And the day of the giants came. Yesterday, with the stock exchange closed, the triple A of US technology (Apple, Alphabet and Amazon) announced the accounts for the end of 2017, one of the most useful tests for understanding the impact of the recent tax reform on the economy USA. And the result has been a mix of more money for shareholders (Apple) and more hiring (Amazon) which, paradoxically, threatens to fuel the fear of a recovery in inflation and the prospect of an imminent increase in the cost of money that has emerged from Fed messages. Today's data on employment and wages should provide useful information on the matter.
US BONDS RETURN TO 2008 PRICES
Meanwhile, the bond market has already adjusted. Sales on longer maturities have begun to arrive in the USA: the two-year T-bond at 2,18% is back to levels not seen in 2008. Even the Japanese JGBs and the German Bunds are waking up from their multi-year hibernation. Against this backdrop, the dollar's descent continues undaunted, slipping down to 1,251 against the euro.
Under these tensions, Meteo Borsa reports a mixed end to the week. All Asian Stock Exchanges were down this morning, especially those of India (BSE Sensex -1,5%) and South Korea (-1,5%). The lackluster closure of Wall Street is also holding back China's stock markets, where, in addition, the central bank of Beijing is draining liquidity for the fifth consecutive day. Hong Kong -0,1%. CSI 300 index of Shanghai and Shenzhen stock exchanges (-0,3%).
The Japanese Stock Exchange is starting to close down by 0,7% (-1,3% per week).
WALL STREET REVIVES IN THE AFTER STOCK MARKET
Wall Street closed weakly, worried about the effects of the resumption of inflation. The Dow Jones gained 0,1%, thanks to the boost from banks, favored by the upward trend in margins. The S&P500 lost 0,1%, the Nasdaq 0,35%. But the session was conditioned by the expectation of the accounts of the big three of the new economy.
APPLE WILL DISTRIBUTE 163 BILLION
The incoming signal from Apple is eloquent. The CFO of Apple, Luca Maestri, declared that the company intends to "practically reduce to zero" the reserves accumulated abroad sheltered from the ax of the tax authorities: the 163 billion dollars of cash net of debts (the liquidity of 285 billion) will be used to fuel acquisitions and investments in the USA, but above all dividends and buybacks. The outlook offset the disappointment in iPhone sales (-1%) only partially offset by higher revenues ($88.3 billion) from rising smartphone prices. The result? The stock, after an initial fall (-1%) on the announcement of the quarter's data, shot up 3,4% after the Stock Exchange, to 173,49 dollars.
A 789 MILLION TAX GIFT FOR AMAZON
The welcome given to Amazon accounts was even more sparkling: -4,20% at the end, a leap of 6,27% after the announcement of the results which revealed the doubling of profits (1,9 billion business dollars in the quarter) thanks largely to $789 million in tax savings. “The best use we can make of these DIs in America”. In 2017, the workforce employed by Jeff Bezos increased by 130 units (566 in all).
On the other hand, the accounts of Alphabet are muted (-3% in the last after-hours trading after a minimum of -5%); distribution and advertising costs (+33%) necessary to support revenues ("only" +24%) weighed on earnings ($9,70 per share).
OIL ON THE RISE, BITCOIN ON THE FALL
Brent oil is close to 70 dollars a barrel, trading on Asian markets this morning at 69,8 dollars a barrel, up 0,3%.
While waiting for the accounts of Exxon and Chevon, expected for today, the oil companies are positive. At Piazza Affari Eni +0,9%. Goldman Sachs strengthened its Buy rating, raising the target price to 20,0 euros from 17,80 euros. Tenaris was also on the rise, rewarded by the US broker with an increase in the target to 14,90 dollars (from 12,70).
New fall of Bitcoin, which left 10% on the ground, thus falling to the lows since November at 9 thousand dollars. In one month it has more than halved its value from the highs of 20 thousand dollars reached in December.
MILAN, BRIDGEWATER BETS ON THE DOWN
Negative session for European stocks thanks to the nervous start of Wall Street, which pays for the inflation alarm launched by the Fed. The worst Stock Exchange was Frankfurt, -1,41%, weakened by the chemical, pharmaceutical and automotive sectors; less damage in Madrid -0,5%; Paris -0,5%; London -0,57%
Piazza Affari, driven by the Agnelli galaxy, is in any case the best in the Old Continent and closes above parity: Ftse Mib index +0,15%, at 23.541.
The Bridgwater fund, one of the largest in the world, increased its "sell" position on Italy. The bearish bet against the most important companies listed on Piazza Affari (18 stocks including Eni, Enel, Unicredit, Generali) reached 3 billion dollars, triple the short position recorded in October.
HOWEVER, ITALIAN INDUSTRY SPEEDS UP
Italy's manufacturing sector grew at its fastest pace in seven years in January, driven by strong order flow, signaling a strong start to 2018 for the eurozone's third-largest economy. The PMI index elaborated by Markit/Adaci rose to 59 points, the highest level since February 2011
Inflation in the eurozone is still weak, so the European Central Bank needs to keep the stimulus measures going. This is what was reiterated by the chief economist and ECB board member Peter Praet. “We have not yet accomplished our mission: with inflation convergence proceeding only gradually, patience and perseverance in our monetary policy choices are warranted,” Praet said.
