Technical analysis: the ECB hikes, semiconductor stocks pay for higher yields and Oracle stock jumps after hours

The European Central Bank took its main refinancing rate to 2.65% from 2.40% and the deposit rate to 2.50%, in a hawkish tone: Christine Lagarde warned that higher energy costs will feed gradually into core and food prices, and reports suggest the council sees room for another move as early as October. Across the Atlantic the producer price reading, 5.4% year on year with the core at 4.6%, pushed the US ten-year yield toward 5% and money markets to price roughly a 70% chance of a Federal Reserve hike at the 15-16 September meeting.

On our dashboard the three stress gauges accelerated together: equity volatility up 8.4% in one session, bond volatility up 7%, the Italy-Germany spread up 5.4%. Crude gained 6.7%, taking the month to 24.5%. Indices paid unevenly: the S&P 500 ETF S&P 500Long down 0.60%, the Nasdaq 100 ETF Invesco QQQ TrustLong down 1.06%, the small-cap ETF Russell 2000 ETFShort down 1.01%. In Europe Frankfurt DAX ETFLong lost 0.73%, Paris CAC 40 ETFShort 0.57% and London FTSE 100 ETFLong 0.55%; the FTSE MIB ETF FTSE MIB ETFShort closed virtually flat, while the Milan index itself rose 0.45% according to the session reports.

In the United States only two sectors closed above zero: communication services XLCLong at 0.60% and consumer staples XLPLong at 0.05%. Technology XLKLong came last at minus 1.41%. Energy XLELong lost 0.58% on the day crude rose 6.7%, and that is the oddest line on the grid.

Europe ranked the same way: telecoms EXV2Short up 0.31% and autos EXHGLong up 0.16% at the top; basic resources EXV6Long down 3.83%, technology EXV3Long down 1.54% and industrials EXH4Long down 1.10% at the bottom. European banks EXV1Long gave up 0.39% on rate-hike day, oil and gas EXH1Long 0.29%.

Milan closed up 0.45% according to the session reports, ahead of the other European markets, and it moved on single-stock stories rather than on the central bank. Lottomatica stock LottomaticaShort gained 5.44% on four times its usual volume, nearly all of it on the buy side: the widest and best-funded move among the index heavyweights. Leonardo stock LeonardoShort rebounded 2.85% after Wednesday's drop, alongside FincantieriLong up 1.40%; INWITShort added 2.25% and Ferrari stock FerrariLong 1.50%.

Among the banks the news of the day was Intesa Sanpaolo's shareholder meeting, which approved with 96.96% of the votes the capital increase backing its public tender and exchange offer for Monte dei Paschi; the next step is Consob's clearance of the offer document. On the same day Monte dei Paschi filed with Consob the documents for its two exchange offers on Banco BPM and Banca Generali. Intesa Sanpaolo stock Intesa SanpaoloLong closed up 0.09%, Monte dei PaschiLong up 0.55%, MediobancaLong up 0.39%, while UniCredit stock UniCreditLong slipped 0.50%, Banco BPMShort 0.06% and BPER BancaLong 1.17%. On the weak side MonclerShort fell 3.45%, AvioShort 2.74%, BuzziShort 2.71%, PrysmianShort 2.64% and STMicroelectronicsShort 2.00%.

The selling concentrated on artificial-intelligence infrastructure, the most rate-sensitive corner of the market. CoreWeaveLong lost 6.13%, IntelShort 5.57%, OracleLong 5.38%, Dell TechnologiesLong 5.35%, NebiusLong 5.09% and Micron TechnologyShort 4.90%; NVIDIALong shed 2.37%. After the bell Oracle posted a record quarter: revenue of 19.35 billion dollars, cloud infrastructure up 121% to 7.4 billion, adjusted earnings of 1.92 dollars a share against 1.74 expected and full-year guidance raised above 90 billion, and the shares jumped 7% after hours. Nvidia also carried a Justice Department probe into its licensing deal with the AI start-up Groq.

