EU stock markets down, only oil stocks hold with crude leading since 2014

(Il Sole 24 Ore Radiocor) – Sales on the European equity markets prevail, after the positive session the day before the day before without the compass of Wall Street. Sales on technology stocks under pressure as US Treasuries yields rise, with investors bracing for a rate hike by the fed already in March. Eyes are also turned overseas as the quarterly reports of some big names in the financial sector such as Goldman Sachs are scheduled. In the meantime, they are holding oil stocks with oil at its highest in more than seven years as the euro lost the $1.14 threshold.

A hike in US rates in March would not be a surprise

From September, the interest rate markets “began to revise very quickly Fed bull cycle expectationsas Luigi Nardella of Ceresio Investors reminds us. The rate on two-year U.S. Treasury bills rose from 0.2% (“actually one hike in 2023”) to over 1.0% (“four hikes in 2022 and 2023”). The stock market, Nardella notes, “responded with violent rotation; strong correction of values ​​in hyper-growth more sensitive to interest rates and to major increases in the most cyclical stocks – banks and energy. An increase already in March – he concludes – would no longer be a surprise”.

Oil Price – Brent

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Only energy sources hold, in Milan widespread sales

On the Milan FTSE MIB, sales across all sectors, starting with financials, pulled down by Banca Generali with Banca Bpm worst among banks. Luxury is also low with Moncler. Meanwhile, they only hold Saipem, Eni and Tenaris. SubtonoAtlantia but better than benchmark, after Germany acquisition

Tokyo down, Bank of Japan lowers growth estimates

The Tokyo Stock Exchange fell, in line with other Asian stock exchanges. The Nikkei closed the session down 0.27%, after the Bank of Japan revised its GDP growth estimates for the current fiscal year 2021/2022 down (+2.8% from 3.4 % previously), up for the next 2022/23 (+3.8% from 2.9%) and down again for 2023/24 to +1.1% from +1.3%.

Events for Tuesday, January 18

On a more strictly macroeconomic level, after Japan’s opening up to industrial production in November and the BoJ’s rate decision, in Europe it is the turn of the German Zew index in January, of the Italian trade balance in November and UK labor data for November. In the afternoon, the United States will inevitably be in the spotlight, with the Empire Manufacturing index and the Nahb real estate market, both referring to the month of January.


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Felix J. Dixon