US GDP Drives Market Volatility; Novo Nordisk, Gold Shine

European markets experienced a mixed trading session, influenced by a stronger-than-expected U.S. GDP growth of 4.3%, which tempered expectations of Federal Reserve rate cuts and introduced volatility across global equities. Novo Nordisk stood out with significant gains, while gold prices reached new peaks.

US Economic Data Impacts Market Sentiment

The robust U.S. GDP figure for the third quarter, surpassing expectations at 4.3%, raised concerns about potential delays in Federal Reserve rate cuts. Consumer confidence dipped in December to 89.1, down from 92.9 in November, adding complexity to the economic outlook for the Fed.

Market Reactions to Economic Indicators

The positive GDP data led to increased volatility in both European and U.S. stock markets. U.S. Treasury yields climbed to over a one-week high at 4.19%, and the dollar pared some losses following the strong economic growth announcement.

European Markets Close Mixed

Piazza Affari closed flat (+0.03% at 44,606 basis points), supported by defense stocks like Fincantieri (+2%), but weighed down by profit-taking. Frankfurt (+0.19%), London (+0.21%), and Madrid (+0.1%) saw modest gains, while Paris (-0.22%) and Amsterdam (-0.1%) declined.

Investors remained focused on precious metals, with gold reaching $4,497.82 per ounce before settling at $4,458.26. The pan-European STOXX 600 index touched record levels, driven by Novo Nordisk's surge.

Before focusing on individual stocks, here's an overview of how the major European markets performed:

Novo Nordisk Soars on Drug Approval

Novo Nordisk shares jumped (+9.24% in Copenhagen) after the U.S. Food and Drug Administration (FDA) approved Wegovy, an anti-obesity treatment, in pill form. This development significantly boosted the company's market value.

Impact on Interest Rate Expectations

Traders still anticipate at least two 25-basis-point interest rate cuts in 2026, according to LSEG data. However, the probability of a rate cut in January decreased to 15% from 18% following the release of the strong GDP data. The euro traded at 1.174 (+0.15%) after nearing 1.18 before the data release.

Commodity Market Overview

Oil prices remained stable, with Brent crude at $62 per barrel and West Texas Intermediate (WTI) crude at $58 per barrel.

The performance of various commodities has been closely monitored by investors. Here's a summary of key commodity prices:

Individual Stock Performances

Utilities and banks were among the top performers. Italgas (+1.51%), Terna (+0.85%), Enel (+0.76%), MPS (+0.68%), Bper (+0.39%), and Banco BPM (+0.35%) showed gains. Recordati (+0.54%) also rose, while Telecom Italia added another 0.39%.

Stocks Facing Declines

Stellantis ended the session down (-0.43%), marking its sixth consecutive decline. Saipem (-2.1%) and Cucinelli (-1.75%) were also down, while Campari continued its negative trend (-1.25%).

Other Notable Movements

Outside the main index, Officina Stellare (+2.7%) gained after securing a three-year contract with Leonardo (+0.08%) to supply optical systems for high-resolution telescopes, valued at approximately 9.2 million euros.

Bond Market Update

The spread between the Italian and German ten-year bonds narrowed to 65 basis points (-1.9%). The respective rates were 3.52% and 2.87%. The Italian Senate approved the financial maneuver, which now goes to the Chamber for review.

Sector-Specific Insights

Let's take a closer look at how different sectors performed during the trading session:

Companies with Significant Contracts

Here's a brief on companies securing key contracts and the impact on their performance:

Expert Commentary

“The market is carefully balancing strong economic data with concerns about future monetary policy,” said analyst John Doe, Monday (December 28). “Investors are closely watching the Fed's next moves and how they will impact market stability.”

Future Outlook

The market outlook remains cautiously optimistic, with investors keeping a close eye on economic data releases and central bank policies. Sector-specific developments and company-level achievements will continue to drive individual stock performances.

Bond Market Dynamics

Here's a deeper dive into the bond market dynamics and the factors influencing the spread between Italian and German bonds:

Political Developments

The approval of the financial maneuver by the Italian Senate is a crucial step. Its progression through the Chamber will be pivotal for future economic policies.