Slow day for Avary Square, with Ftse Mib closing trading down 0.3% at 24,621 points. Buys on Amplifon (+3.2%), Banca Generali (+2.4%), Campari (+2%) and Finecobank (+1.9%). On the other hand, shares of Moncler (-3.2%), Telecom Italia (-2.1%), Stellantis (-2.05%) and Erg (-2%) declined.
Other European stock exchanges moved slightly, while Wall Street continues to slide after the release of employment data for November. The Dow Jones was down 0.4%, the S&P500 down 0.6%, and the Nasdaq down 0.8%.
The jobs report highlighted the creation of 263,000 new jobs, well above the 200,000 expected by analysts. Moreover, the October survey was revised up to 284,000 units, from 261,000 units initially reported. The unemployment rate held steady at 3.7%, while average hourly earnings grew by 0.6% on a quarterly basis and by 5.1% on a trend basis, more than estimates.
A tight labor market and upward pressure on wages underscore Jerome Powell’s view this week that the Federal Reserve still has a long way to go to control prices.
On Wednesday, the president opened up about a slowdown in tightening interest rates, boosting the prospect of a 50 basis point hike in December, but also stressed that the cost of borrowing should rise to 5% or more.
Today’s data shouldn’t change expectations about the extent of intervention in December, but it could lead to a more restrained tone going forward. In fact, the figures justify the arguments of the more hawkish members of the FOMC who are pushing to keep the cost of money at high levels for a long time to come in order to effectively combat inflation.
The report sparked fluctuations in foreign currencies and pushed yields on US bonds, and thus yields in Europe. In particular, the euro/dollar fell to 1.047 and then back to 1.05 while the 10-year US interest rate rose by 10 basis points to 3.6% and the 2-year interest rate, which is more sensitive to expectations on the Fed’s moves, rose more than 13 points. to 4.36%.
Producer prices for October in the Eurozone were also released on the day, down 2.9% after +1.6% in the previous month. On a yearly basis, the figure indicates +30.8% from expected 31.5% and +41.9% previously. Producer prices in the Eurozone fell more than expected in October, indicating that inflationary pressures may ease further in the coming months. This is the first time that producer prices fell on a monthly basis since May 2020. Looking at the details, the 6.9% drop in energy prices was the main drag on overall prices.