. Although indicative of marginal growth, the January index was the best recorded by the survey since June 2022. Above 50 points, the Francewhich rises to 50.5.
Mixed departure for Europe
Mixed opening for European stock exchanges. The Paris Cac gained 0.13% to 7,091.43 points, the London FTSE 100 advanced by 0.22% to 7,788.16 points and the Madrid Ibex rose by 0.30% to 9,060.69 points. The Dax, on the other hand, lost 0.09% to 15,115.38 points. The Fed’s announcement on US rates is expected today.
Enel, BlackRock above 5% with its funds
BlackRock has controlled 5.022% of Enel since January 25th. This is what can be read in the updates made to Consob on significant shareholdings in listed companies. The purchases date back to January 25th and involved 15 controlled funds, from BlackRock Asset Management Canada to the similar fund active in North Asia.
Even PayPal cuts: away 7% of the workforce
The list of tech giants – such as Meta, Amazon, Twitter and Alphabet – cutting jobs to cope with business slowdowns grows longer. Online payments giant PayPal plans to cut around 2,000 jobs, or about 7% of the company’s total workforce, due to a “difficult macroeconomic backdrop”. “Over the past year, we have made significant progress in strengthening and reshaping our company to address the challenging macroeconomic environment,” PayPal President and Chief Executive Officer Dan Schuman said in a press release.
Euro stable against the dollar
Euro moved little at the start of the day, waiting for the Federal Reserve. The single currency is trading at 1.0868 dollars, 0.03% less than yesterday. Euro/yen at 141.60 and dollar/yen at 130.25.
Manufacturing contraction in China, the PMI of Japan stable
The manufacturing activity in Chinese it contracted in January for the sixth consecutive month due to the health situation. The PMI index, calculated by IHS Markit for Caixin, stood at 49.2 points last month, slightly improving on December’s 49 points. A number below 50 still reflects a contraction in activity.
Also in Japan we are still below the waterline: the index remains stable at 48.9 points in January.
Uncertain future for Wall Street, better Europe
Wall Street futures down after yesterday’s positive close, when the Dow Jones rose by 1.10% and the Nasdaq by 1.67%. While awaiting the Federal Reserve’s next moves, futures on the Dow Jones drop 0.22%, futures on the Nasdaq mark -0.40% and those on the S&P index drop by 0.29%.
Best in Europe. At the moment futures on the Eurostoxx mark +0.12%, those on the Dax +0.13% and those on the London FTSE index +0.10%.
Tokyo closes flat
The Tokyo Stock Exchange canceled the gains from the session and closed almost unchanged, pending the conclusion of the US Fed’s monetary policy meeting. The benchmark Nikkei 225 index rose 0.07%, or 19.77 points, to 27,346.88 points, while the Topix index slipped 0.15%, or 3.04 points, to 1,972 ,23.