Ahead of the FOMC meeting, markets face a paradoxical situation, with positive economic data seen as negative because they will encourage central banks to continue with their restrictive monetary policies, and negative economic data seen equally as negative because that will indicate a recession with a fall in company profits.
The nervousness in the market is evident, with the United States 2-Year bond at a record yield of 3.88%, which is interesting given its low duration. As I said earlier, the US and Europe are doomed to a recession.
The rating agencies are also considering a possible recession, with Fitch bringing its estimate of Italy's GDP in 2023 to -0.7%, from + 1.9%. The Atlanta Fed has reduced the forecasts on the GDP of the United States in the third quarter to + 0.5% from the previous + 1.3%.
To make the market picture more gloomy, FedEx (NYSE:FDX) lost 17% after-hours.
The shipping giant withdrew the previous indications for the current year and explained that it could not provide new ones because the situation in Asia and Europe is unpredictable: a further deterioration must be considered.
In response to this change in trend, the company reacted with the grounding of part of the aircraft in the fleet and with staff cuts. About ninety branches will be closed.
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Telecom Italia (ETR:TLIT) -8%, a new all-time low.
Barclays (LON:BARC) cuts the rating to Underweight, with a target price of € 0.15. In the note, the analysts wrote that the fair value is just above zero without extraordinary transactions.
This is what I said at the beginning of the year, with the slight difference in the target assigned according to my proprietary model at 0.16.
As always, investment banks always arrive later, but I feel happy as I have received many thank-you emails from investors, which came out at prices above 0.40.
Gold: Prices are falling to annual lows. At the beginning of the year, in my articles, I talked about the fact that precious metals have never performed well during the Fed's tightening policy phases, and that is what we are seeing.
The behavior is also negative during the recessive phases, so even if I had given a price in which I would have considered myself a buyer of gold in the 1650 area, and we are very close to it, I would wait another couple of months to check the trend of inflation.
As an alternative, I like silver, an essential metal for the production of green energy (especially in solar energy and electric vehicles), but it is also an industrial good. About 50% of the demand comes from industrial uses, and with a recession on the horizon, I would wait another couple of months to buy.