The European stock exchanges file the session in no particular order, while Wall Street recovered ground after a red start and is trading on parity, with a focus on the job report and the quarterly reports of the giants Apple, Amazon and Alphabet released yesterday.
In Piazza Affari, the Ftse Mib closed down by 0.55% to 26,950 points, with Pirelli (+3.6%) at the top after Morgan Stanley raised its recommendation on the stock to Overweight/In-Line, confirming the target price at 5.5 euros. Finecobank (+2.7%), Campari (+2.4%) and Saipem (+1.6%) also rose, while Terna (-2.8%), Nexi (-2.8%), Hera (-2.8%) and Intesa Sanpaolo (-2.9%).
The latter released its 2022 results, which showed consolidated net profit of €5,499 million, excluding €1.4 billion of provisions/value adjustments for Russia and Ukraine. The institute confirmed the formula of the 2022-2025 Business Plan and, in particular, the objective of 6.5 billion in net profit by 2025.
Bond yields start to rise again, including that of the BTP which rises by 12 basis points to 4.02%, while the spread with the Bund widens slightly to 183 basis points. On Forex, the euro/dollar returns to 1.084 and the dollar/yen approaches 131, while among raw materials oil is still trading downwards, with Brent at 81.2 dollars a barrel.
Above all, the surprising January report on the US labor market triggered the sales on government bonds and the strengthening of the greenback, which pushed the 10-year Treasury rate to 3.53% and the two-year rate to 4.26%.
The data highlighted the creation of 517,000 new jobs, almost three times the expected non farm payrolls, with an unemployment rate at its lowest since 1969, at 3.4%. There was a slight slowdown in the growth trend of average hourly wages, equal to 4.4%.
Numbers that once again confirm the solidity of the American labor market, probably increasing the concerns of the Fed, according to which a moderation of pressure on wages is necessary to effectively fight inflation.
All this, after the stars and stripes central bank raised rates by 25 basis points this week, slowing down the pace of the tightening and speaking for the first time of “disinflation”.
Yesterday the ECB instead raised the cost of money by 50 basis points, announcing a new tightening of the same size in March. However, traders focused on a possible easing of tightening later on and welcomed Christine Lagarde’s comments on lower risks and a likely slowdown in inflation.
The services PMI and composite indexes of the main European countries also came from the macro agenda, which after six months of contraction show a marginal expansion for the eurozone economy, with the tertiary sector at its highest levels since July. In the USA, on the other hand, the ISM services index surprisingly rebounded to 55.2 points in January, from 49.2 in December, indicating an immediate recovery in demand from American consumers.