Today's stock markets, July 21. Weak markets, focus on the ECB and tariff negotiations.
European stock markets are off to a weak start in the ECB week, as investors continue to monitor trade developments as negotiations between the European Union and the United States drag on. On the macroeconomic front, markets are awaiting Thursday's European Central Bank meeting, which is expected to keep interest rates on hold after seven consecutive cuts.
In this context, the quarterly earnings season is getting into full swing on both sides of the ocean, with the publication of the accounts of Alphabet (Google) and Tesla and of some European banking institutions, including Unicredit , BNP Paribas and Deutsche Bank .
Eurozone deficit falls to 2.9% in first quarter
In the first quarter of 2025, the public deficit-to-GDP ratio stood at 2.9% in both the eurozone and the EU as a whole. This is a decrease compared to the previous quarter, when the deficit was 3.2% in the eurozone and 3.3% in the EU27. A slight decrease is also observed on an annual basis: in the first quarter of 2024, the deficit was 3% for the eurozone and 3.1% for the EU, according to Eurostat. The highest deficits in the first quarter of 2025 were recorded in Romania (7.5%), France (5.6%), and Austria and Poland (both 5.1%). The data for Italy are confidential.
Eurozone debt rises to 88% of GDP in first quarter
Public debt is rising in the Eurozone: at the end of the first quarter of 2025, it stood at 88% of GDP, compared to 87.4% at the end of the fourth quarter of 2024. In the EU, debt also increased from 81% to 81.8%. On an annual basis, compared to the first quarter of 2024, debt increased both in the Eurozone (from 87.8% to 88%) and in the EU27 (from 81.2% to 81.8%). This is according to Eurostat. Italy remains the second most indebted country, with a ratio of 137.9%, preceded by Greece (152.5%) and followed by France (114.1%). Compared to the last quarter of 2024, the largest increases in the debt-to-GDP ratio were observed in Austria and Slovakia (+3.5 percentage points), Slovenia (+2.9 points), and Italy (+2.5). The largest reductions, however, were observed in Ireland (-3.7), Latvia (-1.2), and Greece (-1.1).
Confindustria: 30% tariffs would have a 0.8% impact on 2027 GDP.
With tariffs at 30% and the euro-dollar exchange rate at current levels, "Italian exports of goods to the US would be reduced by approximately €38 billion, equal to 58% of US sales, 6.0% of total exports, and, including indirect connections, 4.0% of manufacturing production." This estimate is from the Confindustria research center, which highlights how "strong the net impact on GDP would be." The impact on our economy "would be mitigated by the ability of Italian exporters to find new outlets and compete on non-price factors," but "overall, Italian GDP in 2027 would be 0.8% lower than the baseline path."
"A complicated scenario," emphasizes the Confindustria research center, outlining the economic situation and forecasts in its monthly flash analysis. "Further announcements on US tariffs have heightened uncertainty and eroded confidence," warn the economists at Via dell'Astronomia: "Combined with the devalued dollar, these are dire conditions for exports, consumption, and investment." Meanwhile, "positive news comes from the partial rebound in oil prices, contained inflation, and the path of rate cuts in the Eurozone." Meanwhile, Italian industry "appears stagnant in the second quarter, while services are growing slowly."
Europe is weak, quarterly accounts impact
European stock markets were weak at the start of the week, with US futures rising and investors focused on next Thursday's ECB interest rate meeting. Meanwhile, quarterly earnings are setting the tone for markets, with Milan (-0.95%) marking a slowdown. Madrid (-0.35%) and Paris (-0.25%) performed better, while Frankfurt (-0.05%) hovered around parity, and London (+0.1%) held firm in positive territory. The spread between 10-year Italian government bonds and German Bunds remained stable at 85.5 points, with the Italian annual yield falling 4.4 points to 3.5% and the German yield falling 4.7 points to 2.64%. The dollar remained weak, trading just under €0.86 and just above £0.74. Gold rose 0.38% to $3,364.4 an ounce, as did crude oil (WTI +0.25% to $67.51 a barrel), and natural gas (+0.15% to €33.65 per MWh).
