China, Volkswagen. Then the raw materials. Finally, to complete the picture, the collapse of the health sector, the defensive bulwark par excellence. The chain of misfortunes afflicting the markets on the eve of the end of the third quarter is impressive. And the sales rain is getting thicker, as confirmed by the Asian session.
This morning Tokyo loses more than 3%, erasing all the gains of 2015. Equally heavy are the losses of Hong Kong (-3,3%) and Sydney. Contains losses Shanghai. Since the beginning of the year, the loss of the Asia Composite index is 16,3%, the worst figure since 2008. The sharp decline also for oil: -2,8% for Brent just above 47 dollars a barrel, -2,5% the Wti.
The collapse of the eastern markets follows one of the worst sessions on Wall Street: the Dow Jones index falls by 1,9%, the S&P 500 by 2,6%. Worst of all is the Nasdaq (-3%). New York Fed Chairman William Dudley confirmed yesterday that rates will rise in 2015, perhaps at the central bank meeting on October 27-28 "if the economy continues to improve at current rates".
But, unlike on Friday, the message did not cheer the markets. The feeling is that the Federal Reserve is also sailing on sight while risk factors are growing: the only signal that could curb the rampant pessimism could come from China on Thursday, when the data on Beijing's manufacturing industry, already large, will be published consumer of raw materials.
GLENCORE SHOCKS (-29%), GIANT OF RAW MATERIALS
The latest dramatic knockout was suffered by Glencore, the world leader in the trading of commodities. The Swiss giant, which just completed a $2,5 billion capital increase and announced $20 billion in asset sales, was overwhelmed by the sales. In London, the stock lost 29%, reaching new lows since the listing started in 2011. This morning the script was repeated in Hong Kong and Sydney.
The sales were triggered by a report edited by the investment bank Investec: if the prices of raw materials continue to fall, by law, very little value will remain for Glencore's shareholders. Since the beginning of this year, prices have fallen by 75%, achieving the worst performance among the 100 stocks that make up the London FTSE100 index.
Serious repercussions on mining stocks, both in London and Sydney: AngloAmerica fell by 10%, RioTinto -4,7%, Bhp Billiton -6%.
AMERICA RISES AGAINST PHARMA SUPER PROFITS
A new torpedo has launched from Washington, this time aimed at the health sector, in response to the increase in the selling prices of pharma products which is making American public opinion indignant. Democratic members of Congress have written a letter to the president of Valeant asking for detailed explanations on the reasons for the sharp increase in two products for heart patients. The stock lost 16,6%.
However, the indignation was triggered by the decision by Turing pharmaceutical to raise the price of two life-saving drugs by 5.000%. Hillary Clinton has put pharma pricing reform at the top of her electoral agenda. The biotech index, one of the strengths of the Nasdaq, fell 6%.
ONLY MADRID LIMITS DAMAGES AFTER ILVOTO CATALANO
Europe has not escaped the general fall triggered right from the outset by the drop in profits of Chinese industrial companies (-8,8% in August). In Piazza Affari, the FtseMib index closed down by 2,7%. The London Stock Exchange lost 2,3%, Paris -2,7%, Frankfurt -2,1%.
The Madrid Stock Exchange, on the other hand, suffered a limited loss of -1,1%, in light of the fact that the two pro-independence formations together have the majority of seats, but not the absolute majority of votes: the risk of secession is receding. Today is the last day of month-end Treasury auctions: five-year BTPs (1,5-2 billion), 10-year bonds (between 2 and 3 billion) and 7-year CCTEUs (2,5. 3-XNUMX billion).
VW – 7,4% NO LONGER HAVE BRAKES. ONLY LANDI RENZO LAUGHS
Meanwhile, the storm over the auto sector continues which in just one week, since the start of the dieselgate scandal, has caused a fall in the sector of around 55 billion, more or less the amount of profits for a year. Investors are struggling to calculate how much the scandal on emissions could weigh and in the face of uncertainty they prefer to lighten up. The Stoxx index of European automotive companies dropped 3,6% yesterday, Fiat Chrysler dropped 4,9%. Also down were Peugeot (-5,2%), Renault (-4,6%) and Daimler (-3,2%).
Volkswagen is still leading the declines, which at the end of the day shows a loss of 7,4% to 99 euros, the lowest in the last four years (since September 2011). Since the outbreak of the Euro 5 diesel engine emissions scandal, the stock has fallen by 40%. Yesterday Audi announced that 2,1 million of its vehicles are fitted with the Euro 5 diesel engine.
The maxi recall campaign of vehicles linked to the diesel scandal has begun. In Italy the cars involved in the recall should be around one million, according to the press. The new CEO Matthias Mueller intends to act quickly and radically to regain the trust of the market.
Tesla -3,3% on Wall Street yesterday opened Europe's first plant in Tilburg, the Netherlands, intended to make the Model S electric sedan for European customers. In the plant, the assembly is done with the installation of the battery pack, transmission and rear axle.
The plant has its own internal test track for the cars it produces. This circuit, 750 meters long, is made up of 400 meters of asphalt and 6.000 rough road surface simulation points. In Tilburg, 450 Model Ss will be built per week.
Among the automotive stocks, Landi Renzo is an exception (+9,59%). The Italian multinational active in LPG and methane for motor vehicles is one of the few winners in the diesel competition storm.
THE MANAGED SUFFERS. BANKS ALSO IN THE SIGHT
Difficult day also for financial stocks, starting with managed savings: Investors expect weak accounts in the third quarter due to the turbulence that has hit the financial markets.
Mediolanum ended the session down 5,5%, on its lowest levels since last February. Last week Banca Mediolanum CEO Massimo Doris said the financial market turmoil in August translated into "zero" performance fees for Mediolanum, but that the group confirmed its forecast of net income and funding for the whole of 2015 higher than those of 2014. The stock reduces the progress since the beginning of the year to +19%.
The rest of the sector is also under pressure: Soul -5,3%. The target price was lowered by Citigroup to 9 euros from 7 euros. Azimuth -6%. Lower losses for Banca Generali (-2%) and FinecoBank (-2,2%).
The banks also suffer: Unicredit -4,6%, Intesa -2%, MontePaschi -5,2%. The worst was Ubi -6,1%. In Frankfurt DeutscheBank lost 4,8%. Generali falls by 2,1%.
TELECOM BRAKES DOWN AFTER VODAFONE'S FAILED WEDDING. DESCALZI. SAIPEM IS NOT FOR SALE
Bad day also for Telecom Italia, down by 1,9%. The news that Vodafone and Liberty Global have decided to abandon the merger project weighs heavily on the telecommunications sector. Inwit also slows down (-0,5%), since yesterday on sale. Among the oil companies, Eni -3%, Saipem -4,5%. The CEO of the six-legged dog Claudio Descalzi declared that “we have no interest in taking over Edison's gas assets. We are not buying right now." Furthermore, speaking of Saipem he added that, "it is a jewel for Italy, a company that covers all areas of action and we have no intention of leaving".
Lastly, industrial stocks were negative: Finmeccanica -2,6%, StM -4,7%, CNH Industrial -3,6%, Prysmian -3,2%.
