In Piazza Affari the slowdown stockof the banks weighs heavily. Timi runs while waiting for the bills.

US inflation drops slightly to 4.9%, the lowest in the last two years, from 5%. Index components that contributed to the drop in the cost of living: airline tickets -2.5%, new cars -0.2%, communications -0.1%. These indications should lead the Federal Reserve to confirm the rates reached in March in June. Expectations of a rate cut already in July are increasing and bond yields are falling. The yield on the 10-year Treasury Note moved to 3.45%, -6 basis points. The biennial is at 3.95%.

The Ftse Mib index segba -0.71% to 27,195 points. Piazza Affari continues with a downward trend despite the data that certifies the slowdown in inflation in the United States. Bank stocks show a decline on the list, with Bper losing 1.49% the day after the accounts. Down Bpm (-3.80%) which yesterday had ripped on the price, Mps -2.41%, Intesa -1.61%, Unicredit -1.68%. Asset management down with Mediolanum -2.22% after the positive quarterly. In energy, on the other hand, Enel fell by 0.38%. Tim rises again, showing a +3.07% pending the accounts.

INFLATION GERMANY
Inflation in Germany fell again in April to 7.2% year-on-year from 7.4% the previous month, helped by calm energy prices. According to data from the Destatis institute, the indicator continues to fall compared to the peak reached last autumn at 8.8%. Serving as a reference for the European Central Bank, the harmonized price index is 7.6% in April over a year, against 7.8% in March.

DEBT CAP

Black smoke at the White House summit between Joe Biden and congressional leaders. At the end of the meeting, which lasted about an hour, House Speaker Kevin McCarthy said he had not seen “any new movement” and continued to ask the president to cut spending on an agreement to raise the debt. Biden, who would like to avoid getting too close to early June, when according to the Treasury the government will run out of funds, in his post-summit comment, opened up the possibility of a change in his diplomatic agenda. The Asia tour that includes the G7 in Japan, the Quad leaders’ summit in Australia, with a stop in Papua New Guinea, the first by a US president in the country, could be lightened. The confrontation must continue but not under the threat of default, continued Biden, without ruling out an increase in the short-term ceiling and evoking permits for energy projects as the subject of possible negotiations.

The CSI 300 index of the Shanghai and Shenzen stock exchanges loses 1%.

The data on the trade balance released last night, in particular the fall in imports in April, has fueled some doubts about the strength of Chinese domestic demand, above all because the -8% in April is due to the reduction in demand for raw materials, such as steel and copper.

Robert Secker, Portfolio Specialist, T. Rowe Price, addressed these doubts yesterday in a note on China’s stock market prospects. First, Secker cautions against leaving out the larger mega-caps, to which the bulk of investor flows are directed.

Opportunities are found in the vast universe of over 6,500 companies listed in Shanghai, Shenzen and Hong Kong, almost all of them “little studied and little owned”. The manager points out the opportunities present in the automotive sector, “one of those where change is happening rapidly”. Indeed, Chinese consumers who are moving from Internal Combustion Engine Vehicles (ICEs) to Electric Vehicles (EVs) are showing a clear preference for domestically produced EVs, which are considered to be cutting-edge, or on par with those of European brands. , Japanese, Korean or US. Going even more specifically, Secker indicates that the companies present in the electric car supply chain are interesting, an area “in which China probably benefits from being the most complete and competitive in the world”. These companies that are on the right side of the product cycle can experience very rapid growth in a short period of time.”

RATES, CURRENCIES AND COMMODITIES

Bonds have moved very little in the last few hours, even if these are days of great activity in terms of corporate debt issuance. Apple issued a $5.25 billion loan on Monday, Merck a $6 billion one.

Meanwhile, hedge funds increased their bearish bets on Treasuries to historic levels in the week to May 2. It is, Bloomberg noted yesterday morning, the seventh consecutive week of increase in bearish bets, the longest since 2017. The bearish positions of hedge funds on US government bonds contrast with those of Wall Street giants, from Morgan Stanley to Jp Morgan Chase who believe that fixed income securities are the safest investment.