The EU and US futures are slightly up at the time of writing. The Wall Street rally continues and is inspiring stock exchanges in the Asia Pacific and Europe, all up at the start of a week crowded with critical macroeconomic data.
There is good news from travel and cruise companies. The data on bookings for the past two quarters are exceptional, numbers not seen since the pandemic. Analyzing the EU and US macro data, it has to be said that they are not positive at all.
The growth of the Eurozone business activity slowed significantly - and well beyond forecasts - this month as consumers, worried about rising bills, chose to stay home and postpone shopping to save, according to a survey published today.
Also negative is the data on Germany today, with the IFO Consumer Confidence Index which has disappointed. Things are not better in the US. initial jobless claims totaled 229,000, in line with the previous figure and worse than expectations of 226,000.
Hot Stocks and Instruments
Intesa Sanpaolo (OTC:ISNPY): The bank's board of directors decided to start the buyback of 3.4 billion euros, approved by the shareholders' meeting in April on July 4. The second part of the increase will take place next year, within the approval of the annual accounts for 2022.
Saipem ADR (OTC:SAPMY): The 2 billion euro capital increase starts today. Borsa Italiana announced that the adjusted reference price of the shares had been set at € 1.2495 and the theoretical value of the right at € 22.4507.
Crude oil: Oil is in great shape and is trying to recover after a negative last week, marking an interesting positive variation, with a + 1.80%.
Natural gas: There are currently no price reactions, but the latest figure on gas stocks, which is very negative, aggravates the picture.
Tesla ( NASDAQ:TSLA): Tesla partners with PG&E Corp (NYSE:PCG) for a virtual power plant in California.
Aurora Cannabis (NASDAQ:ACB) and Canopy Growth (NASDAQ:CGC): The banking reform law that would have allowed legal cannabis operators to do business with US financial institutions has been removed from a bill.
Conclusion
A few words about the mini rebound of the markets we are witnessing these days, many of my clients ask me if this is a real rebound or not. We are facing a fake bounce, simply due to an Oversold technical condition, with the sell positions being closed, causing this mini bounce.
My medium-term bearish base case remains intact. The next bearish leg will be driven by increasing recession risks and downward earnings revisions. The situation is starting to get very interesting on oil, and at around $100, I could open a buy position. Although fears about a possible recession are present, I expect record demand for oil for the summer season.
Due to Russian oil restrictions, the supply continues to be low, and the political situation in Libya is worsening, putting crude oil exports to the Gulf of Sirte at risk. This could shortly lead to a rally in oil prices to be exploited.
About natural gas, the situation has changed. With the crisis in Freeport, one of the largest export plants, which due to an accident, will remain offline until September, a large domestic oversupply has been created, depressing prices.
The situation needs to be monitored because, at the end of August, there could be an opportunity on gas once the plant is back in operation. On Tesla, this is good news for the stock that, thanks to its Powerall, the batteries that store energy, also aims to increase the turnover in this sector.
As mentioned in previous articles, analyzing the balance sheet and prospects, the stock is not at a discount at the moment, with very high multiples. Only in the $350 area could I consider an operation on the stock.
Regarding the Cannabis sector, the news is very negative in general for the whole sector. We are facing major bureaucratic obstacles to the legalization of Cannabis, and we are in the presence of a market in full oversupply that makes the future black for the sector.
With regard to Saipem, as I always tell my clients, when it comes to a capital increase it is better to stay out of listed shares, the ideal is to wait for the chaos generated by the theoretical value of the rights and the price of the shares that only leads to losses steps.
In my articles at the beginning of the year, however, I indicated this path, that of making only a Sell operation on the stock for speculative purposes. In my next article, I will give an evaluation of the title.