The FTSE MIB index has crawled back this week, rising in the past seven days and reaching its highest level since November 6. The index, which tracks the biggest companies in Italy, rose to €34,625, up by 6% from its lowest level in November.

Why Italian stocks are soaring

The FTSE MIB index has joined other European indices like the DAX 40 and IBEX 35 in staging strong rally.

Most of these gains accelerated after economic data from the region showed that the economy was not doing well. 

The manufacturing and services PMI numbers remained below 50, signaling that the sectors were contracting. 

More data released recently showed that the economy expanded by 0.4% in the third quarter after contracting in the previous quarters. 

Broadly, many European companies are struggling because of their exposure to China, a struggling economy. Manufacturers are also contending with higher energy costs than in other countries.

European stocks have also done well because of the relatively weaker euro. The EUR/USD exchange rate has dropped from the September high of 1.1200 to the current 1.0575. 

Top performers in the FTSE MIB index

Most companies in the FTSE MIB index have done well this year. Banks have led the charge as higher interest rates have made them more profitable this year. 

Bper Banca, which has over 4.3 million customers, was the best-performing companies as the stock jumped by 100%. This growth was mostly because of its strong financial results. 

The most recent earnings showed that Bper’s net profit jumped to over €412 million in the third quarter, a 6.3% QoQ increase. It also reported an improvement in its CET1 ratio, which rose to 15.8%. This ratio means that the company has adequate resources that could see it increase its dividends. 

Banco Bpm, another bank with over 4 million customers, has also done well as its stock jumped by 57% this year. This rally happened as the company reported strong financial results, helped by higher interest rates.

Banca Monte dei Paschi, the world’s oldest bank, rose by over 108% this year. The other notable gainers were companies like Ferrari NV, Poste Italiene, Iveco, Unicredit, and Prysmian.

Unicredit has become one of the best-performing banks in the past few years, helped by its strong earnings and dividends. In one of its most ambitious targets, the company has accumulated more Commerzbank shares, a move that may let it acquire the bank.

Not all companies in the FTSE MIB index have done well this year. Stellantis, the giant automaker that owns Fiat, Jeep, and Chrysler, has collapsed by 40% this year. The company, which forced its CEO out, is going through a major slowdown as demand wanes. Its retreat has coincided with that of other companies like Volkswagen and Renault.

Telecom Italia stock has dropped by almost 20% this year, while Eni, Campari, Amplifon, ERG, STMicroelectronics, and Nexi have plunged by over 20% this year.

FTSE MIB index analysis

The daily chart shows that the FTSE MIB index has rallied in the past few days. It has rallied above the 50-day and 100-day Exponential Moving Averages (EMA).

Most importantly, the index has formed an inverse head and shoulders pattern, a popular bullish sign. In most periods, this is one of the most bullish patterns in the market. 

The FTSE MIB index stock’s Relative Strength Index (RSI) and the MACD indicators have all pointed upwards. 

Therefore, because of the inverse H&S pattern, the index will likely continue rising as bulls target the key resistance at €36,000. More gains will be confirmed if the stock rises above the neckline at €35,250.

The post FTSE MIB index forms an extremely bullish chart pattern appeared first on Invezz

The IBEX 35 index has continued soaring and is hovering at its highest level since January 2010. It has jumped by almost 110% from its lowest level in March 2020, mirroring the performance of other global indices.

ECB interest rate cuts

The IBEX 35, which tracks the performance of the biggest Spanish companies, has risen by over 20% this year. This rebound coincided with that of other popular European indices like the German DAX and Italian FTSE MIB. 

The rally happened as the European Central Bank (ECB) and other global central banks started cutting interest rates. In Europe, the ECB has delivered three rate cuts this year, and analysts expect it to do the same next week.

The ECB’s cuts are because there are signs that the European economy is slowing. Data released this week showed that the manufacturing and services PMI numbers remained below 50 in November. A PMI reading of less than 50 is a sign that sectors are not doing well.

Spain has been a better performer this year, helped by the surge in the tourism sector. The manufacturing PMI was 53.1 in November, slightly lower than the median estimate of 53.9. Similarly, the services PMI came in at 53.9 during the month.

The IBEX index has also done well because of the actions of other central banks. In the United States, the Fed has cut rates two times this year, bringing the total cuts to 75 basis points. 

In Switzerland, the Swiss National Bank (SNB) has delivered several rate cuts this year, a trend that may continue.

Stocks tend to do well when central banks are slashing interest rates because it leads to a rotation from the bond market.

Additionally, unlike companies in France’s CAC 40 index, those in the IBEX are not exposed to the struggling Chinese economy. 

