The Stock Exchanges are proceeding in no particular order. Asia is euphoric, US price lists are struggling, held back by the decline in crude oil. Europe is in swing, variously conditioned by the Greek syndrome. Germany was almost immune, affected more than all of Italy, much more than Spain; a disturbing signal, awaiting verification.
The weight of Athens, for now, little or nothing is felt in Asia, where the fruits of China's new expansionary turn are being reaped: Shanghai +1,1% is up, Shenzhen +2,2% is doing better. In Tokyo, the Nikkei index (+1,1%) set a new record, for the first time above 20 (20.123) since April 2000, driven by excellent commercial data: Japan recorded the first commercially active since June 2012.
Analysts are confidently awaiting the next corporate accounts campaign. Corporations, thanks to the stimuli of Abenomics (and the fall of the yen) promise record profits. To underline the alliance between the prime minister and the big names in industry comes the news that Abe intends to nominate Toyota's financial director for the board of the Bank of Japan.
NASDAQ ABOVE 5 THOUSAND. STOP THE BOMBS IN YEMEN, OIL DOWN
The renewed aggressiveness of Made in Japan exports is confirmed by the accounts of Harley Davidson (-10,5%). The two-wheeled giant is forecasting a difficult year, given stiff competition from Japanese motorcycles.
Even on the US markets, however, a new record is looming: the Nasdaq (+0,39%) yesterday returned to over 5. The other indexes contrasted: the Dow Jones index fell by 0,47%, the S&P 500 by 0,16% while the Nasdaq rose by 0,39%.
The new battle of the giants in pharma is in the spotlight. The Israeli Teva, world leader in generic drugs, has announced a hostile offer against Mylan, worth 41 billion dollars. Immediately after the announcement, Perigo, another giant in the sector, announced that it had rejected an offer (29,8 billion) coming from Mylan, this time in the guise of a hunter.
Crude oil is weak: Brent falls to 61,6 dollars following the announcement of the end of Saudi aviation operations in Yemen.
Yesterday oil prices gave up almost everywhere. In Milan, Saipem -2,6%, Tenaris -1,5%. Eni falls by 0,4%.
FRANKFURT ADVANCES, DESPITE GREECE
In general, yesterday was a day of ups and downs for European stock markets, under the pressure of contradictory indications on the front of the Greek crisis. Piazza Affari closed down, the only one among the major European stock exchanges in negative territory. The Ftse Mib index lost 0,4% after reaching an intraday high of 23.525 points and a low of 22.969 points. London gained 0,2% and Paris 0,1%. Frankfurt did best of all: +0,5% in closing after sailing with gains of more than 1% in the morning before the publication of the Zew index.
Few movements in the debt sector: the yield on BTPs is around 1,46%, the spread slightly decreasing below 140 bps.
Three-month interbank rates in the euro area fell below zero for the first time to -0,001% influenced by excess liquidity induced by the European Central Bank's quantitative easing programme.
ECB STRETCH ON ATHENS: YIELDS CLOSE TO 30%
What remains of Greek finance falters. The Athens Stock Exchange lost 3% also following rumors about the possibility that the European Central Bank limits the access of Greek banks to the emergency liquidity supply programme. Meanwhile, the yields on Greek government bonds continue to rise (almost 30% for two-year bonds, 13,25% for ten-year bonds).
It now seems obvious that the Riga summit will not produce an agreement on the commitments that Greece should, according to Brussels, take on in order to receive the 7,2 billion needed to deal with the financial emergency. The president of the Eurogroup, Jeroem Djissembloem, does not despair of an agreement in the coming weeks, emphasizing that if Greece leaves "the euro zone there would be very dangerous instability".
