European stock markets also follow yesterday's Wall Street decline, as did Asian stock markets overnight and this morning. London -0.57%, Frankfurt -1.32%.
The Milan index a few minutes after opening marks -1.16%. The provisional balance of the week remains positive, +0.96%. Yesterday the FTSE Mib had closed up by more than one percentage point, at 27,853, a few points from the 28,162 reached on January 5, 2022. Once that threshold is exceeded, you have to go back to 2008 to find higher levels of the Milan stock exchange.
The increase since the beginning of the year (+17%) was mainly due to the banking sector (+27.95%), i.e. the sector that has benefited most, at least so far, from the rise in interest rates.
Other sectors, on the other hand, suffer, especially technology. Yesterday on Wall Street Dow Jones -1.26%, Nasdaq -1.78%. This is also because yesterday data on producer prices arrived higher than expected: +0.7% the monthly variation, against expectations of +0.4%. The annual variation went from +6.5% to +6%, expectations were +5.4%.
The data follows a weaker-than-expected slowdown in US inflation, released on Tuesday (+6.4% versus expectations of +6.2% year-on-year) and data on retail sales and jobs, which raise expectations of stronger rate hikes by the Fed, the US central bank.
St. Louis Fed Chairman James Bullard, a non-voting member of the Fed board, said yesterday, referring to a 50 basis point hike in March (and not 25 basis points as markets expected): "I wouldn't rule anything out for that meeting or any other future meeting." Loretta Mester of the Cleveland Fed said: "Interest rates will have to rise above 5% and stay there for a long time. It will depend on the data how much they will have to rise above 5%».
In the eurozone this morning a similar message came in an interview with Bloomberg from Isabel Schnabel, a member of the Executive Board of the European Central Bank. "Markets are priced for perfection. They think that inflation will fall very quickly towards 2% and that it will stay there, while the economy will do just fine. That would be a very good result, but there is a risk that inflation will prove to be more persistent than currently expected by financial markets." He added that "we are still far from declaring victory" and that "a broad process of disinflation has not even begun in the euro area".
On the energy front, gas traded in Amsterdam fell below 50 euros per megawatt hour to 49.56 euros. It then rose just above 50 euros.
Oil also fell: Brent is trading at $83.5 per barrel, -1.90%.
At Piazza Affari, among the 40 stocks of the Ftse Mib only for Bper Banca (+1.31%) and Banco Bpm (+0.46%). Higher declines for Recordati (-4.35%) and Amplifon (-2.70%). Tenaris, Saipem and Moncler also fell by more than 2%.