Investors are closely watching the risk of military escalation in the Middle East, particularly in light of the recent attack by Iran. However, there has been no immediate Israeli response to the attack, leading to a decrease in oil prices by 0.60% after an initial drop of nearly 1% earlier in the day. Since the beginning of the year, oil prices have risen by over 16%. The market is also closely monitoring gold, which continues to hit record highs and is currently trading at $2,374 per ounce. The dollar, another safe haven asset, has halted its recent surge with the euro gaining 0.18% and reaching a value of 1.0661 dollars.
This cautious optimism in the market is also reflected in stock markets, with Milan rising by 1.23%, in line with Frankfurt (+1.14%) and Paris (+0.98%). However, London (-0.26%) has been negatively impacted by the decrease in energy and commodity stock prices. Milan’s stock exchange, Piazza Affari, has experienced a decline over the past two weeks after 10 consecutive weeks of growth, with a 1.61% drop last week. Among the stocks on the FTSE MIB, Prysmian saw the biggest increase by 7.67% after announcing a merger agreement to acquire Encore Wire, a company valued at approximately 3.9 billion euros that produces copper and aluminum electrical cables for energy production and distribution. Stellantis also experienced a significant rise of 3%, while Tenaris (-1.36%) and Terna (-0.99%) saw the biggest declines.
In the United States, futures are indicating a positive start with a 0.52% increase in the S&P 500 futures. The earnings season kicked off on Friday, with Goldman Sachs reporting a 28% increase in profits in the first quarter, surpassing expectations. As a result, the stock rose by 3.4% in pre-market trading. This positive news is likely contributing to the overall sentiment in the market, with investors feeling more optimistic about the economic outlook despite the ongoing geopolitical tensions in the Middle East.
Despite the uncertainties surrounding the situation in the Middle East, investor confidence seems to be holding steady, as seen in the positive performance of various asset classes and stock markets. The focus on safe haven assets like gold and the dollar reflects a cautious approach amid geopolitical risks. Companies like Prysmian and Stellantis are benefiting from positive developments, while others like Tenaris and Terna are facing declines. The positive start to the earnings season in the United States, especially with strong results from Goldman Sachs, is providing a boost to market sentiment and could potentially offset concerns about escalating tensions in the Middle East. Overall, the market is showing signs of resilience and adaptability in the face of global uncertainties.
