The price of oil has increased on the markets following the assassination of Hamas leader Haniyeh. The Brent crude, which is a reference for international markets, has risen by 3.05% to $80.5 per barrel (October 2024 futures). In the past month, the price had dropped by 7% from an initial value of $87, mainly due to the slowdown in the Chinese economy. Investors are now awaiting the Federal Reserve’s decision on interest rates, which is set to be announced at 8:00 pm. Today, the ADP agency released estimates on the non-farm payroll figures in the United States, showing a decrease to 122,000 jobs created in July from 155,000 in June, below the expected 147,000. Additionally, the quarterly labor cost index was slightly below expectations at +0.9% instead of +1.0%. These two data points could increase the likelihood of a rate cut in September by the Fed. On Wall Street, indices are sharply up with the S&P up 1.70% and Nasdaq up 2.53%. Microsoft’s stock fell by 1.49% after reporting better-than-expected earnings but slightly disappointing cloud revenue. However, Nvidia, one of the top seven stocks, has rebounded by 11% today after being named the top stock choice in the chip sector in the US by Morgan Stanley.
In Milan, the FTSE MIB index dropped by 0.46% with stocks moving in the opposite direction compared to the previous day. Bank stocks are down, with Banca Popolare di Sondrio showing the biggest decline at -3.16%. Other decliners include Leonardo (-2.78%) despite a strong increase in revenues and orders in the last quarter, as well as Fineco (-2.73%) and Telecom Italia (-1.73%). On the other hand, Amplifon is up by 4.37%, followed by Recordati, Campari, and Diasorin, which had declined yesterday after their quarterly reports. The murder of Haniyeh may be contributing to the rise in oil prices, as geopolitical tensions often result in fluctuations in the energy markets. Additionally, the anticipation of the Federal Reserve’s interest rate decision is causing uncertainty among investors, who are closely monitoring economic indicators to gauge the possibility of a rate cut in September. The job figures in the US are also crucial in this context, as they provide insight into the health of the economy and influence the Fed’s monetary policy decisions.
On Wall Street, the sharp increase in indices reflects positive market sentiment despite the uncertainties surrounding the Fed’s interest rate decision. Microsoft’s stock decline is notable, contrasting with the strong performance of Nvidia, which has gained after being recommended as a top pick in the chip sector by analysts. In Milan, the negative performance of bank stocks is dragging down the FTSE MIB index, with Banca Popolare di Sondrio facing the steepest decline. Despite strong quarterly results, companies like Leonardo, Fineco, and Telecom Italia are also trading lower. On the other hand, Amplifon and other stocks are showing gains, indicating mixed performance in the Italian market. The overall market trends suggest a cautious approach by investors, who are closely monitoring geopolitical events and economic data for guidance on future investment decisions.
The relationship between geopolitical events, economic indicators, and market performance is evident in the current situation, with the assassination of Haniyeh impacting oil prices and the Fed’s interest rate decision influencing market sentiment. The job figures in the US are also playing a crucial role in shaping investor expectations regarding monetary policy. The divergent performances of individual stocks, such as Microsoft and Nvidia, demonstrate the importance of company-specific factors in driving market movements. In Milan, the contrasting performance of different sectors highlights the complexities of the Italian market and the challenges faced by investors in navigating these dynamics. Overall, the market outlook is shaped by a combination of global events, economic data, and company performance, requiring investors to carefully assess these factors to make informed decisions.
