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The rebound reached yesterday by the Ftse Mib, with a rise of 1.34% after four consecutive sessions of decline, was very short-lived, as it was followed by a return in sales within hours.
Ftse Eb in red after clear retracement from intraday highs
In reality, the blue chip index tried today to follow yesterday’s rise, rising to the 20,150 area, with a nearly 1.5% lead, only to abruptly reverse course.
Indeed, in the afternoon a dragging movement began that saw the Ftse Mb initially reestablish the initial lead and then progressively accelerate downward.
At the end of the session, the index stopped near the 19,550 area, with a decline of 1.54%, the steepest among the European charts.
Ftse Mib dragged by Wall Street: liquidation on Nasdaq
The sell-off that is hitting Wall Street, where the three main indices are in sharp decline, contributed to the fall of the Ftse Mib and the rest of the Old Continent indices.
The worst thing is the Nasdaq Composite that, after updating its historical records almost daily, today suffers a severe blow, leaving almost 4% of its value in the flowerbed, after having touched a loss of close to five percentage points.
Ftse Mib: the reasons that drove sales
The disappointment of some macro data, with special reference to the ISM services index, relative to the non-manufacturing sector, which in August was 56.9 points, down from 58 points, weighs on the trend on Wall Street today. , 1 point in July and below the 57.1 points forecast by the financial community.
An update that signals the great uncertainty of the recovery path of the crashed economy, with companies very concerned about infections and a possible slowdown in demand.
Added to this, as Chris Williamson, Chief Business Economist at Ihs Markit, points out, the uncertainty linked to the US presidential elections which in fact contributes to increasing the risks of the outlook.
He took profit after the bullfight
It goes without saying that the sales that are taking place today in the stock markets are also and above all due to profit taking, which seems more than physiological, especially on Wall Street.
The bullish streak until a few hours ago is incredible if we consider the macro context and in general the general scenario characterized by great underlying uncertainty.
Among the unknowns is also that of the agreement that has not yet been reached in the United States between Democrats and Republicans on a new stimulus package.
In light of this combination of factors, investors prefer to go to the teller and leave room for profit taking.
Ftse Mib and the stock markets: just a pause to the upside?
In this regard David Zahn, head of European fixed income at Franklin Templeton, explains that so far everything has gone well and there has not been much new information, so now the markets are preparing to take profits.
No different is the indication from Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe, who notes that stocks have so far posted an incredible bull run and now need to stop to catch their breath. .
The prevailing hypothesis for the moment seems to be that of a simple pause in the rally, but in any case it is good to move cautiously, awaiting confirmation in this regard.
If this is not the case, it will be necessary to consider a different type of scenario that can be characterized by bearish developments intended to last even beyond the interval of a few trading sessions.
