The mood in Piazza Affari worsens, with the Ftse Mib slipping again below the threshold of 34 thousand points. After an uncertain start, the main Milanese index now falls to 33,931.33 points (-1.24%). The markets are digesting the indications coming from the Fed which kept rates stable (as expected), indicating however only one rate cut in 2024 (there were three indicated in the March dot plot).
“The median dot plot projection has taken a hawkish trajectory, so much so that it now points to just one rate cut in 2024, compared to three cuts previously expected in March. While slowing core CPI inflation may partially ease the market’s hawkish sentiment, driven by solid jobs data released last Friday, the Fed’s path to a rate cut depends on continued easing of inflation and further rebalancing. of the job market,” comments Whitney Watson of Goldman Sachs Asset Managerst.
Among the stories of the day Telecom Italia after Moody’s upgrade, but also Stellantis on investor day.
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Tim remains positive after Moody’s upgrade
It still remains in positive territory but limits the increases seen at the start of Tim. The title of the group led by Peitro Labriola took off at the top of the Ftse Mib in the early stages of the session under the pressure of the promotion arrived yesterday from Moody’s. The US rating agency raised the rating to Ba3 from B1, with a positive outlook. The upgrade arrived a few weeks after the European Antitrust gave the unconditional green light to the NetCo operation.
“The upgrade to Ba3 reflects the significant improvement in the company’s financial profile thanks to the expected debt reduction of over 14 billion euros, which will more than offset the deterioration of its business profile,” says Ernesto Bisagno, senior credit officer of Moody’s and lead analyst of Telecom Italia.
Stellantis on the fund on investor day
Trading in decline for Stellantis, among the worst stocks of the Ftse Mib in the company of Iveco Group. Today for Stellantis the first investor day in Auburn Hills, Michigan, during which CEO Carlos Tavares will illustrate the key strategic elements on which the company will pivot in the future. Updates will then be provided on the company’s regions, functions and brands.
In the meantime, the market is focusing on a few financial indications. In detail, for the first half of the year Stellantis sees an Aoi (adjusted operating income) margin of 10%-11%, with industrial free cash flow “significantly lower than the same period of the previous year”. For the whole of 2024, the European auto giant has confirmed its financial objectives for 2024 and the plan for the return on capital: with a double-digit adjusted operating income (“AOI”) margin and positive industrial free cash flow , with the return on capital plan which provides for a distribution of equal to or greater than 7.7 billion euros in dividends and share buybacks in 2024.
Stellantis also updated its capital plan: In 2025, the company will target the high end of the 25-30% range of its dividend payout policy, up from 25% in recent years. “By setting liquidity levels with a target of 25-30% of revenues for the medium term, we shift the focus to capital efficiency and support strong returns for shareholders,” reads the Stellantis statement.
Meanwhile there is also the duties question. The European Commission has communicated the preliminary results of the anti-dumping investigation on Chinese cars imported into Europe, raising duties on imported Chinese electric cars (from 10% to 27%-48%).
They focus on the topic Equita analystsaccording to whom, as regards Stellantis “the news has a net positive impact” And he lists two reasons: the first, “the group does not have production capacity in China used to export cars to Europe” and “we never expected a significant penetration in the European market of Leapmotor models produced in China which will be sold in Europe through the Stellantis distribution network starting from September 2024”.
