The spread of the virus in Italy is slowing down, but news arriving from China and US laboratories is fueling cautious optimism on the markets.
The PMI index on the expectations of purchasing managers of Chinese manufacturing companies returned to expansion in March, having risen to 53, from last month's record lows, when it collapsed to 35,7. It is not yet the return to normality, but the industry has recovered momentum. Consumption, driven by government vouchers (discounts on everything, even cars), will follow.
ABBOTT AND JOHNSON & JOHNSON RAISE HOPE
Two announcements shocked Wall Street: the pharma giant Johnson & Johnson (+8%) announced the go-ahead for testing a vaccine against Covid-19 on patients. Washington will contribute a billion dollars to the drug which could be ready in early 2021 thanks to the accelerator developed by the Melinda and Bill Gates foundation. Meanwhile, Abbott (+7%) has announced the launch of an ultra-fast kit for diagnosing the virus: in five minutes it is possible to have an initial summary response, 13 minutes to have the definitive result.
While awaiting liberation, the virus continues to strike: the times for closing cities are getting longer everywhere, from Italy to the USA. Even Russia is adapting to the emergency. And above all, the number of victims is rising. But the stock exchanges are already looking beyond.
SHANGHAI RISES, S&P 500 INDEX Flies
This morning the CSI 300 of the Shanghai and Shenzen lists gained 0,5%, the Hang Seng of Hong Kong 1%, the Kospi of Seoul 1,5%. Tokyo's Nikkei loses 0,6%. Japan has already set the new date for the Olympics: the start is set for July 23, 2021.
Great animation on the US markets, the fourth gain in the last five sessions: the Dow Jones rose yesterday by 3,19%, S&P 500 +3,35%, Nasdaq + 3,62%. Highlights Microsoft (+7%).
The dollar, generally little moved against the other reference currencies, appreciates against the Japanese yen, weakens against the Chinese yuan and is very close to all-time highs against the South African rand: the debt of the largest African economy was downgraded on Friday from Moody's to junk.
TRUMP AND PUTIN CONSULT ON OIL
Brent oil rebounds weakly to 23 dollars a barrel, +1%, from -8,7% yesterday. In the evening, Donald Trump and Vladimir Putin spoke on the phone about initiatives capable of stabilizing the oil market, where the surplus generated by the collapse in demand is pushing the prices of stored crude oil downwards.
Euro down to 1,102 against the dollar. Next Tuesday, the finance ministers of the Eurogroup will seek an agreement to break the deadlock on Coronabonds that have not overcome the opposition of Germany and the Netherlands. A solution will be sought to draw liquidity through a cross mechanism with the European Investment Bank.
LONG-TERM AUCTION (8,75 BILLION) UNDERWAY TODAY
The Italian Treasury will conclude the month-end auction round today. 5-year, 10-year BTPs, CCTEUs and 8,5-year off-the-run BTPs will be offered. The total quantity of issues (8,75 billion) does not exceed what was offered at the end of January (XNUMX billion), confirming the sustained but not exaggerated pace with which the Treasury is following its procurement path.
BUSINESS SQUARE BOUNCES IN THE FINAL
Yesterday the European stock exchanges, in negative territory in the first part of the session, started to rise on the wave of news from overseas. The situation of the bond market is much more complicated, where the ECB had to intervene with strong purchases on BTPs.
Piazza Affari (+0,3%) found its way up in the last half hour, after an uncertain session, closing at 16,872 basis points.
FRANKFURT +1,9%. THE HEALTH LICENSE IS ON THE WAY
Frankfurt is more toned (+1,9%). At the Helmholtz Center for Infection Research in Braunschweig they are working on a mass testing project, 100 a day, in order to check for the presence of the right antibodies to be immune to the virus. And go back to work.
Paris +0,62% despite the slowdown in banking, weighed down by the prospect of postponement of coupons. Bnp Paribas loses 5,44%, Soc Gen -5,06%.
BAGS, ZURICH CONQUERS MADRID
Outside the euro zone, London did well (+1,17%. The best was Zurich (+2,27%), the worst was Madrid (-1,74%). Just yesterday, the management company of the Swiss Stock Exchange approached the control of the Spanish Stock Exchange: Euronext withdrew, leaving the field open to the offer of Six (2,8 billion euros).
THE SPREAD ABOVE 200. BTP AUCTION TODAY
The yield of the BTP worsens to 1,48%, (+16 basis points) after exceeding the 1,5% threshold. The spread widened to 202 basis points. The Bund trades at -0,53% (-5 basis points).
In the afternoon, the reopening of the auction of the six-month Bot on Friday was deserted, offered to specialists for an additional 700 million.
COUPONS ONLY IN OCTOBER? INTESA AND UNICREDIT SUFFER
The tensions on the spread, but even more so the ECB's recommendation of defer dividends at least until October, they weighed on the credit sector. A similar recommendation could be made at Insurance from IVASS.
Intesa Sanpaolo (-6%) said that today's meeting of the board of directors will deal with the postponement of the dividend. Unicredit (-7%) communicated that it has put the remuneration plan for members on stand-by.
Mediobanca (-3,62%), Banco Bpm (-3,58%) and Ubi (-2,92%) were also down. Mps (-0,27%) and Bper (-0,04%) moved little.
More contained discounts for managed savings: Banca Generali (-0,4%) and Banca Mediolanum (-4,9%) have postponed the distribution of the coupon on the 2019 accounts.
Pharma stocks also shone in Milan. Extends Diasorin (+8%), one of the few stocks that record a gain for 2020. Recordati is also running (+7,65%).
JUVENTUS SCORE GOALS, STM ALSO
The Juventus title is in full swing (+5,07%) after the agreement with the players and with the coach Maurizio Sarri on the reduction of fees, an agreement that will save the company 90 million euros. Rome (+3,8%) and Lazio (+3,8%) are advancing in the wake.
Stm (+5%), relaunched by the Nasdaq, and utilities contribute to supporting the market, taking advantage of the falling cost of money: Enel +3,7%, preceded by Italgas (+6,3%), A2A (+ 5,95%), Snam (+5,3%) and Hera (+4,79%).
BREMBO SWENDS, NEW THUD OF ATLANTIA
Bad day for the automotive industry: Fiat Chrysler loses ground (-2,6%); sharp slowdown for Brembo (-7,64%). Cnh Industrial (-2,80%) fails in the morning's rebound attempt.
Atlantia is once again among the worst on the list (-7,5%).
FERRAGAMO IN RED, TOD'S DOES NOT PAY THE COUPON
Under the lens of analysts the luxury sector. Heavy losses for Ferragamo (-2,71%), on which Jefferies reduced the recommendation from hold to underperform, with a target price from 12,5 to 11 euros. Neutral rating instead for Goldman Sachs, which reduced the target price from 16,8 to 13,5 euros.
Brunello Cucinelli is down (-2,77% at 26 euros), on which Jefferies has cut the recommendation from buy to hold, with the target price falling from 32 to 30 euros.
Tod's has decided not to distribute any dividends. President and Vice President, Diego and Andrea Della Valle, have decided to waive their fees for the 2020 financial year.
GIGLIO GROUP (+9,6%) DANCES IN A MASK
Of note is Giglio Group (+9,63%). Banca Imi has confirmed the Buy on the e-commerce company, with a target price of 3,3 euros and an upside potential of 50%. The study expresses a positive assessment of the company's business model, which in a short time was able to convert some platforms to the procurement and sale of masks, useful for combating the Covid-19 epidemic thanks to its strong roots in China.
