Summary
Stock exchanges and markets, a recap of previous episodes
2022 turns out to be the black year for Big Tech. We have already metabolized the fact that 39% of Nasdaq stocks have lost half their value compared to their highs and that the sector is kept afloat by the bear market, but what happens if we look up and look around?
The time of the 2021 budgets has just begun, the only sectors that are exceptions for now seem to be the luxury sector, in particular real estate, the oil sector that boasts a +15%, despite the fact that we live in the time of the green revolution, which seems to benefit the black gold precisely because of its (momentary) inability to assist this transition, and the financial sector that registers a +4%. What unites the destinies of each sector has been, is and will be the Fed’s policy (rates, inflation).
Bonds down
Bonds are not doing well at all, in fact they are falling all over the world with the only exception of Japan which sees the yield on its 10 year bond rise by +0.13% recording the highest in the last year.
American two- and ten-year bonds, on the other hand, are holding up well despite everything.
Europe and the stability pact
The US dollar rises and changes hands with a few cents more (1.13 at today’s 11:00 AM CET) while Europe is a bit stagnant, waiting for the debate on the new rules of the Stability Pact to get underway under the chairmanship of Macron, who for some time has been making agreements with Rome and Spain for more flexible rules.
In the old continent, the future is seen with optimism. It seems that Europe has overcome the economic shock of the pandemic better than expected (at least on the surface).
In fact, Latvian Dombrovskis, European Vice-President and Commissioner for Trade, said:
“Several points of convergence seem to be emerging on a more gradual path for debt repayment, in particular with respect to the 1/20 rule”.
the issue will only come to the forefront in June when the new structures of the eurozone come to light.
In fact, following the untimely death of the President of the European Parliament, David Sassoli, as well as the election of Maltese Roberta Metsola, the EU has scheduled the election of the President of the Italian Republic and the elections in France.
What happens in Italy
While waiting for the race to the Quirinal, the markets send the first signals by raising interest rates.
The 10-year at 1.36% and the spread at 140.7 with a +0.72% compared to yesterday and a +24% from the beginning of the year are the first signs that it will not be a walk in the park.
The 10-year bund, a benchmark of the eurozone and the 5-year German rate are not to be outdone, the latter in particular touched the highest since March 2019 at -0.341%.
The Italian stock market is holding up at a substantial breakeven at 27,460.89 basis points (-0.08 at 1:00 PM today) but up slightly since the start of the year.
Inflation is also on the rise, with Istat reporting a 4% increase in consumer prices since December.
Stocks to watch
Stocks to keep an eye on are certainly Fope, a Vicenza-based jewelry and luxury company that is recording a 50% increase in revenues from the previous year and a nice upward trend, Maire Tecnimont (+13%), Webuild that deals among other things with large works that has recently won an order from 940 million euros for the construction of a mega parking lot of 10500 multi-storey places in Riyadh, STM that is definitely a buy according to Deutsche Bank but also Tenaris and the energy sector with Terna, Eni and its IPO and Enel.
In the financial sector an eye to Generali struggling with the new formation after two defections in the Board, which will probably be resolved with the Board of 14 March.
Instability also for Tim also struggling with the battle for the appointment of the new CEO.
The rest of Europe and Asia
The rest of Europe (continent) is doing well, Amsterdam is in a substantial draw, Paris is driven by luxury and Zurich is doing well, thanks also to the replacement of the president Antonio Horta-Osario targeted by investors following his scandals. Madrid is also turning green.
A look at the Asian stock exchanges
The Nikkei in Tokyo but also Taipei, the Hang Seng in Hong Kong, Seoul and Mumbai are limping along while the CSI 300 index of the Shanghai and Shenzhen lists, as well as Singapore, are holding up. In his speech at the Davos General Assembly, Chinese President Xi Jinping warned of the dangers of a race to increase the cost of money and tried to put a stop to it and calm things down a little.
