Cautiously positive week for the main European stock exchanges, with the meeting of ECB which attracted the attention of investors. The Frankfurt bank cut the cost of money by 25 basis points, as expected by analysts. The monetary policy of the Frankfurt bank remains restrictive with a data dependent approach. “We are currently restrictive,” reiterated the president of the European Central Bank, Christine Lagardein the usual post-decision press conference, adding that “to define the appropriate monetary policy stance, a data-driven approach will be followed whereby decisions are taken from time to time at each meeting”.
The macroeconomic scenario
US inflation numbers released this week were key ahead of the next Federal Open Market Committee (FOMC) meeting on December 17-18, but the latest data and recent comments from policymakers suggest that the central bank US remains on the path to returning to monetary policy neutrality. In fact, US consumer prices have not had any particular effects on the markets which are in fact continuing their static phase dynamics at stock highs.
The November non-farm payrolls report, released the eighth previous year, strengthened expectations of an interest rate cut by the central bank led by Jerome Powell.
Gold: 2025 target price between 3,000 and 3,300 dollars
After the peak in October 2024 when gold reached US$2,790 per troy ounce, its price has retraced to $2,550. This could leave room for a year-end that brings it back to $2,750, explains Eric Strand, CEO of AuAg Funds and partner of HANetf. This decrease was caused by the market believing that the new US President Donald Trump would be able to reduce government debt once he took office. The view of AuAg Funds, however, does not match this sentiment, on the contrary, everything will translate into a net deficit and, in the coming years we will witness an inflationary boom in an economic environment in which raw materials will prosper, underlines the expert, adding that on the one hand, there will be the application of duties by the USA, the continuation of trade wars, geopolitical tensions and a consequent increase in production costs in most sectors which will have repercussions on consumers; on the other hand, US policies will cause higher unemployment, forcing much lower rates and devaluations in many other countries to offset the tariffs.
Among other commodities, the prices of petrolium they moved higher after the fall of Bashir Al-Assad’s regime in Syria, with investors fearing a slowdown in demand for crude oil due to modest growth in the global economy. Meanwhile, the crude oil exporting countries, during the OPEC+ summit, extended supply restrictions for another three months to support prices. Global oil demand growth is set to accelerate next year, according to the International Energy Agency. This is what the International Energy Agency finds in its latest monthly report on the oil market. A more modest growth in demand of 840 thousand barrels per day is expected for 2024, while an increase of 1.1 million barrels per day is expected in 2025, bringing global consumption to 103.9 million barrels per day ( MBG).
On the currency market, the dollar USA reached one-year highs against the main global currencies, supported by the increase in Treasury yields and Donald Trump’s election victory, which fueled expectations of economic policies in favor of growth and a more expansionary fiscal orientation.
The weekly performance of the stock markets
This week, the crown of increases was won by the Paris market which brought home a gain of over 1 percentage point. French President Emmanuel Macron has chosen the centrist Francois Bayrou as the new prime minister, tasking him with forming a government. This is followed by the Milan stock exchange which rises by 0.76%, driven above all by the banking risk, which has come back into vogue, which has galvanized the sector’s stocks. Frankfurt’s gain was fractional, closing with +0.23%. Down, however, Madrid with -3.03% together with London -0.59%. The ending is preparing to be mixed for the Wall Street stock market with investor caution reigning supreme ahead of the Fed meeting on Wednesday 18 December.
The best and worst in Piazza Affari
Among the best and worst of the week, banking and luxury stocks recorded the best performances. Among these, Moncler rose by 7.3% and Cucinelli by 8.6%, the latter having revised its guidance on turnover growth for 2024 upwards to between 11% and 12% thanks to the strong sales trend of the last few months which allow us to estimate growth for the fourth quarter in line with the third. Outside the FTSE MIB Ferragamo soars by 10.9%. The hopes that the stimuli in China will support consumption contribute to assisting the luxury sector.
Among banks, BPM soars by around 4% followed by MPS +4.5%. Furthermore, Intesa Sanpaolo +2.9% did well. Credit Agricole has strengthened its grip on Banco BPM in defense of the OPS recently launched by Unicredit. The French group will also present an application to the Supervisory Authority to be authorized to increase its shareholding above the threshold of 10% of the share capital and up to 19.99%.
On the downside, the decline of Buzzi -4.8% and Prysmian -4.2% was heavy.
