During the night, after a discussion that lasted 13 hours, the European Council found an unexpected result agreement on the management of migrant flows. The announcement at 4 this morning had an immediate echo on the currency markets: the euro recovered to 1,164 against the dollar (+0,7%)
A draft drawn up under the Italian-French direction has opened the window for an agreement, based on "closed centers" and "voluntary" (as Eastern countries have demanded) in which to distribute the immigrants arriving in Europe, under the teaches the EU, not that of the various countries. In exchange, Germany obtains a solution on the secondary movements, averting (perhaps) the rift of the CSU with the Merkel government. The Chancellor is cautious: "We still have a lot of work to do". The agreement paves the way for a possible agreement also on other dossiers, from the reform of the Community budget to new rules for the banking union.
COUNT AND MACRON SING VICTORY. BEWARE MERKEL
The Italian premier Giuseppe Conte sings victory: “Italy is no longer alone. The principle has passed that the issue of managing flows must be tackled according to a more integrated approach that concerns the external dimension, the internal one and border control".
Emmanuel Macron agrees: "Many predicted a failed agreement or the triumph of national solutions, instead we found European solutions".
Agreement also on the renewal of economic sanctions against Russia, another sign that Europe is still there.
SHANGHAI BOUNCES, US GDP SLOWS DOWN
A more relaxed atmosphere also on the other crisis fronts, one week after the start of US sanctions against China, which should take effect on July 6th.
The CSI 300 index of the Shanghai and Shenzhen stocks rebounded from the lows of the last 13 months and climbed by 1,5%. The yuan takes a breather, at 6,61 against the dollar, after seven consecutive days of decline. Hong Kong +1,1%.
The Indian Stock Exchange is up by 0,3%, the rupee dollar exchange rate, which reached its all-time high yesterday, dropped this morning to 68,5.
The MSCI Emerging Markets Currency index, adjusted to take into account currencies, today closes a black quarter: the drop since the end of March is almost 6%. During the same period, the dollar grew by 5%.
But there are signs of fatigue in the US economy. The quarter saw the worst consumer spending performance in nearly five years. The GDP rose by +2%, less than the 2,2% estimated by economists.
Thus the first doubts about the course of monetary policy within the Fed are manifested. James Bullard, of the Saint Louis Fed for example, told the Wall Street Journal yesterday that at this moment, there is the risk of going too far, continuing to raise rates according to the set trajectory. Eric Rosengren of the Boston Fed declared that the banks must begin to organize themselves, in view of a worsening of the macroeconomic scenario.
USA STRESS TESTS FAIL DB, CONSTRAINTS FOR GOLDMAN SACHS
Deutsche Bank USA failed the Fed's stress tests due to "gaps in controls and capital levels". The title of the German Bank loses 1% in US trading. The central bank has imposed restrictions on the distribution of profits on Morgan Stanley and Goldman Sachs and four other banks.
AMAZON CYCLONE ENTERS THE PHARMACY. MEGA BUYBACK FOR NIKE
Wall Street rebounds thanks above all to technology (+1,1% the sector index). The financials have finally broken the negative streak (13 consecutive sessions in the red). The Dow Jones rose 0,37%, S&P 500 +0,58%. Best of all the Nasdaq (+0,77%).
Amazon (-1,36%) accelerates on the Healthcare front of medicines. The company of Jeff Bezos bought Pill Packs, an online pharmacy that offers pre-measured medicines and home delivery. The big names in the Walgreens Boot Alliance are feeling the pinch. The pharmacy chain led by Stefano Pessina loses 9,9% despite the excellent quarterly results, the acquisition of control of the Rite Aid stores (yesterday -11,1%) and a $10 billion buyback programme. The CVS competitor leaves the field 6,1%. Amazon also announced that it will soon take care of directly delivering packages to customers: UPS loses 2,3%.
Nike's leap forward, +10,33% in after-hours trading after the publication of the quarterly accounts and the announcement of a $15 billion bu-back.
Deutsche Bank USA failed the Fed's stress tests due to "gaps in controls and capital levels". The title of the German bank loses 1% in US trade. The central bank has imposed restrictions on the distribution of profits on Morgan Stanley and Goldman Sachs.
But there are signs of fatigue in the US economy. The quarter saw the worst consumer spending performance in nearly five years.
The GDP in the annual projection marks a +2% lower than the 2,2% estimated by economists. The $1.500 trillion tax cut that went into effect in January should boost economic growth in the second quarter, bringing it closer to the 3% year-on-year rate set by the Trump administration.
OIL AT THE HIGHEST FOR 42 MONTHS. KEPLER PROMOTES ENI
Oil is about to end a second week of strong push. The American WTI went up to 73,58 dollars a barrel today, a price it hasn't seen since 2014. Brent is changing hands at 78,10 dollars, on the highs of June. At these levels, the week would close with a gain of 3% for Brent and 5,5% for American WTI. It follows that the difference between the two types returns to close at around 5 dollars, in recent months it had exceeded 13 dollars.
Eni (+0,33%) is starting to close against the market trend, consolidating the brilliant +2,8% recorded on Wednesday. Kepler-Cheuvreux strengthened the Buy rating, bringing the target to 18,50 euros from the previous 17 euros.
Saipem also tonic (+1,3%), while Tenaris corrects by half a point, after +5% on the eve.
