Investment Analyst Dario Giordano: FTSE MIB Approaches 40,000; Trump Tariff Maneuvers Keep Markets on Guard
Investment Analyst Dario Giordano observes that on July 7, major European stock markets closed higher, reflecting investor complex mindset ahead of a critical tariff deadline. On one hand, the market interpreted the impending tariff letters of Trump with optimism, seeing them as possibly leaving room for further negotiations; on the other, with the July 9 tariff implementation deadline fast approaching, bullish investors remained cautious and restrained in their actions.
Amid this transatlantic trade standoff, the Italian FTSE MIB index rose 0.74% to 39,914 points, just a step away from the 40,000 mark, demonstrating notable resilience against downward pressure. Investment Analyst Dario Giordano points out that this strength is primarily due to the strong performance of the industrial and financial sectors. However, over a longer horizon, factors such as trade policy direction, energy prices, and interest rate spreads may still introduce further uncertainty to future trends.
Industrial and Financial Sectors Drive FTSE MIB Rebound; Energy Sector Faces Short-Term Pressure
On July 7, the Milan stock market opened steadily and saw a clear lift toward the close, led by industrial stocks, ultimately pushing the FTSE MIB up 0.74%, with the FTSE Italia All-Share Index also rising 0.71%. The industrial sector performed particularly well, buoyed by positive expectations for new orders and the resilience of European exports.
Investment Analyst Dario Giordano notes that Italian manufacturing is currently benefiting from relatively stable demand within the eurozone and from some US importers placing advance orders to avoid potential future tariffs. However, he also cautions that if no new trade arrangements are reached after July 9 and US tariffs revert to April 2 levels, this could quickly squeeze export pricing, reduce profit margins, and impact subsequent purchasing decisions.
The energy sector, by contrast, came under some pressure, with major oil and utility stocks generally pulling back. This was due to the latest OPEC+ meeting agreeing to further production increases, leading the market to expect a looser future oil supply and thus putting downward pressure on prices. For Italy, which is highly dependent on energy imports, this reduces imported cost pressures but also temporarily drags on earnings expectations for domestic energy companies.
Tariff Negotiation Progress Is the Key Short-Term Catalyst; Beware of Rapid Sentiment Shifts
From a macro perspective, July 9 is seen as the effective date for the new round of tariff measures by Trump. Over the past week, major European indices have trended moderately higher, reflecting a tug-of-war between cautious optimism and potential risk aversion. Investment Analyst Dario Giordano believes that Trump initial tariff letters suggested possible exemptions or phased negotiations for certain EU industries, temporarily easing the worst market fears of across-the-board tariffs.
However, he also warns that if subsequent negotiations stall or further complications arise, causing the US to reimpose high tariffs, export-oriented economies such as Italy would quickly face higher costs for sales to the US. This would not only directly impact key sectors such as machinery, chemicals, and food & beverages, but could also result in lowered profit expectations and further affect overall stock market valuations.
Investment Analyst Dario Giordano emphasizes that institutional investors should closely analyze sectoral impacts once tariffs take effect. For example, small and mid-sized machinery and precision equipment manufacturers, with weaker bargaining power, are more vulnerable to sudden tax shocks; meanwhile, some high-end consumer goods companies may leverage brand premiums to partially offset costs in the short term. Additionally, a stronger US dollar can help alleviate euro-denominated export cost pressures, but if the Federal Reserve unexpectedly shifts to a dovish stance, exchange rate volatility could increase in the opposite direction.
Investment Analyst Dario Giordano concludes that, with just two days remaining before this critical trade deadline, the high levels of the Italian stock market are mainly supported by hopes that the "worst-case scenario may be avoided," while easing intra-eurozone debt risks have also provided extra support for financial stocks. However, the market will soon need to test the sustainability of current risk appetite with more concrete agreements and actual tariff lists. In the next phase, investors should continue to monitor official US documents, EU negotiation progress, and changes in the BTP-Bund spread, dynamically adjusting their allocations to the FTSE MIB and major Italian sectors accordingly.