PKB's Market Espresso
September 12, 2024

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US CPI - Stickiness persists

Underlying US inflation unexpectedly picked up in August reducing odds for a 50bp cut by the Federal Reserve next week.

  • Core (excluding food and energy) CPI increased MoM 0.3% from July (vs. expectations of 0.2%) and 3.2% YoY. Highest monthly increase in last four months 
  • Main reason is attributable to higher prices in housing and tourism (airfares and hotel stays) 
  • Reading shouldn’t deter Fed from cutting rates at next meeting but traders have now trimmed possibilities of a 50bp cut to near zero
  • PPI (producer price index) released on Thursday is projected to show a tame pace of wholesale inflation

Harris vs Trump debate

The first (and maybe only) US presidential debate hosted by ABC News at the National Constitution Center in Philadelphia was quite interesting

  • Looking at market reaction we can say that Kamala Harris has convinced the public with her messages 
  • Donald Trump stuck to his combative line and offered few surprises 

Next round will see vice presidential contenders (Vance and Walz) go head to head at the very beginning of next month. 

Despite the election debate, one of the most talked news in the presidential race has been the endorsement to Kamala Harris by Taylor Swift.

Unicredit looking at Commerzbank

Unicredit has announced the acquisition of a stake in Commerzbank from the German Government (4.5%), the Italian bank now controls around 9% of the German competitor. 

  • Unicredit seems interested to further increase the stake, aligned with the CEO Andrea Orcel’s philosophy in supporting mergers 
  • Considering the significant business the Italian bank already has in Germany, synergies could make the deal quite appealing
  • Commerzbank’s CEO Manfred Knof has announced that he will step down at the end of his current mandate at the end of December 2025

Sectors in the spotlight

The current situation on the stock markets is very differentiated. Sectors differ from each other more than usual: 

  • Financials, especially Insurances, continue to benefit from good balance sheets despite outlook on rates starts to be less supportive 
  • Healthcare and Utilities are privileged due to their defensive nature 
  • EU Real Estate benefits from general improvement, especially in residential, and the expected rate cuts by central banks
  • US Technology is in a more balanced phase with good business developments leading constantly to higher expectations that become more and more difficult to meet, especially in AI

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The analyses and forecasts contained in this publication are based on assumptions, estimates and hypothetical models which may prove to be incorrect and therefore lead to substantially different results.