Piazza Affari closes higher but loses ground over the week, spread tops 80 points
The FTSE Mib gains 0.67% to 52,616 points in the August 28 session and gives up 0.1% over the week. In New York, futures remain flat ahead of the Fed chair's speech at Jackson Hole.
The August 28 session in Milan closes with a gain that does not offset the week. The FTSE Mib rose 0.67 percent to close at 52,616 points, but over the five days the main index remains down 0.1 percent. The figure that better explains the day, however, is another one: trading volume fell to 2.49 billion euros, down from 3.06 billion on Thursday. A market that rises on falling volumes is a market that moves little and with few participants, typical of late August.
| Indicator | Value on August 28 |
|---|---|
| FTSE Mib | 52,616 points (+0.67%) |
| Weekly change | −0.1% |
| Trading volume | €2.49 bn (from 3.06) |
| Btp-Bund spread | over 80 basis points |
| 10-year Btp yield | over 4.1% |
On the bond front, the spread between Btp and Bund widened past 80 basis points and the yield on Italy’s ten-year bond returned above 4.1 percent. This happened on the day of the placement of the new bond maturing October 2036: the coincidence between the issuance and the widening of the spread is a fact, not an explanation, and the available sources do not establish a link between the two.
Among stocks, Leonardo was the worst performer on the main index with a decline of 3.96 percent to 52.87 euros; Enel closed up 0.98 percent. At 5:45 pm, bitcoin had fallen below $79,000, the euro was trading at $1.16, and gold stood at $4,610 an ounce. These figures come from Borsa Italiana’s closing data as reported by SoldiOnline: the report currently comes from a single source; no independent confirmation is available for the session commentary.
Wall Street looks to Jackson Hole
In the United States, the day was one of waiting. Futures on the S&P 500 remained largely unchanged, with the index nonetheless on track to close the week higher, while Nasdaq 100 futures gave back part of the gains triggered by Nvidia’s forecasts — the earnings report this newspaper covered in this morning’s edition.
The event on which operators were focused is the speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium, from which indications were expected on the economic outlook and on the strategy for bringing inflation back to target, according to the account by Bloomberg. The backdrop is the PCE price index, the US central bank’s preferred measure, which came in for July slightly higher than expected, as indicated in the economic calendar from Kiplinger based on data from the Bureau of Economic Analysis.
The PayPal case
The single most violent move of the day involved PayPal, which at one point lost 16 percent in pre-market trading after Advent and Stripe withdrew from the deal for the company. It is a measure of how much weight the prospect of an extraordinary transaction carried in the price: when the prospect fades, the stock gives back in a single session what the anticipation had built up.
What we don’t know
The sources consulted do not report the content of Warsh’s speech, nor the reaction of US markets at the close. They do not indicate the amount placed and the yield of the new Btp maturing October 2036, nor the reasons communicated by Advent and Stripe for withdrawing from the PayPal deal. This newspaper does not offer its own assessments on stocks, indices, or financial instruments.
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