The numbers speak for themselves. Giuseppe Sersale, strategist of Anthilia writes: “With 2,7 billion outgoings (between public salaries and payments to the IMF) by 15 May (to which are added 2 Tbills auctions of 1,4 billion each), it seems very unlikely that the Greek Government can arrive in June honoring all the commitments. Thus, if no agreement is reached on May 11, Greece is likely to miss a payment to the IMF. This does not automatically translate into a default, as there is a 2 month grace period, but such an event would easily lead to an acceleration of deposit flight, which would most likely be addressed by the imposition of controls on capital, waiting for Tsipras to decide whether to soften the line, possibly with a reshuffle, a referendum or new elections, or try the path of default".
ITALIAN BANKS UNDER FIRE
The European banking sector moved little yesterday, supported by the good economic situation in the Eurozone. Credit Suisse (Q23 earnings up 12%) increased the global overweight to the banking sector to 10% from XNUMX%.
The situation for credit in the Bel Paese is different: the Italian Stoxx yields 1,42% confirming the vulnerability of the system in the event of a crisis in the euro area. Only Entente (-0,8%) and Ubi (unchanged) limit damage. On the contrary, the Populars retreat. Banca Popolare di Milano (-3,74%) is the worst bank stock in Piazza Affari. Despite the fall, the bank in Piazza Meda remains the best stock in the Eurostoxx Banks index with an increase of 65%. Banco Popolare (-2,76%), Monte Paschi (-2,05%) and Unicredit (-1,93%) also fell sharply.
Asset management companies were also weak yesterday: Azimut -0,9%, Anima -2%. Mediolanum -1,7%.
NOKIA RETURNS TO SMARTPHONES, STM FLYES
The happiest note of the day comes from Stm, the best blue chip of the day with a gain of 4% at 9 euros. There are two pieces of news that can explain the reaction, which came after losing 4,5% over the course of last week. The recovery of the European tech sector (+2,5% the sector index) after SAP +2,6%, Frankfurt's best stock one step away from the historical record of 2000, announced positive quarterly results favored by the devaluation of the euro, a factor that should also favor Stm.
Even more relevant is the driving force of Nokia, +3,5% in Helsinki on the rumors that anticipate its return to the smartphone production sector. Stm, was a historical supplier of the company today in the orbit of Microsoft. The stock has gained more than 40% since the beginning of 2015.
LUXURY, JP MORGAN AND UBS PUSH FERRAGAMO AND TOD'S
Another positive note comes from the luxury sector, immune from the Greek contagion. The increases were favored by a series of promotions on individual stocks by various brokers. Salvatore Ferragamo closed the session up 4,1% at 30,44 euros. JP Morgan confirmed the Neutral rating, adjusting the target price to 25,50 euros from 24,50 euros. UBS analysts raised the target price on the stock to 29 euros from the previous 21,5 euros, however confirming the Neutral rating. The percentage of analysts surveyed by Bloomberg (22) who recommend the purchase of the stock has decreased to 23%. The average target price is set at 29,5 euros, a price in line with the stock market price which marks an increase of 49% since January XNUMXst.
Tod's closed up 3,5% at 86,40 euros, partly making up for last week's overall 5% loss. JP Morgan reiterated the Neutral recommendation, adjusting the target price to 82 euros from 80 euros. UBS analysts have raised the target price on the stock to 85 euros from the previous 62 euros. Judgment improved to Neutral by Sell.
MEDIOBANCA “EXALTS” FINMECCANICA
Among the industrials, the recovery of Cnh Industrial (+2,9%) should be noted, which has already recovered the dividend released on Monday. Fiat Chrysler Automobiles +0,7%. Finmeccanica is up (+0,7%) after the convinced promotion by Mediobanca which raised the rating to Outperform from Neutral. The target has almost doubled, to 13,90 euros from 7,80 euros.
The Ei Towers court continues on Rai Way (yesterday +1,26%). Giorgio Barbieri, CEO of the Alfa subsidiary said that the integration between the two companies "is a project that makes such sense that a goodbye is a must". Gina Nieri, director of Mediaset said that the match "is not over because the operation makes a lot of industrial sense and, like all things that make sense, sooner or later it will happen".