THE BUFFALO ON THE 5 STARS GIVES WINGS TO THE BTP
The BTPs fly to 5 stars. The questionable play on words is linked to the market's reaction to the Reuters "scoop" (denied) which attributed to the M5s premier candidate Luigi Di Maio declarations to the City of openness to a possible government of broad understandings. The reaction was the initiation of strong buy orders on Italian paper which caused yields to drop to 1,94%. The Btp/Bund spread briefly fell below 130, marking the lowest levels since 27 September 2016.
The yield on the ten-year German government bond rises to +0,72%, reaching its highest level since December 2015. Sales also on the thirty-year maturity, where the yield reaches 1,36%, the highest since January 2016. The average performance of the securities government bonds since the beginning of 2018 is negative between -0,7% and -1,5%. The 1,8-year Bund lost XNUMX% in January.
On the other hand, the Italy/Spain spread was under tension: 57 points at the end after having risen to 64 basis points: in December, during the Catalan crisis, it had reached a minimum of 23.
Greece is also taking advantage of the positive trend in the periphery: Athens has given a mandate to a banking union to place a new seven-year bond next week.
FERRARI, CNH, EXOR: GALAXY AGNELLI REVIVED
Scuderia Agnelli was the absolute protagonist of the day. Upon arrival, Ferrari takes the top step of the podium, up 7% to 102,8 euros, after the announcement of the record data from the 2017 budget closed with an adjusted Ebitda of over one billion euros, two years ahead of the IPO business plan.
The group provided its outlook for 2018: net revenues expected at over 3,4 billion; deliveries of more than 9 cars (including supercars) and an adjusted EBITDA greater than or equal to 1,1 billion. Furthermore, net industrial debt will be less than 400 million. A dividend of €0,71 per ordinary share (€0,635 last year) will be distributed.
Cnh Industrial +4,74% at 12,48 euros follows with equal lap but two gaps ahead, which has reached an agreement with Microsoft for a new digital transformation project that aims to provide enhanced technological services to customers of the group's agricultural brands : Case Ih and New Holland Agriculture, as well as the Iveco commercial vehicle brand. In an interview with Bloomberg, the managing director Richard Tobin spoke of a possible spin-off and enhancement of Iveco.
The Exor holding is also advancing (+1,67%). In addition to the progress of the group's listed securities, the progress of the reinsurance companies must be taken into account, which play to the advantage of Partner Re.
FCA SALES SLOW DOWN
Only Fiat Chrysler fell (-1,4%) held back by the 13% drop in sales in January in the USA, a figure lower than expected. But the January results on the Italian market were announced after the stock exchange was closed: +0,7% compared to 12 months ago when the increase was 3,36%. The company underlines "the success of the Alfa Romeo brands (up 28,3 percent) and Jeep, which even more than doubled sales compared to January 2017".
PERFUME PUT FROM HIS POCKET A MILLION IN LEONARDO
In the industrial sector, Leonardo finally rebounds (+1,71%) after the massive sales of the last two sessions. Among the buyers also the managing director Profumo, who yesterday bought 100.000 shares of the company at an average price of 9,73 euros, for a total investment of 973.000 euros.
Stm also loses hits (-0,9%) in the wake of Qualcomm's results: the US chip maker expects a drop in global demand for smartphones.
FINANCING THROUGH AFTER RECORD JANUARY
The prospect of a rise in market yields in Europe favored an extension of the sectors most sensitive to this dynamic. January ended with robust progress by Banks (+6,7%), Financial Services (+6,2%) and Insurance (+5%).
But the banking sector yesterday recorded a double-speed session: After a brilliant morning, the sector reversed course: the Italian index fell back by 0,3% (-0,2% for the European basket). The worst is Banco Bpm with a drop of almost 2%. Intesa was also down (-0,7%). Mediobanca (+0,98%) and Unicredit (+0,14%) are up.
Among other financials, Unipol (-2,05%) paid for the downgrade of Kepler Cheuvreux from buy to hold, with the target price confirmed at €4,6. Analysts cited the stock's strong performance to justify the rating cut.
AIR OF A TAKEOVER ON FERRAGAMO
Also noteworthy is Ferragamo's turnaround: +2%, from the initial -3,5%. The company ended the fourth quarter of 2017 with 389 million euros in revenues, down 5% year-on-year at constant exchange rates. The consensus was expecting 410 million euros, slightly up on the same period of the previous year.
The Fed's signals on the interest rate front have made themselves felt. Utilities thus weakened: Enel -0,7%, Italgas -0,4%, Terna -0,2%. Telecom Italy -1%. Vodafone has released its results for the quarter: the Italian businesses recorded a drop in revenues in the mobile services area, broadband did very well in the fixed line.