On the other side AppleShort gained 3.56% the day after unveiling its foldable iPhone, and AlphabetShort and MicrosoftLong closed slightly higher. Meta PlatformsShort lost 1.42% despite an upgrade from JPMorgan. In energy the majors stood still with crude sharply higher: Exxon MobilLong up 0.61%, ConocoPhillipsLong up 0.37%, ChevronLong down 0.49%. Defence rose, with Lockheed MartinShort up 1.08% and Northrop GrummanShort up 0.66%, supported by the missile production cycle.

Basic resources were the continent's worst sector: GlencoreLong fell 4.11% and Rio TintoLong 3.12%. In Germany SAPLong lost 2.76% with the rest of technology, SiemensLong 2.38% and Infineon TechnologiesShort 2.02%; in Paris EssilorLuxotticaShort gave up 2.11% and LVMHShort 1.16%, in London HSBCLong 1.30%.

Frankfurt had the worst session of the three main markets: Siemens EnergyShort lost 2.98%, the weakest name in the DAX, and SAP slid ahead of its own results. In London crude kept the majors afloat, with ShellLong up 0.83%, and in Paris TotalEnergiesLong added 0.22%. Also higher: British American TobaccoShort up 1.54%, AllianzLong up 0.55% and RheinmetallLong up 0.40%.

DAX ETFLong lost 0.73%, CAC 40 ETFShort 0.57%, FTSE 100 ETFLong 0.55% and FTSE MIB ETFShort 0.06%. Measured from their all-time highs, Milan sits 4.19% below, Frankfurt 4.51%, Paris 7.16% and London 9.46%.

Our signals moved again. Paris has been on a sell since 24 August and Milan since the 4 September close. Frankfurt, a buy since April, now has a weekly sell forming on the candle that closes tonight, with the week's typical price 2.95% below the exit level. London, a buy since 7 April, closed 0.09% below its own level, but its typical price still sits 0.69% above: on today's numbers it would take a further drop of roughly 1.1% to change side.

XLK — the Technology Select Sector SPDR, the US technology ETF — was Wall Street's worst sector basket, down 1.41%, while XLC, the Communication Services Select Sector SPDR, was the best at 0.60%. In Europe EXV6 — the iShares STOXX Europe 600 Basic Resources, the European basic resources ETF — lost 3.83%.

Three more baskets earn the card on smaller moves. GLD — the SPDR Gold Shares, the world's most traded gold ETF — fell 1.73% and its daily signal turned to a sell: with real yields and the dollar rising, gold reacted to rates before it reacted to war. VT — the Vanguard Total World Stock, Vanguard's global equity ETF — gave up 0.85%. SOXX — the iShares Semiconductor, the semiconductor ETF — lost 2.74%, and hardly a single data-centre semiconductor stock escaped the selling.

The weekly cohort was born at Friday 4 September's close: 21 new buy signals, 14 tradable. From Tuesday to Friday this card publishes only what changes, and tonight the cohort completes its week: the new one arrives on Monday.

Yesterday brought more changes than usual. On SNDLLong and BB SeguridadeLong the daily signal turned to a sell, while the weekly signal remains a buy. Four Brazilian names moved back above their entry level: Banco do BrasilLong, Itau UnibancoLong, ItausaLong and EcoRodoviasLong. Volkswagen AG PrefLong and SandiskLong slipped below entry, and Recursion PharmaceuticalsLong drifted further away from its own. No name in the cohort reports this week.

Three companies in our universe report over the next seven days, all around the Federal Reserve meeting.

Wednesday 16 September

MFE-MediaForEurope Short

Thursday 17 September

Carnival Short

FedEx Long

SPY, the S&P 500 ETF S&P 500Long, lost 0.60%; QQQ, the Nasdaq 100 ETF Invesco QQQ TrustLong, 1.06%. After two sessions in which the technology basket had fallen less than the broad one, the relationship flipped yesterday, and sector composition explains little of it: applying each basket's own sector moves gives an expected gap of 0.07 points against the 0.46 observed. The selling landed squarely on the technology names.

The geometry of the two trades is still opposite. SPY is in the twenty-second week of a buy signal with all three profit-taking windows already reached, and closed 0.28% above its weekly Reversal Point; the week's typical price, however, sits 0.75% above, so on today's numbers it would take a close roughly 1.2% lower to switch the signal off. QQQ is in its fourth week, still below its entry, with every window ahead and a typical price 2.05% above the level: flipping it would take a drop of more than 3%.