Top IBEX index performers

Most companies in the IBEX 35 index have done well this year. IAG stock price has jumped by 91% this year, making it the best-performing company in the IBEX 35 index this year.

IAG is a giant company that owns popular brands like British Airways, Iberia, Vueling, and Aer Lingus. It has done well this year as demand for its services rose, pushing it to resume dividend payouts to investors. IAG’s rally has mirrored that of other airline companies like United Airlines, Delta, and United.

Spanish banks have also helped the IBEX 35 index continue rising. Unicaja Banco shares are up by 47% this year, while Banco de Sabadell has jumped by 72%. Sabadell has rallied after BBVA launched a hostile takeover for the company. 

The other top-performing companies in the IBEX index this year are Inditex, Ferrovial, Caixabank, Logista, and Aena.

On the other hand, the worst performers in the IBEX 35 index are Solaria, Grifols, Naturgy Energy, Repsol, and Inmobilaria Colonia.

IBEX 35 index analysis

IBEX chart by TradingView

The daily chart shows that the IBEX 35 index has been in a strong uptrend in the past few weeks. It has now rallied above the key resistance level at €12,036, its highest level this year. Moving above that level saw it invalidate the double-top chart pattern.

The index has moved above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) and the MACD indices have continued rising in the past few days. 

Therefore, there are rising odds that the index will continue rising as bulls target the key resistance at €12,453, the upper side of the ascending channel. A break above that level will point to more gains to €12,500.

The post IBEX 35 index is rising: here’s why Spanish stocks are soaring appeared first on Invezz

Unicredit share price has done well in the past few years, making it one of the best-performing global banks. The UCG stock has jumped by 680% from its lowest point in 2020, bringing its market cap to over €64.48 billion. It has become the 39th biggest bank in the world.

Top Unicredit news

Unicredit, the giant Italian bank, has made headlines in the past few weeks, helped by its corporate actions. 

Notably, the company has offered to buy Banco BPM, another top Italian bank in a €10 billion deal. 

The biggest deal that Unicredit has made is its accumulation of Commerzbank shares. It has bought shares worth billions, making it the biggest shareholder in the bank. A move to acquire Commerzbank would be notable because it is the second-biggest bank in Germany after Deutsche Bank.,

Still, it is unclear whether Andrea Orcel will follow through with a full buyout of Commerzbank, a move that the German government resists. In a statement this week, Joerg Kukies, the German Finance Minister said:

“We have a very critical stance on this, and the head of Unicredit has said he does not want to ignore the criticism of the German government, so I expect that he won’t do it.”

A bid by Unicredit to acquire Commerzbank would be notable because of its size. It is a giant corporation with a market cap of over €18.90 billion and €631 billion in assets. 

Read more: How Unicredit share price outperformed European banks

Unicredit business is doing well

These corporate actions are happening at a time when Unicredit’s business is doing well, helped by higher interest rates and cost structure. 

Its most recent results showed that the company had its fifteenth consecutive quarter of profitable growth. 

Its net revenue rose by 2.6% to over €5.9 billion in the third quarter. This revenue growth brought its nine-month revenue to over €18.5 billion, a 5.4% increase from the same period last year. 

The net interest income dropped slightly to €3.5 billion, mirroring the performance of other banks. Its trading revenue fell by 7.7% to €441 million, while its fees and LLP revenues jumped by 8.5% and 19%. 

Most importantly, Unicredit’s Return on Tangible Equity (RoTE) rose by 1.5% to 19.7%. The company’s balance sheet is also strong, with the closely-watched CET1 ratio rising by 47 basis points to 16.1%.

The CET1 ratio is an important number that looks at the amount a company has in relation to its risk-weighted assets. A higher ratio means that a company can handle a major financial crisis.

Unicredit’s higher CET ratio also explains why the company is doing its corporate activities. In contrast, companies like JPMorgan has a ratio of 15.3%, while Bank of America, Goldman Sachs, and Citigroup have less than 15%.

Unicredit has also boosted its payouts to investors. The most recent results showed that it paid a dividend of €1.4 billion and acquired shares worth €2.4 billion. It also boosted its annual profit target to €9 billion.

Unicredit share price analysis

The daily chart shows that the Unicredit stock price has bounced back in the past few days. This rebound happened after it bottomed at €35.50 on November 27. That was an important level since it coincided with the lower side of the ascending trendline that connects the lowest levels since December 2023.

The stock has jumped above the 50-day and 100-day Exponential Moving Averages (EMA). It is attempting to move above the key resistance point at €40, while the Relative Strength Index (RSI) pointed upwards.