EUROPEAN PRICE LISTS UNDER BRAKING: MILAN -0,57%
Stock markets of the old continent weak yesterday awaiting the outcome of the European Council, the most uncertain and dramatic in the recent history of the eurozone, grappling with the migration issue, the reform of governance and the budget as well as, last but not least, a new confrontation (decisive only on paper) about Brexit. The statements made by the heads of state at the entrance to the meeting did not foster optimism yesterday. On the contrary, tonight's white smoke should favor a recovery, especially if the hold of the German government is confirmed.
Milan (-0,58%) limited the damage in the final closing at 21.432 on trades for 1,8 billion, down from 2,7 billion on Wednesday.
Italian inflation in June accelerated slightly more than expected, mainly driven by the increase in the prices of energy goods. The consumer price index increased by 0,3% MoM + 1,4% YoY.
The other price lists are also weak; Frankfurt -1,39%, the most sensitive to the consequences of the increase in US duties, especially on cars. Smaller losses for Paris (-0,97%), Madrid (-0,72%) and London, which closed almost on parity.
BTP, THE TREASURE FILLS UP AT AUCTION
Success with some shadows for the auction of medium-long term securities.
The Treasury has placed 6,5 billion, ie the entire quantity offered in 5 and 10-year BTPs and Ccteu in today's auction with yields down from the multi-year highs at the end of May.
The 2,77-year yield fell to 3%, down from 5% the previous year. The 1,82-year was issued at 2%, Ccteu issued for 1,67 billion euro also decreased at a yield of 2%, against XNUMX% at the end of May
In the afternoon another 488 million Btp and Ccteu were placed in the reopening of the auction with the specialists. The share of 60 funding already achieved by the ministry rises to 2018%.
BUT BLOOMBERG RAISES A WARNING: DEMAND IS DROPPING
Everything OK? Not exactly. According to an article in Bloomberg (“The Bond's Market Warning to Italy”), demand recorded a robust decline: the 1,26-year bid-to-cover fell to 1,48 times from 5 a month ago. For the 2017-year term, the bid to cover fell to its lowest level since July 1,34 at XNUMX.
“It wasn't a disaster – reads the Bloomberg article – but demand for Europe's most prolific debtor has fallen to worryingly low levels. This factor will complicate the efforts of the new government. It is therefore not surprising that Italian rates have risen, albeit slightly after the auction”.
The 254-year spread first climbed back to 246 basis points from 2,82, yield 244%, before decreasing again. In the final stages we are at the lows of the session at 2,76 basis points, yield 2009%. The perception of the "Italy risk" thus remains high. The spread against Greece remains at the lowest level since 114 at XNUMX basis points.
BANKS, JP MORGAN LAUNCHES UNICREDIT
However, the successful outcome of the auction favored the recovery of the sector's banking stocks, which show a certain desire for recovery after the recent sales. The Italian banking index rose by 1,4% (the European Stoxx -0,1%).
Unicredit led the rebound: +1,7% again above 14 euros. JP Morgan's analysts have slightly reduced the target price of the stock, bringing it to 20 euros from 21 euros, or with a potential of 44% compared to yesterday's quotation. Intesa -1,97% after the US broker reduced the target price from 3,3 to 3,1 euros. The target of Banco Bpm + 1,13% (from 2,9 to 2,8 euros), of Bper +0,9% (from 5,2 to 5 euros) and Ubi -0,03% (from 4,2, 4 to XNUMX euros).
Generali (-0,80%) set to enter exclusive talks with insurance group, Viridium, over divestment of its €40bn German life portfolio
THE AX OF DUTIES ON CARS AND CHIPS
The uncertainties on duties are being felt on cars and techs.
Ferrari loses 2,4% after the positive rebound of the last few days. The Maranello company could be affected by a trade war between the USA and Europe, considering that the USA is a very important market and that production takes place exclusively in Italy
Cnh Industrial and FCA also fell (-3,47%) in line with the European automotive sector (down by 2,5%).
Heavy Stm (-5%) among weak techs across Europe, while in the US they rebound after yesterday's bad closure. There are fears that the sector is embroiled in the trade battle over tariffs between the US and China after President Trump threatened to limit Chinese investments in American technology companies. The other chip manufacturers also suffer: Infineon, ASML, Micro Focus.
Sales continue on Prysmian (-4,54%) at new lows which today set the terms of the 500 million capital increase with an issue price that provides for a 25,82% discount on the theoretical ex-rights price (Terp ).
STOP IN AUSTRALIA FOR FINCANTIERI, ASTALDI CELEBRATES IN Türkiye
Fincantieri loses 6,38% after the tender for nine frigates destined for the Australian Navy was won by competitor Bae Systems.
Ei Towers (-4,75%) pays the downgrade of Banca Akros to neutral from accumulated.
Astaldi went against the trend (+1,3%) after the chairman Paolo Astaldi said that the talks for the sale of the stake in the Bosphorus bridge are at an advanced stage.
THE GENOVESE DIRECTOR COMES IN LEONE FILM, A VODKA FOR MASI
Leone Film Group, a film production and distribution company, could attract the attention of investors today. The director Paolo Genovese (the author of "Perfect Strangers") rose to 2,98% of the share capital for a consideration of 509.498,10 euros.
The vodka effect continues for Masi Agricola (+0,88%). The Valpolicella producer, leader in Amarone, was awarded by Equita after the import and distribution agreement for its wines with Beluga, the largest vodka producer, which also owns a chain of about 350 "WineLab" shops , specialized in wine. The broker increased the target price on the stock from 4,3 to 4,6 euros, rating hold.
Energica Motor's flight continues at Aim, +22% yesterday.
