Rally expected after Fed and before ECB and BoE

(Alliance News) - Traders particularly liked the forecast that the Federal Reserve will cut rates at least three times in 2024 after leaving them unchanged last night.

In fact, futures are showing broadly positive sentiment in European markets, with sharp rises expected for the Old Continent's major exchanges.

The FTSE Mib is given up 332.5 points or 1.1 percent after closing Wednesday down 0.2 percent at 30,295.69.

London's FTSE 100 is given up 70.5 points or 0.9 percent, Paris' CAC 40 is expected up 87.5 points or 1.2 percent, and Frankfurt's DAX 40 is indicated up 192.4 points or 1.1 percent.

Federal Reserve Chairman Jerome Powell signaled that interest rates have peaked after the U.S. central bank's projections showed officials expected three monetary policy cuts in 2024.

Powell's comments came after the Federal Open Market Committee's decision to extend the pause in monetary policy in effect since July, leaving the federal funds rate range at a 22-year high between 5.25 percent and 5.5 percent.

"A rate hike is no longer the base scenario as it was 60 or 90 days ago," Powell told reporters.

Last night, in Piazza Affari, the Mid-Cap gave up 0.1 percent to 42,569.09, the Small-Cap lost 0.4 percent to 26,485.71, and Italy Growth dropped 0.4 percent to 8,039.08.

On the Mib, Leonardo took the top spot with a 4.3% rise and new price at EUR14.43

Amplifon - up 3.4 percent - on Wednesday disclosed that it has signed a binding agreement that will allow the company to enter Uruguay through the acquisition of the Audical Group, the leading national player in the hearing care sector. The Audical network, with the Audical and Centro Auditivo brands, consists of 25 direct outlets and various distributors located throughout the country, has annual sales of about EUR10 million, which have been growing steadily in recent years, and about 130 employees and collaborators.

Enel's buyback plan continues steadily, gaining 1.0 percent. The company announced Tuesday that it bought back 309,000 of its own shares in the period from December 4 to 8, for a total value of EUR2.0 million.

Increased price target for Banco BPM, raised to EUR6.10 from EUR6.00 by HSBC. In contrast, JPMorgan cut it to EUR5.90 from the previous EUR6.40. The stock lost 1.6 percent to EUR5.0080, the subject of profit-taking after three bullish sessions.

Saipem closed up 0.4 percent after shareholders authorized the convertibility of the equity-linked bond issued in September into ordinary shares of the company.

The loan in question will mature in September 2029 and has a nominal amount of EUR500 million.

Telecom Italia - down 3.7 percent - and Amazon.com announced Wednesday that they have expanded a content distribution agreement that allows TimVision to become the first streaming platform in Italy to offer Amazon Prime's soccer and entertainment offerings included in its bundles along with Disney+, Netflix, DAZN and Infinity+.

On the Mid-Cap, Salvatore Ferragamo gained 0.3 percent. JPMorgan cut its target price to EUR10.50 from EUR13.50 with an 'underweight' recommendation while Société Générale raised its price target to EUR10.00 from EUR9.00, confirming its advice to sell the shares.

Target price cut also for another fashion name, Tod's, to which JPMorgan raised the price target to EUR35.00 from EUR38.00, keeping unchanged a 'neutral' view on the stock, which closed down 0.5 percent.

Sesa - down 0.9 percent - announced Wednesday that it has acquired through its subsidiary Var Group an additional stake in Essedi Consulting, rising from 19 percent to 60 percent of the share capital, and expanding its expertise in application consulting on the Sap platform to support the digital transformation of Made in Italy districts, the company explained in a note.

The acquisition of Essedi Consulting was made through Var BMS, a subsidiary of Var Group and a key player in the Sap market in Italy, thus contributing to the formation of a competence hub in the sector with about EUR60 million in revenues and about 400 human resources.

Among small-cap companies, Bioera is not stopping the bullish run that has led it to double its share value in the past 10 days. The stock gained 29 percent today, with as many as 1.4 million pieces changing hands.

The most heavily traded, however, was Eems Italia, which closed up 3.7 percent, with 26.3 million shares traded.

On the SME list, ErreDue closed up 2.6 percent after announcing an agreement with the company Foglia Umberto to supply a 1 MW PEM electrolysis plant that will be delivered in 2025 and used for the production and storage of green hydrogen within the Waste Disposal Plant Pole to be built in the municipality of Guglionesi, Molise.

The green hydrogen produced by the PEM electrolyzer will be stored and then reused to produce heat for use within the hub.

Unidata finished up 0.8 percent after making it known that it is part of the Temporary Grouping of Companies - composed of Boldyn Networks, Unidata, IFM Spa and Cecchini - awarded the concession contract with the Municipality of Rome for the implementation, management, operation and maintenance of 5G and Wi-Fi infrastructure in the territory of Roma Capitale. The #Roma5G project was awarded through a Public Private Partnership and the related concession will last for 25 years.

Ilpra announced that it has opened through its Dubai branch Ilpra Middle East in Saudi Arabia. The latter opened a trading subsidiary in Jeddah, Saudi Arabia, called Ilpra Arabia, which is 100 percent owned by Ilpra Middle East. Ilpra's stock closed at parity.

In Asia, the Nikkei closed Thursday down 0.7 percent to 32,686.25, the Shanghai Composite lost 0.3 percent to 2,958.99, and the Hang Seng gained 0.7 percent to 16,347.29.

In New York, the Dow closed Wednesday up 1.4 percent to 37,090.24, the Nasdaq rose 1.4 percent to 14,733.96 and the S&P 500 gained 1.4 percent to 4,707.09.

Among currencies, the euro changed hands at USD1.0899 against USD1.0793 recorded in Wednesday's European stock close while the pound is worth USD1.2638 from USD1.2527 last night.

Brent crude is worth USD74.66 per barrel versus USD73.20 per barrel at Wednesday's close. Gold, meanwhile, trades at USD2,034.90 an ounce from USD1,980.52 an ounce last night.

Thursday's macroeconomic calendar includes Spain's inflation, at 0900 CET, and the IEA monthly report, at 1000 CET.

The highlights of the day will be the decisions of the European Central Bank and the Bank of England, which will release their latest monetary policy decisions, before the U.S. retail sales and jobless claims data, due at 1430 CET. For the ECB, the president, Christine Lagarde, will also speak at 1445 CET.

At 1630 CET, focus on U.S. corporate inventories, and at 2230 CET, the focus will be on the balance sheet and reserves at the Fed.

Among the companies in the Piazza Affari, no special events are planned.

By Giuseppe Fabio Ciccomascolo, Alliance News senior reporter

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