The week for the financial markets ended in positive territory. Acting as an assist to the stock lists, not only the central banks, but also the news arriving from the corporate front which made the luxury sector shine. In this eighth we also witnessed the gold rally which reached new historic highs.
The Fed sets trends
Like the ECB previously and subsequently the Fedthis week the Swiss central bank cut rates by 25 basis points and announced possible further reductions during the year. Same fate in Sweden: rates reduced to 3.25% and other cuts to the cost of money in the months to come. The board of Australian Central Bank instead, it decided to leave interest rates unchanged at 4.35%, remaining faithful to the objective of bringing down inflation which was still considered too high. What surprised and supported investor sentiment the most was the stimulus package that Beijing launched this week to revive the economy. The central bank said the announced rate cut is aimed at helping create a good monetary and financial environment for China’s stable economic growth and high-quality development. China’s stock market rejoiced, with the Shanghai Shenzhen CSI 300 rallying 6%, erasing a year’s worth of losses in just two days.
Returning to the ECB, in the wake of the relatively negative European PMI surveys, the European Central Bank is under pressure for more monetary easing, having downplayed the prospects of an October cut in its recent monetary policy meeting. However, the Bank of Frankfurt has made it known that it does not want to feel “tied” to following a given monetary policy path and wants to maintain full flexibility in making its decisions on interest rates. Eurotower specified this as usual monthly bulletinaccording to which the Board confirms its “determination” to ensure the timely return of inflation to the 2% objective in the medium term.
Euphoric luxury: Chinese adrenaline and more
The drop in rates in China has boosted the luxury and fashion sector, as the measure has strengthened the outlook for industries in Europe that are most exposed to the Chinese economy, including luxury. But the news arriving from the corporate front also contributed to assisting the sector: the group LVMH he entered the capital of the Ruffini family holding company. The French giant has purchased 10% of Double R, the vehicle of the Ruffini family which holds a direct stake in Moncler equal to 15.8%; Double R will increase its stake in Moncler by up to 18.5% through a Moncler share purchase program over a period of approximately 18 months, with financing for such purchases to be made available by LVMH.
The macroeconomic scenario
The index Eurozone PMIs reported a contraction in production. But this data alone will not tip the scales on an ECB cut in October. The euro area PMI fell significantly, in both the manufacturing and services sectors, mainly due to the tightening of global monetary policy and weak sentiment among both investors and businesses.
Across the ocean, the third reading of US GDP of the second quarter was confirmed at 3%, in line with forecasts, while the requests of unemployment benefits they fell by 4,000 units to 218,000, above estimates and with the figure thus falling to a four-month low. The data on the… orders for durable goodswhich were expected to decline sharply in August and instead remained stable compared to the previous month. All numbers, those released this week, which confirm the resilience of the Stars and Stripes economy and cement expectations for the “soft landing” desired and sought by the Federal Reserve. We now head towards the key data onemployment in the United States next week.
Gold always at the top
The rush of gold prices does not stop, updating new records after having broken through, in the last eighth, 2,600 dollars an ounce, still driven by the enthusiasm for the reduction of interest rates in the United States of America, by of the Federal Reserve. Geopolitical tensions, strong purchases by central banks and recently also inflows into ETFs also contribute to supporting the precious metal’s run.
Among other commodities, however, the rawafter the Financial Times reported that Saudi Arabia may abandon its unofficial price target of $100 a barrel as it prepares to increase production.
The Fed cut 50 points, stock markets rebounded, but the dollar has not lost ground. The fact that the Fed’s communications were less dovish than the decision might suggest suggests that the central bank is not yet particularly concerned about the state of the US economy. The worst currencies of the week were those considered safe havens, as well as the yen Japanese, penalized after another dovish meeting of the Bank of Japan. The most prominent currency, however, was the sterlingonce again supported by a central bank that used hawkish tones and left rates unchanged and at the highest level among the G10 countries.
The weekly performance of the stock markets
More than positive weekly performance for the main European stock exchanges with the Frankfurt, Paris and Milan markets up by more than 2 percentage points. Madrid did well, bringing home a gain of 1.6%. In contrast to the trend, however, the London Stock Exchange closes just below parity, while the end is also preparing to be positive for the American indices.
The best and worst in Piazza Affari
Among the best stocks of the week, we note the good performance of the luxury sector, with Moncler leading the way among the blue chips, bringing home a gain of over 14 percentage points. Still in the sector, Brunello Cucinelli shines with +8.3%. The banking sector also performed well: the supervisory and administrative boards of Commerzbank confirmed the bank’s current independence strategy, while the CEO of the German institution, Bettina Orlopp, announced a first round of talks with UniCredit. Piazza Gae Aulenti shares soared by 5.4%. Outside the main basket, MPS does well (+6.8%). Intesa Sanpaolo (+1.8%) stands out, having exceeded 70 billion in capitalization this week. On the downside, the oil companies are positioned: Saipem (-6.5), Eni (-5.4%).
