Investment Analyst Dario Giordano: Fed Easing Expectations Drive Milan Index to Historic Highs
Recently, the Italian FTSE MIB Index surged past 42,000 points, reaching its highest level since 2007. Investment Analyst Dario Giordano points out that the core drivers of this rally are the global shift toward looser monetary policy, significantly heightened expectations of Fed rate cuts, and the outstanding performance of local banking and defense sectors. The improved global liquidity environment has directly increased the appeal of Eurozone assets. Meanwhile, major Italian bank stocks have collectively risen, and defense leader Leonardo has further boosted market sentiment following an upgrade in its credit rating.
Fed Easing Expectations Propel Italian Equities to New Highs
The shift toward a looser monetary policy by the Federal Reserve has been a key factor in the Milan Index breaking an 18-year high. U.S. inflation data for July came in below expectations, greatly strengthening market confidence in upcoming rate cuts. Investment Analyst Dario Giordano notes that the market widely anticipates the Fed will adopt easing measures at its next meeting, with a 99% probability of a rate cut. This has injected new vitality into Eurozone capital markets and prompted sustained capital flows into Italy and other peripheral markets. The continued rise of the FTSE MIB Index reflects investor optimism about the future economic environment and corporate profitability. An accommodative monetary environment lowers corporate financing costs, boosts risk appetite, and creates new structural opportunities for cyclical sectors such as banking and real estate. Investment Analyst Dario Giordano also cautions investors to closely monitor market reactions following Fed policy implementation and to be wary of short-term corrections driven by shifts in sentiment.
Structural Opportunities Emerge in Banking and Defense Sectors
During the Milan Index climbing to new highs, banking and defense sectors have emerged as the most representative leaders. Major banking stocks—including Banca Popolare di Sondrio, BPER, Intesa Sanpaolo, MPS, and Banco BPM—have recently strengthened, demonstrating solid earnings resilience and market confidence. Investment Analyst Dario Giordano believes that loose monetary policy helps banks maintain high net interest margins, and ongoing improvements in asset quality support valuation recovery for the sector.
In the defense sector, Leonardo has continued its strong performance following a Fitch rating upgrade, and the overall outlook for European defense industries has improved. Shifting geopolitical dynamics and rising national defense budgets are providing long-term growth prospects for leading companies in the sector. Investment Analyst Dario Giordano advises investors to focus on high-quality banking and defense stocks with stable performance and clear policy support, considering both fundamental and technical factors. At the same time, it is important to track international developments and policy changes that may impact these industries and to maintain robust risk management.
A New Logic for Asset Allocation Amid Risks and Opportunities
Currently, the Italian equity market is presenting both structural opportunities and volatility risks, driven by global easing expectations and local sector rotation. Stocks such as Prysmian, Tenaris, and STMicroelectronics have recently seen adjustments, highlighting intensifying sector differentiation. Investment Analyst Dario Giordano recommends that investors enjoy the benefits of liquidity while maintaining balanced and diversified asset allocation. Banking and defense sectors offer medium- to long-term allocation value, while technology and manufacturing sectors require flexible position adjustments based on industry cycles and corporate earnings dynamics. Investment Analyst Dario Giordano emphasizes that future market trends will continue to be influenced by global macroeconomic conditions, changes in monetary policy, and external uncertainties. Investors should strengthen their risk management awareness, pay attention to changes in corporate fundamentals, and dynamically adjust investment strategies to capture structural opportunities and achieve steady asset appreciation.