Futures bullish; focus on U.S. inflation

(Alliance News) - European indexes are headed for an upward opening Tuesday, with investors awaiting U.S. inflation data in the afternoon, which could provide clues on the Federal Reserve's monetary policy path.

Thus, the FTSE Mib, is expected to rise 152.5 points or 0.5 percent after closing down 0.3 percent at 33,315.07.

In Europe, Paris' CAC 40 is expected to be in the green 46.8 points or 0.6 percent, London's FTSE 100 is given up 70.2 points or 0.9 percent while Frankfurt's DAX 40 advances 98.6 points or 0.6 percent.

The major U.S. indexes remained firm in Monday's trading session.

Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, writes that "the week started with limited appetite for U.S. equities. Investors are not feeling entirely comfortable ahead of today's U.S. inflation data, as several factors warn of a second flare-up in U.S. disinflation that could lead to a further softening of the Federal Reserve's dovish expectations. One of these is the jump in gasoline prices in February, another is the change in the CPI calculation, and the third is the rise in inflation expectations."

"The New York Fed survey released yesterday showed a strong increase in 3- and 5-year inflation expectations and a steady forecast of about 3 percent for this year," the analyst continues. "This means that consumers surveyed by the New York Fed do not expect inflation to fall further from current levels. And this is a problem because inflation tends to be self-perpetuating."

"A data set in line with expectations, or ideally lower than expected, should strengthen the Fed's June cut expectations, driving down U.S. yields and the dollar. A set of higher-than-expected inflation data should soften the Fed's dovish hand and trigger a devaluation of U.S. government bonds, a rebound in U.S. yields and the dollar. I think there is a possibility of a nasty surprise," Ozkardeskaya concluded.

In Milan, the Mid-Cap on Monday evening left 0.5 percent on the parterre at 46,194.45, the Small-Cap closed 0.6 percent in the red at 27,362.65, and the Italy Growth closed 0.7 percent down at 8,044.62.

On the Mib, Telecom Italia closed at the bottom of the list down 4.6 percent after announcing on Monday a supplement to its press release and presentation of its business plan to 2026, specifying that pro-forma net debt net of estimated deleverage for the Netco deal of around EUR6.1 billion as of Dec. 31, 2023, is expected to be around EUR7.5 billion at the end of 2024.

This change is mainly attributable to an ordinary operating component-i.e., Ebitda net of investments, financial expenses, Net Working Capital performance, TIM Brasil minorities, and the taxes and other charges component-and an extraordinary operating component, i.e., impacts related to the Netco transaction such as separation costs, possible impacts from price adjustments, and additional items related to Net working Capital. Finally, regarding the 2025-2026 cash flows, the company specified that in 2025 Net cash flow is expected to be around zero and in 2026 around EUR500.0 million.

Nexi, on the other hand, gave up 3.6 percent, priced at EUR6.32 per share, after a 1.9 percent green on Friday evening. Of note, UBS cut its target price on the stock to EUR7.75 from EUR8.25 with a 'buy' recommendation.

Leonardo, on the other hand, left 4.1 percent on the parterre as it awaits the accounts due later in the day.

Among the bullish few, Banca BPER brought home a green of 2.1 percent with price at EUR3.88. The stock thus updated its new 52-week high at this new price level.

Also doing well was Moncler, which rallied 1.8 percent, on its fourth session with a bullish candle.

On the cadet segment, Fincantieri closed ahead more than 11 percent after announcing Thursday that it had improved its 2023 loss to EUR53 million from a loss of EUR324 million as of Dec. 31, 2022. Revenues in the period stood at EUR7.65 billion from EUR7.44 billion in 2022.

Acea took home 5.2 percent, with price at EUR15.72 and updating its 52-week high at EUR15.73.

Maire Tecnimont advanced 0.6 percent, breaking a seven-session downtrend. In recent days, it announced that Tecnimont has been awarded through tender by Sonatrach an Engineering, Procurement, Construction and Commissioning contract for a new linear alkyl benzene sulfonate plant in the Skikda industrial zone, 350 kilometers east of Algiers. The value of the contract is approximately USD1.1 billion

Technoprobe, on the other hand, left 5.6 percent on the parterre, in its sixth bearish session.

Ascopiave, on the other hand, retreated 3.6 percent, following the 1.4 percent red of the previous session, after two positive sessions following the release of good accounts for 2023.

Among the smallcaps, Somec gave up 23 percent after it announced that it had reviewed its pre-closing data for fiscal 2023 and, as a result, revised downward its expectations for 2023, which were published last September. Specifically, the company now expects Ebitda to be below the minimum value in the previously disclosed range by about 25 percent. Net financial position, on the other hand, will be above the maximum value expected from the range by about 20 percent.

Bastogi, on the other hand, gave up 9.6 percent, racking up its fifth session in a row with a bearish candle.

Landi Renzo closed on a negative note with a minus 5.9%, following up on the previous two sessions in the red.

Safilo Group gave up 2 percent after it announced that it has renewed its global license agreement with Missoni for Missoni-branded eyewear until the end of 2029.

Among SMEs, Allcore closed bullish by 4.1% at EUR1.77 per share, rebounding after six bearish sessions.

Strength also on Destination Italia, which closed up 3.9%, breaking a five-session bearish trend.

Pasquarelli Auto closed down 0.2 percent. The company said it signed an agreement on Friday to lease a business unit of Giansante Auto, a dealership for the Fiat, Abarth, Lancia and Fiat Professional brands for the provinces of Chieti and Pescara, as well as a retailer of used cars, founded in 1949.

In 2022 Giansante Auto had revenues of about EUR24.3 million, a negative EBITDA of about EUR1.1 million and a loss of about EUR1.4 million. In 2023, the company activated the negotiated settlement procedure for business crisis resolution. The transaction is aimed at the possible future purchase of Giansante Auto. The rent for the business unit is set at EUR10,000 monthly.

Caribbean Company, on the other hand, gave up more than 14 percent, in its third session at a loss and closing out the segment.

In Asia, the Nikkei closed down 0.1 percent, the Hang Seng rose 3.2 percent, and the Shanghai Composite finished down 0.4 percent.

In New York, the Dow closed in the green 0.1 percent to 38,769.66, the Nasdaq closed in the red 0.4 percent to 16,019.27 while the S&P 500 also finished in the red 0.1 percent to 5,117.94.

Among currencies, the euro changed hands at USD1.0936 against USD1.0948 recorded in Monday's European stock close, while the pound was worth USD1.2807 from USD1.2807 on Monday evening.

Brent crude is worth USD82.58 per barrel versus USD82.45 per barrel at Monday's close. Gold, meanwhile, trades at USD2,176.44 an ounce from USD2,181.00 an ounce on Monday evening.

Tuesday's macroeconomic calendar includes a 12-month Italian BOT auction in Italy at 1110 CET while OPEC's monthly report will be released at 1200 CET.

From the US - at 1330 CET -, the inflation figure will be published while in the evening, at 2230 CET, it will be the turn of the publication of the weekly oil stocks report.

On the corporate calendar - among the many results coming in -, those of Alerion, Caltagirone, ERG, FinecoBank, ItalGas, Saipem, Tod's, and WIIT are noted.

By Chiara Bruschi, Alliance News reporter

Comments and questions to [e-mail]

Copyright 2024 Alliance News IS Italian Service Ltd. All rights reserved.