(Il Sole 24 Ore Radiocor) – European stock markets choose the path of caution and move slowly on Federal Reserve day. Investors take a 25 basis point rate cut by the American central bank for granted, but will carefully follow the words of number one Powell: numerous analysts expect a less accommodating tone than expected in recent weeks, with a board divided between “hawks” and “doves” and with some statements that have reduced expectations on the next cuts. Much will also depend on the labor market data that will be released on December 16th and January 9th, before the next meeting on January 28th. All eyes are also on the ‘dot-plots‘ which will clarify the positions within the board.
Thus the FTSE MIB of Milan, the CAC 40 of Paris, the DAX 40 of Frankfurt are falling. The FT-SE 100 of London is on parity, while the AEX of Amsterdam and the IBEX 35 of Madrid hold up slightly better. In Europe, follow the speech by ECB President Christine Lagarde in the late morning and the data on Italian industrial production.
Spotlight on defense titles, Buzzi slips
On the Milanese stock market, attention remains high on the defense sector, among the protagonists in Europe on the eve, with Leonardo – Finmeccanica in decline. Kiev would be ready to co-produce drones with the Italian company “sharing experience and technologies”, as Ukrainian Foreign Minister Andriy Sybiha said. All eyes are also on Generali, after the rally on the eve of which brought the stock above 35 euros. Buzzi slips to the rear and Ferrari also slows down, with Morgan Stanley initiating coverage with a neutral rating, Equalweight, and a target price of 367 euros, while Jefferies has cut the target price to 310 euros. Lottomatica Group, Prysmian and Davide Campari did well, the latter while rumors are circulating that the Luxembourg holding Lagfin, which controls the group, is negotiating with the Revenue Agency to settle a tax dispute by paying around 400 million euros. Oil stocks are well bought, with Tenaris rising and Eni advancing, while the Antitrust has opened an investigation into the purchase by Plenitude (Eni) of Acea Energia.
Silver at record, gold stable and oil on the rise
On the raw materials front, the rise of silver does not stop, reaching a new record above 61 dollars an ounce at 61.61 for the spot contract, while gold stabilizes around 4,200 dollars an ounce. The price of oil is recovering with Brent above 62 dollars a barrel, awaiting data on American inventories.
Finally, on the currency, euro/dollar rising at 1.164 awaiting the Fed.
Spread stuck at 70 points, lowest since 2009
Stable trend for the spread between BTp and Bund. The yield differential between the benchmark ten-year BTp and the German equivalent maturity stood at 70 basis points as on the eve, around the lowest since 2009. The yield of the benchmark ten-year BTp increased slightly, standing at 3.57% from 3.55% at the previous closing.
