Negative week for the main European stock exchanges, where only the Paris stock exchange took home a gain in the wake of the new Lecornu government which, reconfirmed on Friday after resigning at the beginning of last week, promised to suspend a controversial pension reform until after the 2027 elections. In general, the renewed trade tensions between the USA and China have weighed on Euroland stock exchanges. Meanwhile, the extension of the shutdown in the United States canceled the release of some macroeconomic data, while in the Old Continent the published statistics signaled the effects of tariffs and other restrictions on international trade. On the monetary policy front, the positioning in favor of cutting interest rates in the USA by the Federal Reserve is increasing. Expectations strengthened by the spread of the Beige Book which confirmed signs of weakening of the Stars and Stripes economy. Also in Europe, weak employment data in the United Kingdom has hinted at a slowdown in wage growth, fueling expectations of a reduction in the cost of money by the BoE next year.
United Kingdom, minimal expansion and mixed signals from the labor market
The latest UK GDP data for the month of August shows growth of 0.1%, which confirms the fragility of the British economic recovery. Although the overall figure excludes a contraction, explains Richard Flax, Chief Investment Officer of Moneyfarm, the pace of expansion remains barely perceptible and reflects the persistent weakness of consumption and business investment. Recent surveys show how families remain cautious, penalized by still high financing costs and low confidence, while businesses continue to face restrictive credit conditions and high uncertainty regarding economic policies. The labor market is also showing signs of a slowdown: the unemployment rate has risen to 4.8%, although the National Statistics Office has detected a certain stabilization of pay slips and job offers. This, the expert underlines, could indicate a labor market undergoing gradual, not accelerated, adjustment, providing a moderate but still significant sign of reassurance. Overall, however, the picture that emerges is that of economic stagnation, rather than a sustained recovery.
Record gold and silver: the market seeks refuge
The rise of precious metals seen as safe havens for investors seeking protection for their investments, in a general climate of tension, does not stop. Gold set new records this week and surpassed the $4,100 threshold. Bets on the US Federal Reserve cutting interest rates in the United States are pushing the prices of the yellow metal forward, while the exacerbations of trade difficulties between the United States and China are pushing operators towards safe haven assets. Silver is also running, having updated its historical highs by traveling above 53 dollars an ounce, Bank of America and Société Générale now predict that gold will reach 5,000 dollars by 2026, while Standard Chartered has raised its price forecasts for next year to 4,488 dollars.
The weekly performance of the stock markets
The best performance of the week was recorded by the Paris stock market, rising by 1.65% with Prime Minister Sebastien Lecornu overcoming two motions of no confidence, after the Prime Minister announced his intention to suspend the controversial pension law to obtain the support of the National Assembly. Significant drops were recorded, however, among the other European stock exchanges: Frankfurt, which is the worst place, recorded a drop of over 3 percentage points. Milan loses 2.4%, London loses 1.6%. The outcome is also expected to be a decline for the Wall Street stock market.
The best and worst in Piazza Affari
On Piazza Affari, the worst performance was recorded by Fincantieri, down 18%. Leonardo also fell by 13.3%. The best performer, however, is TIM which gained 4.4%, promoted by analysts and supported by expectations of new consolidation operations in the European telecommunications sector. Furthermore, Campari did well with +4.05%. Utilities are holding, rising due to their defensive nature, as the demand for these services remains relatively stable even in times of economic uncertainty: Italgas rises by 3.9%, Enel by 3%, A2A by 2.4%. Rises of over 2% also for Snam and Terna.
