Buy in May … analysts focus on Italy. Equita’s favorites

Despite a difficult opening in Asia, Europe is starting the week positively and the stock markets are well-matched. The Ftse Mib is up by around 0.8% today, in line with the other lists, while the markets are selling public debt. Not only the Italian one, with the ten-year BTP whose yield rises from 0.9% to 0.917%, but also the German Bund, which passes from -0.2% to -0.183%.

Today, Equita Sim, in a report entitled “Italy: if not now, when?”, Confirms the positive view on Piazza Affari. “We continue to believe that accelerating growth in the coming quarters remains the most likely scenario” as the initial efficacy of existing vaccines “appears to be high,” the analysts write.

Furthermore, for Equita “Italy is once again investable, given a drastically improved risk profile, and is one of the main beneficiaries of Next Generation Eu funds, elements that could bring a return of capital to Italy and Europe” . The Milanese SIM believes that the so-called reflation trade, that is the higher growth, combined with structurally higher inflation, which the markets have witnessed in recent months “can continue, continuing to lead the stock markets”, since analysts they expect inflation to increase in the next few years, “but remaining at an acceptable level” (and not create dangerous flames, which frighten the markets),

Equita also believes that central banks will continue to keep interest rates under control precisely to avoid causing waves of sales. In the recommended portfolio, the SIM remains overweight compared to the benchmark (97.9% compared to the neutral weight 95%). During the month, analysts “increased the beta of the portfolio with the entry of Tenaris (to which they add a further 50 basis points of weight)”, increased the presence of Banca Mediolanum and sent Snam out. In the small cap portfolio, Danieli savings entered the Best Picks selection.

Also according to Lorenzo Batacchi, portfolio manager of Bper Banca and member of Assiom Forex, there are good news in support of Italy, especially for the month of May. “In the first place”, explains the expert a, “we have reached 20 million vaccinated and by the end of the month we will be around 25 million. On the equity front, earnings per share on Wall Street and also in Europe are on average above expectations, unlike Italy”. If this is combined with the fact “that we will not have a short tapering by the Fed and that the market has sold BTPs in recent times due to some uncertainties on the Recovery Fund, all the positive news that will arrive shortly between corporate profits, reopening in Italy and benefits that will come from European funds, there will be a covering over the country and May this time risks being a good month for Piazza Affari “.

Edoardo Fusco Femiano, market analyst of eToro, recalls that, “despite a record reporting season and decidedly accommodating tones from the ECB and the Fed, the stock markets have returned from a week in which they moved with little direction, albeit trading close to of recently updated historical highs “.

After the rally in value stocks, eToro noted “a realignment of the relative performance of the technology and growth stocks in general compared to that of cyclical stocks”, as the sharp rise in commodities continues, “with the copper trading on ten-year highs, including agricultural ones, which come from years of generalized weakness “, adds Femiano.

It will be an important week, the one that opens today, the focus will be on Bank of England monetary policy meetings, the evolution of measures to combat Covid-19 and the quarterly season, “with approximately 1,450 companies reporting the results of the first quarter, although among these few could represent market movers on the markets “, warns the specialist. Meanwhile, today the markets are also expected to intervene by the governor of the Fed, Jerome Powell. (All rights reserved)

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