A missile launched by North Korea into the Sea of Japan greeted a few hours ago the eve of the meeting between Donald Trump and Chinese President Xi Jingping. Meanwhile, the race for the Elysée is heating up in France: last night, during the TV debate, Emmanuel Macron accused Marie Le Pen of wanting to "unleash an economic war in Europe". Polls say that the two candidates can count on 25% of the votes each, ahead of the third wheel, the Marxist Jean-Luc Melenchon.
It is the current political situation that dominates the news, among other things bloodied by the bombs in St. Petersburg and by the use of toxic gases in Syria. The markets have taken note of this, waiting for the publication of the Fed minutes (tonight) and the US labor market data (Friday) to offer new insights. This explains the calm that reigns on the markets awaiting indications on duties, tax reform and the start of the quarterly campaign, to understand whether or not the health conditions of companies justify the high price levels of the Stock Exchanges.
BEIJING DESIGNS ANOTHER SPECIAL AREA
Against this backdrop, Asia experienced a cautious but positive session, despite the Korean bomb. Chinese Stock Exchanges are up +0,4%, closed for holidays since last Friday. The stimulus comes from the decision to launch the new Xiongan economic zone, on the model followed for Shenzhen in the 30s. It is a large investment that will involve more than 20 companies listed in Shanghai including BBMG, cements, which has achieved a 0,2% increase. Tokyo (-0,3%) and Hong Kong (-XNUMX%) moved little.
FED, LACKER RESIGNS: HE TALKED TO AN ANALYST
Sensational at the Fed, the Federal Reserve chairman of Richmond, Jeffrey Lacker, left the US central bank for having had a conversation in 2012 with a Wall Street analyst in which he may have provided the latter with sensitive information on Fed policies. “It was never my intention to reveal confidential information,” the central banker defended himself in a note in which he admitted the conversation with an analyst at Medley Global Advisors. However, Lacker admitted that he "violated the external communication policy which prohibits giving profit-making people or organizations advantages over competitors".
NEW RECORD FOR AMAZON, CATERPILLAR SALE
Lists almost flat also on Wall Street: the Dow Jones index rose by 0,19%, S&P 500 +0,06%. Unnoticeable gains also for the Nasdaq, which rose by 0,07%. It was a record day for Amazon: +1,7% to $906. Apple +0,7%.
Among the big names in US industry, Boeing (+1,16%) and Caterpillar (+2,02%) advance: the bulldozer group was chosen by Goldman Sachs for its Conviction Buy List with a target price of $120 , compared to the current price of $94,3.
ENERGY RISES, BUT SAIPEM SLIDES
The recovery in oil prices continued yesterday. Brent crude gained 2% following the release of preliminary data on US strategic inventories, this morning the race continues +0,6% to 54,4 dollars a barrel (+1%). Exxon climbs 0,37%, Chevron +0,8%. Halliburton goes up 0,55%.
In Piazza Affari, ahead of Eni (+0,7%) and Tenaris (+1,3%). Splash of Saipem (-2,9%), influenced by the collapse of the Norwegian Seadrill (-37%), which announced that shareholders and bond holders could suffer losses following the debt restructuring agreement that the drilling company oil companies are negotiating with the banks.
TESLA ALSO INSIDES GM. SLOW RECOVERY FOR FCA
The automotive world revises its accounts and rankings after the slowdown in sales on the North American markets. After overtaking Ford by market capitalization, the electric car manufacturer Tesla (49,1 billion market value) is also undermining the leadership of General Motors (51,1 billion).
The negative wave of sales in the USA also affected Europe: the Automotive sector (European Stoxx -0,7%) was the worst sector. Fiat Chrysler recovered slightly (+0,4%) after yesterday's 5% drop. In Frankfurt Daimler fell by 1%, Volkswagen -1,1%, BMW -1%.
POSITIVE MILAN AND THE BTP. IN VIEW OF POSITIVE OPENING
The European markets were also slow. This morning, attention will be focused on the PMI services indices of the Eurozone. Futures signal a slightly higher opening.
Piazza Affari closed the session yesterday in positive territory. In fact, the Ftse Mib gained 0,07% to 20.257,10 points, in line with the rises of the other European stock exchanges. In London, the Ftse 100 index gained 0,54% thanks to the weakness of the pound, Frankfurt rose by 0,21% and Paris grew by 0,30%, Madrid +0,35%.
