The data on US GDP growth in the first quarter, released in the early afternoon, should not brighten the party for Trump's first hundred days in the White House. Forecasts speak of a meager +0,2-0,4%, or an increase of less than 1% on an annual basis. It's not a drama if you take seasonal factors into account, but it's still a bad blow to the president's hopes of reaching +4% at the end of the year. Even so, Trump's more frenetic than usual activism is explained, as he first announced the denunciation of the NAFTA treaty and then withdrew the decision a few hours later.
Today the program, after the "historic" announcement of the tax reform (for now a small page illustrated in a press conference that lasted less than half an hour) provides for the relaunch of the health care reform, but a move in that direction could push the Democrats to block the approval of the federal budget, to be launched by today, under penalty of the risk of a blackout in the administrative machinery.
Wall Street, by now accustomed to it, paid scant attention to the president's gyrations. In fact, the attention was absorbed by the "Tech's big earnings night", i.e. by the rain of records rained down with the presentation of the accounts of Alphabet and Amazon in front of Comcast and Pay Pal (both at the top), not to overlook the brilliant results from Intel and Microsoft.
Both the former Google and Jeff Bezos' company have achieved post-exchange increases of more than 4% on the wave of stellar accounts. Alphabet rose by 4,5% thanks to the increase in Google's turnover: +18,8%, to 21.41 billion in the first quarter. Even Amazon (+4,1%) largely beat the revenue estimates made by analysts at 35,7 billion and presented positive guidance for the second quarter.
Under the impetus of the champions of technology who, by repatriating profits, could lend a big hand to Trump's tax reform, the Nasdaq (+0,39%) set a new record at 6.048 points. The Dow Jones (+94%) and the S&P 0,03 (+500%) were much less lively, held back by the decline in crude oil.
OIL LANDSLIDE: TENARIS -5,5%
In fact, oil is down with Brent losing 2,3%, to 50,6 dollars a barrel. Wti at $8,97. Iran and Iraq are considering whether to increase production despite the OPEC reduction agreement signed a few months ago. The entire Oil & Gas sector has weakened. Down in Piazza Affari Eni (-1,5%) and Saipem (-2,8%). Tenaris sinks (-5,5%), despite the good first quarter data.
The Nikkei index is starting to close down 0,3%, but the week ends up 3,2%. Hong Kong -0,4% (+2,2% per week), Shanghai -0,6%. Seoul marks a drop of 0,2%, but at the start of the session it had reached the highest levels of the last six years.
MILAN BRAKS BUT REMAINS ABOVE 20 THOUSAND POINTS
This time there was no Dragons effect. The meeting of the directorate of the ECB did not reserve any news. And so the lists of the Old Continent, devoid of ideas, have retraced after the slowdown of the banks. Meanwhile, the Cold War over Brexit is growing in tone. The Financial Times writes that the EU is preparing to welcome "a united Ireland", assuming the separation of Ulster from the United Kingdom.
The weak credit day favored the decline in Piazza Affari, the most dependent on the banking sector. But also the price list that has risen the most in the last week. Milan closes the session down by 1,1%, at 20.597 points. The other European markets did better: the Paris Stock Exchange fell by 0,3%, Frankfurt -0,2%, Madrid -0,7% on a par with London. The euro weakens and falls to 1,086 against the dollar, from 1,090 yesterday: the movement reflects Mario Draghi's statements.
DRAGONS: QE CAN'T BE TOUCHED. THE BTP AUCTION WELL
The ECB Council has not discussed exiting the current very expansive monetary policy. This is the key message of the Draghi press conference at the end of the board which confirmed all the cornerstones of the current monetary policy, i.e. zero rates and Quantitative Easing at the rate of 60 billion euro of bonds purchased every month between now and the end of the year.
Eurozone government bonds were positive in the afternoon. In addition to Draghi's messages, the positive outcome of the Italian auction of medium-term securities contributed to the increase. The Treasury has assigned the maximum amount offered for 5 and 10-year BTPs and for the new CctEu October 2024.