Therefore, the stock will likely continue rising as bulls target the key point at €44, the upper side of the channel. This prediction implies an 11% upside from the current level.

The post Here’s why the Unicredit share price is beating rivals appeared first on Invezz

The US labor market is poised for a significant rebound in November, following October’s storm-induced slowdown.

Economists are optimistic about a sharp recovery, with consensus estimates pointing to a net gain of 207,500 jobs.

The Bureau of Labor Statistics (BLS) will release its November jobs report at 8:30 a.m. ET on Friday.

This anticipated recovery contrasts sharply with October’s meager addition of just 12,000 jobs—the smallest increase in nearly four years.

Back-to-back hurricanes and a major labor strike were key contributors to the weak showing, which economists now view as an outlier.

Despite the turbulent month, the unemployment rate is expected to remain unchanged at 4.1%, consistent with levels seen since September.

Dan North, senior economist for Allianz Trade, noted the extraordinary circumstances of October. “I told my readers to essentially disregard last month’s report,” he told CNN.

“The BLS itself admitted that the hurricanes and strikes rendered the data inconclusive. A substantial bounce back in November is not just likely but rational,” he said.

November recovery reflects labor market resilience

November’s expected gains suggest a return to the labor market’s underlying strength.

Gus Faucher, chief economist at PNC Financial Services Group, predicts job growth of 250,000 positions for the month.

This figure points to a baseline monthly payroll increase of approximately 150,000 jobs, excluding the recovery from October’s anomalies.

“That’s a solid number,” Faucher told CNN. “It reflects a healthy labor market supporting income growth, which, in turn, drives consumer spending.”

Several indicators reinforce the view that the labor market remains robust.

Layoff activity has remained historically low, with unemployment claims trending downward in recent weeks.

The Job Openings and Labor Turnover Survey (JOLTS) for October showed a rise in job openings to 7.7 million, up from 7.4 million in September, surpassing economists’ expectations of 7.5 million.

Labor trends: Layoffs low, hiring steady

The labor market has shown resilience in the face of external pressures.

Layoff announcements for November totaled 57,727, a modest 3.8% increase from October, according to Challenger, Gray & Christmas.

Meanwhile, the layoffs and discharges rate remained at 1% in October—close to an all-time low.

“Overall, we still have a tight labor market,” said Faucher. “Employers are cautious about laying off workers, even if they are scaling back on new hires.”

First-time filings for unemployment benefits rose slightly last week, reaching a six-week high of 224,000.

However, continued claims for unemployment insurance, which reflect the number of people receiving benefits for a prolonged period, declined, suggesting no significant spike in joblessness.

Another positive sign is the increase in voluntary quits.

While the number of workers quitting their jobs rose by 228,000 in October to 3.3 million, it remains below year-ago levels.

This indicates that employees feel confident enough to seek better opportunities, a hallmark of a strong labor market.

Federal Reserve policy: Rate cuts likely to continue

Despite expectations of strong job growth in November, the Federal Reserve is unlikely to deviate from its current course of interest rate cuts.

Market participants are pricing in a 74% probability of a quarter-point rate reduction at the Fed’s December meeting, according to the CME FedWatch Tool.

Russ Brownback, head of global macro positioning at BlackRock, views the Fed’s current policy stance as restrictive.

“The real policy rate, after adjusting for inflation, is higher now than it was in mid-2023, even though inflation has significantly eased,” he explained.

The Fed’s preferred inflation gauge, the core personal consumption expenditures price index, showed a 2.8% year-over-year increase through October.

While this is below its 2022 peak, it remains above the central bank’s 2% target.

Fed Chair Jerome Powell acknowledged the balancing act during a recent appearance at The New York Times DealBook Summit.

“We’re not quite there on inflation,” Powell said. “But the economy is in very good shape, and we’re now on a path to bring rates back down to a more neutral level over time.”

Stock market strength and economic optimism

The strong labor market and resilient economy have buoyed investor sentiment.

Major stock indices, including the Dow Jones Industrial Average and S&P 500, reached record highs this week.

The S&P 500 has surged 27.6% year-to-date, driven by robust corporate earnings and consumer spending.

Yardeni Research has turned more optimistic about the labor market’s outlook.

The firm projects an average monthly job growth of 200,000 over the next quarter, citing improved hiring trends as the economy normalizes post-pandemic.

“We’ve argued all year that the labor market was recalibrating from the unsustainable hiring spree during the pandemic,” Yardeni Research noted in a recent report.

“Now, we see signs of renewed momentum.”

The post Friday’s jobs report: likely outcome and why it may not stop Fed’s December rate cut appeared first on Invezz