Stellantis is down 2.38% after preliminary data, while Ryanair rebounds (+5.49%) after solid numbers. Tomorrow, Unicredit (-1.17%), ASM International (+0.54%), Poste Italiane (-0.08%), and Dassault Système (-1.83%) are also weak. Rivals Thales (-1.56%), Saab (-7%), held back by Danske Bank's sell recommendation, and Leonardo (-1.26%), vying to acquire Iveco's military vehicles division (-0.06%) along with Germany's Rheinmetall (-0.74%). Oil companies BP (+0.74%), Shell (+0.36%), and Eni (+0.25%) are up, while TotalEnergies is weak (-0.1%).
Impact equal to 0.9% of Italian GDP with US tariffs at 20% and 1.4% at 30% (EY)
EY forecasts Italian GDP growth of 0.6%, set to rise to 0.8% in 2026. However, the possible confirmation of the so-called 30% reciprocal tariffs, starting August 1, could lead to a cumulative reduction in GDP of approximately 1.4%, effectively wiping out expected growth, with an estimated negative impact of just under €30 billion between 2025 and 2026, according to the EY Parthenon Bulletin. If the tariffs were confirmed at 20%, as announced in early April, the economic impact is estimated at around €20 billion and a 65% contraction compared to growth expectations (-0.9% cumulative between 2025 and 2026).
European stocks open weak, focus on ECB and tariffs
European stock markets opened weakly: London rose 0.01%, Paris 0.04%, and Frankfurt gained 0.08%. Milan, however, entered the session in negative territory, down 0.47%. Two weeks before the end of the August 1 extension, markets remain hopeful that his reversals in tariff strategies—hence the "Taco" effect (Trump always chicken out)—will not end badly.
US Commerce Secretary Howard Lutnick is also confident that an agreement with the European Union can be reached, despite negotiations with Europe becoming more tense after Trump toughened his demands in trade negotiations with the EU, pushing for a minimum tariff of 15-20%. Furthermore, the US is reportedly considering maintaining tariffs on autos at 25%. At that point, it seems almost inevitable that Brussels will retaliate.
The focus is also on Thursday's ECB meeting: no moves are expected on the interest rate front, but President Christine Lagarde's remarks will be listened to to determine the next steps. The impact on tariffs is likely being anticipated, as the Eurozone economy currently appears stable.
Asia clashes after Japan vote, Tokyo closed
Major stock markets in Asia and the Pacific faced mixed trading after the Japanese elections, which saw Prime Minister Shigeru Ishiba lose a majority of votes in the Senate. Ishiba promised to remain in office, but analysts say that if there is political instability, it will be difficult for the Bank of Japan to raise interest rates, and pressure on the yen will continue. The Japanese currency is indeed rising sharply against other currencies. Tokyo was closed for the holiday, Taiwan fell 0.18%, Seoul gained 0.71%, and Sydney lost 1.02%. Hong Kong (+0.6%), Shanghai (+0.7%), Mumbai (+0.34%), and Singapore (+0.41%) are still open.
Stellantis reports a 6% drop in global deliveries in the second quarter.
In the second quarter of 2025, Stellantis delivered 1.4 million vehicles globally, a 6% decrease compared to the previous year. The company has published significant preliminary unaudited figures for the first half of 2025.
BP appoints Albert Manifold as chairman, replacing Helge Lund in October
British company BP has appointed Albert Manifold as its new chairman. He will join the group's board of directors as a non-executive director and chairman-elect, effective September 1st. He will replace Helge Lund as chairman, effective October 1st. Manifold served as CEO of Irish construction materials group CRH from January 2014 to December 2024.
Ryanair's quarterly profit more than doubled to €820 million.
Ryanair closed the first quarter with profits more than doubling from €360 million to €820 million. Traffic also grew, up 4% to 58 million passengers, who paid an average 21% higher fares. According to CEO Michael O'Leary, "first-quarter fares substantially benefited from the Easter holidays in April," while ancillary revenues, related to services beyond the basic airfare, "grew 7% to €1.39 billion."
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