Piazza Affari: the FTSE MIB 40 index and the earnings season. What to expect?

The quarterly reporting season has begun and, in the week of the ECB meeting, the FTSE MIB 40, an index representing the shares of the 40 most capitalized companies on the Italian market, finds itself in a particularly interesting technical context, which deserves attention.
Specifically, for about two months, the FTSE MIB 40 index has been struggling to maintain the technical level of 30,000 points, a goal achieved after more than a decade of sideways trend.
Faced with the latest news, what expectations can we have for Italian securities? How will earnings season impact the FTSE MIB 40? A first point of in-depth analysis is aimed at the earnings season, which in Europe began on the 24th.
According to the classic report by BofA Securities, an average contraction in European earnings of around 18% is expected, mainly due to the of cyclical consumer goods and energy.
On the contrary, many expect satisfactory results from the banking sector.
Piazza Affari stands out for its strong capitalizations in both the banking and energy sectors.
For this reason, we carefully observe the FTSE MIB 40, and in particular the profits of its largest capitalisations, such as Enel, Intesa Sanpaolo, Eni and UniCredit, which could represent the two opposite extremes in this earnings season.
Little mentioned, but equally central in the context of the FTSE MIB 40, is also the automotive sector, with leading capitalizations such as Ferrari and Stellantis, in second and third place respectively in the index composition list.
The topic is also quite delicate currently from a political point of view, with the government increasingly oriented towards enhancing the national interest.
In this context, Prime Minister Giorgia Meloni intends to establish a balanced relationship with Stellantis.
On the other hand, Ferrari shows solid prospects from both a fundamental and technical perspective.
In 2023, the bullish trend of RACE stock was evident, recording a return of more than 72%.
FTSE MIB 40: what moves the Italian stock index? The FTSE MIB 40 index recorded an extraordinary 2023, thanks above all to the strong boost observed on the stock market by its main capitalizations.
However, 2024 has not started in the best way, with a generalized profit-taking which to many seems to indicate a cyclical and physiological change.
For example, the RACE stock has contracted from its highs by 10%, a phenomenon similar to that of other major players last year.
On the contrary, the banking sector remains close to the highs, thus supporting the index's valuations.
These ups and downs are clearly visible in the chart of the FTSE MIB 40, which, at the moment, does not yet seem determined to definitively break below the technical and psychological threshold of 30,000 points.

Author: Hermes A.I.

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