Closing up for the Btp, even if below the highs. The Italian 2,24-year yield fell to 200%; the Btp/Bund spread continues to hover around 162,72. The future on the Bund has risen to 2, the highest since the beginning of March. At the end of the session, the spread between Italian and Spanish 68-year bonds narrowed by 10 points to 2017 bps. The Spanish charter pays for Madrid's decision to revise upwards the XNUMX billion funding targets for XNUMX.
BONDS OF VENETIAN BANKS IN A STRONG RECOVERY
Light at the end of the tunnel for the Veneto banks, awaiting the green light from the EU on the precautionary recapitalization. The climate of optimism was confirmed by the rebound in the quotations of the bonds of Popolare Vicenza and Veneto Banca, after the European Central Bank indicated the capital shortfall at 6,4 billion that institutions must fill.
The Popolare Vicenza October 2018 senior bond with a 5% coupon rose by around 5 and a half points to 82,37, with a yield down to 19,07% from 24,57% at the previous close. The March 2020 share with a 2,75% coupon of the same bank rises by six and a half points to 79,0, for a yield in the 11,54% area. Purchases also on the May 2019 senior bond with a 4% coupon of Veneto Banca: +4,3 points to 81,11, with a yield down to 15,035% from 18,091% at yesterday's close.
This morning, Popolare di Vicenza announced that it had sold 6,02% of Cattolica di Assicurazioni on the market at a unit value of 7,25 euros. There will be a 9-day lock-up on the remaining portion, equal to 90%.
S&P: LIQUIDATION OF BAD LOANS WILL BE SLOW
In letter the European banks, with a drop of about half a percentage point. The Italian sector instead resets the losses in the final. Among the major institutions, the worst is Ubi with -1,2%. Unicredit drops by 0,3%, Intesa +0,7%, Banco Bpm +0,2%. Weak Generali -1% conditioned by Goldman Sachs' Sell recommendation.
The reduction of Italian banks' non-performing assets will continue in a "significantly more gradual" manner than in other countries such as Spain and Ireland. This is supported by Standard and Poor's in a report published today and dedicated to the large load of 'non-performing assets' (Npa) which still weighs on the credit institutions of the peripheral countries of the euro area.
TELECOM UNDER FIRE, CONSOB BEACON ON PROXIES
The drop in Telecom Italia (-2,6%) weighed on the Milanese price list. The threat of an aggressive entry of the French Iliad on the Italian market has pushed sales on the telecommunications group. Iliad subsidiary Free Mobile aims to repeat its huge success in France with tariffs 50% to 80% lower than incumbent operators. The company founded by Xavier Niel is convinced that, by lowering prices, it will be able to conquer 10% of the Italian market in the first two or three years to reach up to 25%, explained one of the sources.
Meanwhile, the tension on the nomination front is rising. The possible arrival of Arnaud de Puyfontaine to the presidency would not go unnoticed in the eyes of Consob, said the president Giuseppe Vegas yesterday, Il focus, anticipating an examination of the powers that will be assigned to the manager and his exercise.
ATLANTIA MAKES CASH WITH HIGHWAYS
Among the utilities, attention to Atlantia (+0,58%). A consortium led by Allianz is interested in buying a third of the 15% stake in Autostrade per l'Italia put up for sale by the Benetton company. The vehicle headed by the German partner is ready to pay around 500 million for its part. Atlantia is in talks to sell another two 5% stakes to investors. Abu Dhabi Adia sovereign wealth fund favored.
In the sector, the decline of A2A (-2,9%) also stands out, which yesterday announced good results for 2016, but disappointing objectives for 2017. Mediobanca lowered the recommendation to Neutral from Outperform. Enel drops by 0,1%.
PRYSMIAN, RECORDATI AND THE CAMPARI RECORD
Industrial stocks were positive, among which Prysmian stands out, gaining 1,8% supported by Goldman Sachs which raised the target price to 27 euros from 26 euros (Neutral recommendation). Leonardo rose by 0,7%, Stm -0,4%.
Recordati +1,4% thanks to broker Oddo who raised the target price to 37 euros from 35 euros, confirming the Buy rating. New all-time high for Campari (+1,3%).
