Futures cautious; Powell slows on rate cuts

(Alliance News) - Major European indexes are expected near parity Thursday morning, according to IG futures, as investors weigh macro data and statements for clues on new monetary policy decisions by central banks.

Thus, the FTSE Mib is expected to be in the fractional red or 30.0 points, after closing in the green by 0.5 percent at 34,480.87.

In Europe, Paris' CAC 40 is expected to fall slightly or 4.6 points, London's FTSE 100 is given up 0.1 percent or 8.7 points, and Frankfurt's DAX 40 is in the red by 0.2 percent or 23.8 points.

Chairman Jerome Powell reiterated yesterday that the Fed is in no hurry to cut rates but will do so within the year and that the recent jump in inflation has not "materially" changed its policy outlook. "This last statement was enough to make the market rise with glee, commented Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank.

"The Fed may not be in a hurry to cut rates, but investors think it should if it doesn't want to be part of the November election story," the analyst continued. "To simplify things, we will say that the data will decide. But markets do not fully react to the data when Fed members keep talking dovish. And those who say otherwise go unheard. Raphael Bostic of the Fed said he expects only one rate cut this year, after the election. Has anyone heard?"

Meanwhile, inflation in the Eurozone fell more than expected and the unemployment rate remained steady at 6.5 percent against the improvement to 6.4 percent expected by analysts. "The data clearly solidified the expectation of a rate cut in June by the European Central Bank."

"The doves at the Bank of England are also getting the better of the Fed. According to Bloomberg, yesterday the probability of a BoE rate cut was 67 percent, compared with 57 percent for the Fed."

Among Italy's smaller listings on Wednesday evening, the Mid-Cap closed in the green 0.8 percent to 47,946.63, the Small-Cap rose 1.5 percent to 28,582.59, while Italy Growth picked up 0.4 percent to 8,119.51.

On the Mib, FinecoBank took the top spot, closing ahead 6.0% at EUR14.38 per share. On the stock, it is reported that JPMorgan upgraded the stock to 'overweight' from 'neutral' and raised its target price to EUR16.30 from the previous EUR13.50.

Banco BPM advanced 2.1 percent after reporting earlier in the day that rating agency Moody's Investors Service confirmed its long-term deposit rating at Baa1, long-term senior unsecured debt rating at Baa2 and Baseline Credit Assessment at Baa3.

Azimut Holding rose 0.9 percent after reporting Wednesday that it, through its subsidiary Azimut Alternative Capital Partners LLC, has entered into binding agreements with Petershill of Goldman Sachs Asset Management to acquire Azimut's entire stake in Kennedy Lewis Investment Management for a total of USD225 million. Azimut's initial investment in KLIM was USD60 million.

Stellantis, on a negative note, left 1.8 percent on the parterre, on its fourth bearish daily candle.

Hera-equally among the minority of bearish performers-gave 1.7 percent, closing down for the third consecutive session.

On the cadet segment, Fincantieri rose 8.0% doing better than all. The stock updated its 52-week high at EUR0.7670.

Good purchases were also made on OVS, which gained 4.1%. The company announced on Tuesday that it had signed a binding investment agreement with the aim of achieving control and thus 100 percent of Goldenpoint in several stages. The agreement includes an initial investment of EUR3 million, intended to underwrite a convertible bond and the acquisition of 3 percent of Goldenpoint's share capital.

Antares, on the other hand, rallied 4.8 percent, breaking a six-session downtrend.

Iren--which closed the listing down 3.5 percent--reported that it has signed a binding investment agreement to acquire a 50 percent stake in the share capital of a NewCo, into which the operating branches of EGEA, EGEA Commercial and EGEA Production and District Heating will be transferred. The NewCo will be 50 percent owned by Iren through a EUR85 million capital increase that it will underwrite and release at the closing of the transaction, and the other 50 percent by a MidCo, whose share capital will be wholly owned by EGEA.

Technoprobe, on the other hand, gave up 2.9 percent, after a 0.5 percent green in the previous session.

Among smallcaps, Seri Industrial advanced 20 percent after reporting that it closed 2023 with a net loss of EUR6.3 million, which compares with a net loss of EUR3.4 million in 2022. However, the stock benefited from improved margins, with Ebitda rising to EUR22.9 million from EUR17.4 million.

CY4Gate - up more than 13 percent - reported Wednesday that it had signed a contract worth more than EUR6.5 million in total for the execution of a series of projects in the defense sector with ELT Group.

Good purchases were also made on Eurogroup Laminations-after declining 0.5 percent on the eve-which was priced at EUR4.20 per share, up 12 percent.

Fidia, on the other hand, gave up 3.6 percent to EUR0.29. The company announced Thursday that Monica Donzelli has resigned from the company's board, where she served as a non-executive and non-independent member.

Exprivia--flat at EUR1.67--reported that its board of directors approved the plan to merge Exprivia into Abaco3.

Among SMEs, boost on Estrima, which led the price up more than 16 percent, after two sessions of declines.

SolidWorld Group climbed 8.7 percent after announcing Wednesday that its subsidiary SolidFactory has entered into a new contract with a North American player for the complete supply of an innovative line for the production of advanced technology solar panels. With this order, SolidFactory's backlog stands at EUR4.9 million at the end of March, according to unaudited company management figures.

TraWell Co rallied 0.5 percent after announcing Tuesday that it has signed a letter of intent that includes a three-month exclusive to take over a company active in traveler services in northern Europe. The target company-whose name was not disclosed by TraWell-has revenues of EUR3 million to EUR3.5 million, an adjusted Ebitda margin of 13 percent, and a positive cash position.

Elsa Solutions gave up 3.6 percent, breaking a four-session downtrend.

Alfonsino, on the other hand, left 6.4 percent on the parterre, with nuvo price at EUR0.55, with recent figures showing a net loss of EUR1.4 million for 2023 compared to a net loss of EUR1.9 million in 2022.

In Asia, the Nikkei closed up 1.0 percent at 39,840.12 as the Chinese and Hong Kong financial exchanges were closed for holidays.

In New York, the Dow closed down 0.1 percent, the Nasdaq up 0.2 percent, and the S&P 500 gained 0.2 percent.

Among currencies, the euro changed hands at USD1.0845 from USD1.0829 in Wednesday's European stock close while the pound was worth USD1.2654 from USD1.2630 last night.

Among commodities, Brent crude is worth USD89.54 a barrel from USD89.84 last night while gold trades at USD2,296.52 from USD2,285.30 on Wednesday night.

Thursday's economic calendar opens with services PMIs, coming in for Spain, Italy, France, Germany, the Eurozone and the UK, between 0915 CET and 1030 CET.

At 1330 CET, the European Central Bank will release the minutes of its latest monetary policy decision.

At 1430 CET, from the US, the trade balance and initial unemployment benefit claims are due.

At 1815 CET, Barkin of the FOMC will speak, followed at 2000 CET by Mester.

Among the companies in the Square, the results of Esautomotion and Poligrafici Printing are expected.

By Chiara Bruschi, Alliance News reporter

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