The 5-year rate remained unchanged at 1,04% seen in the March placement, while that of the 2,29-year BTP rose slightly to 2,25%, the highest since January, from 15% in March. The new CctEu of 2024 October 0,93 saw the rate at 196%. In the finale, the yield premium between Italy and Germany on the ten-year stretch rises to 197 basis points, the same level as before Draghi's intervention, from XNUMX points at yesterday's close.
BANKS IN BRAKING, INTESA SPEEDS UP IN POLICIES
An upward adjustment of rates would do the banks' balance sheets a lot of good, but Draghi explained that the hypothesis is still a long way off: first the QE ends and "considerably later" the rates rise. The indication favored the decline in the credit sector (the sector index -2,85%). The decline of Unicredit (-3,8%) and Banco Bpm (-2,8%) was heavy. Ubi (-2,4%) and Bper Banca (-2,7%) also fell sharply.
Understanding -2,3% on the day ofassembly. The CEO Carlo Messina said that the management has planned for this year to disburse 50 billion euros of credit (to date it has disbursed 12,5 billion) and to continue its process of divestment of non-performing loans at cost zero: "We are the only company in Italy that reduces bad debts at no cost, the others have had to bear monstrous losses to dispose of bad debts". The Bank also focuses on insurance. “Today we are leaders in the life business and we also want to invest in non-life,” added Messina.
DONNET: THE ASSET MANAGEMENT PLAN AT THE START
Remaining with financials, assets under management are weak despite the excellent data on inflows in March which rises to 10,1 from 7,45 billion in February, with a balance sheet for the first quarter of approximately 22,2 billion. Banca Mediolanum drops by 1,35%, Poste Italiane -0,87, Finecobank -0,54%.
Little move Generali (-0,14%). The company, CEO Philippe Donnet announced at the meeting, will present on May 11, in conjunction with the first quarter accounts, the strategic plan regarding asset management, while in 2018 it will kick off the growth and development phase for the company after completing the industrial strengthening phase envisaged in the current plan.
ATLANTIA SELLS 12,5% OF ASPI AND STRINGE ON ABERTIS
Atlantia did well (+2,2%). The BoD confirmed its interest in evaluating the launch of a friendly takeover bid for Abertis. The company is already raising the money needed for an offer that will be part cash, part exchange of shares. In the meantime, it was approved yesterday the sale of a 10% stake (plus another 2,5%) in Autostrade per l'Italia to a valuation, for 100% of ASPI's net capital, equal to 14,8 billion. The transaction will generate a capital gain of 736 million euros. The consortium led by Allianz Capital Partners will buy 5%, which will also have a call option to purchase a further 2,5%. Another 5% will be bought by China's Silk Road Fund. The completion of the transaction is expected by July. Contacts are underway with other potential investors who have expressed interest in acquiring additional stakes in Aspi's capital.
GOLDMAN SACHS AWARDS FCA, NEUTRAL ON LEONARDO
Fiat Chrysler settles down: -2,5% after the leap (+9,5%) on the eve. Goldman Sachs raised the company's target to 20,1 euros (from 20). The stock remains in the broker's Conviction List Buy: with analysts highlighting that the Ebit of the Nafta area was higher than expected.
Cnh Industrial also took profits (-1,3%) despite the good results. At the start of the session, the stock could register important price changes: the day after the presentation of the quarter's data, Mediobanca raises its recommendation to Buy from the previous Neutral. The target price is 11,6 euros. Exor sales (+1,2%).
Goldman Sachs instead reduced Leonardo's recommendation (-1,9%) from buy to neutral, with the target price rising from 14,4 to 16,2 euros. Stm closes lower (-1,10%), driven by sales in the final after an upward session due to good quarterly accounts. Purchases on Sogefi (+2,8%): Equita Sim raised its target price from 2,85 to 4 euro, confirming the hold recommendation.
Moncler (+1,10%) set a new historical record for the second consecutive day with a maximum price of 22,89 euros.
