The dollar holds back, oil rises (+4,60% for Brent to 47,60 dollars). And, by extension, Asian stock markets are lagging behind. Currencies and raw materials, these days, are the only driver of uncertain markets, without corporate or macro signals that justify significant insights. Indeed, both in the US and in Europe, the quarterly campaign gives cause for concern.
Against this backdrop, Tokyo dropped by 0,4%, in line with Hong Kong (-0,5%). Chinese stock markets are doing worse (Shanghai -0,8%) pending credit data, which are crucial for understanding to what extent Beijing wants to counter the economic decline. Vice Premier Zhang said China will deleverage the economy even through bankruptcies and not resort to large stimulus packages.
CONSUMPTION AND WALT DISNEY BETRAY WALL STREET: MACY'S-14%
The bad day on Wall Street on the wave of oil fluctuations helps to justify the caution of Asian stock markets. The S&P500 index dropped just under a percentage point. The Dow Jones did worse: -1,21%, the worst result since February. NASDAQ -1,02%.
The US stock markets have been victims of a series of negative data arriving from quarterly reports. Walt Disney dropped 4,04% after accounts announced Tuesday night. For the first in five years, the entertainment giant closes a quarter below analysts' estimates. The box office at the cinema is doing well, but the sports network ESPN and the generalist network ABC are suffering. Stop the expansion program in video games, the Infinity division has been closed.
The performance of consumer stocks is even more worrying. If the Fed was looking for indications on US consumer sentiment, the negative signal came loud and clear. Macy's shoulder bag (-15,7%): the first chain of shops and small supermarkets in the United States has cut its profit estimates for 2016 and the accounts for the quarter ended April 30 are below forecasts. Office Depot (-40,36%) and Staples (-18,34%) plummet after the veto on the merger raised by the Antitrust.
No less disappointing are the results of the branded industry, which is more exposed to consumption trends. Nike, the brightest stock of 2015, is down 3%. Fossil, the trendy US luxury brand (watches, bags and accessories) dropped 34%, to its lowest level since 2009. Only oil stocks supported the markets, thanks to the rise in crude oil following the publication of data on inventories in the United States , more than expected, as well as inventories of gasoline and distillates. Conoco Philips rose 1,9%, Halliburton +1,8%. In Piazza Affari Eni ended the session down by 1%. Tenaris -0,3%, Saipem -0,1%.
EUROPE, PROFITS IN HOLDING. MILAN LOSES 1,4%
European stock exchanges also slowed yesterday. In Paris the Cac-40 lost 0,46%, in Frankfurt the Dax-30 0,61%. The London-based Ftse-100 recovered in the final, gaining 0,19%. Futures signal a weak start for continental markets this morning.
The first quarterly balance sheet of the Old Continent disappoints. The average of profits drops by 21% and remains negative (-4%) even if oil and financial companies are subtracted. Only 42% of companies declare an increase in revenues, just over half (57%) beat even modest forecasts.
Since the beginning of the year, growth expectations for 2016 earnings have dropped from +7 to +0,3%. “All of this – comments Giuseppe Sersale of Anthilia – helps to explain the 9% of the European Stock Exchanges since the beginning of the year, even if it does not entirely justify it”.
In Milan, still under the pressure of the upcoming capital increases by the banks, things are worse: the Ftse Mib index, after reaching an intraday low of 17.509 points, closed at -1,32% at 17.698 points well below of the barrier of 18 points, once again at the bottom of the European ranking.
BOT, NEW RECORD DOWNWARDS. THE 50 YEARS OF MADRID KICKS OFF
On the debt securities front, the downward pressure on real rates continues, both in Europe and in the USA, confirming the negative expectations of operators. And so, despite a market crowded with offers (Germany, Greece and Portugal), the Bot auction was successful yesterday. The Treasury has assigned all 6,5 billion euros of BOTs per year against a demand that has reached 11,12 billion, with a rate falling to a new all-time low. Indeed, the yield fell to -0,14% from -0,081%.
The Italian auction round continues today with BTPs and will also include new offers on extra long bonds: in all up to 7,5 billion on the 3, 7 and 15-year benchmarks and on the March 2030 off-the-run. market with good volumes, the rate on the Italian ten-year benchmark remained just above 1,50% at 1,503% at the end of the morning, with the Btp/Bund spread at 137,9 basis points. The offer factor certainly weighs. Spain, meanwhile, has already started the placement of the bond dated July 30, 2066, with expressions of interest in excess of 10 billion euros and a yield of 250 basis points above the midswap rate.
BANCO POPOLARE -70% IN 2016. UNICREDIT IN THE SIGHT
Italian banks are suffering, their European cousins do not shine (Eurostoxx -1%). Deutsche Bank drops by 2,1%, Société Générale -1,4%, BBVA -2,1%. But the situation of Italian banks on the eve of the capital increases imposed by the European Supervisory Authority is much more dramatic.
Banco Popolare finished down 9% (-65% from the beginning of the year) to 4,40 euros after having reached an all-time low (.14%). Since the beginning of 2016 the loss is 70%. After all, as recognized by the managing director Pier Francesco Saviotti himself, the quarterly results "were not very good": the interest margin fell by 9% year on year to 352 million, -4,7% quarter on quarter. Net commissions were down 7% year over year to $317 million.
The shower of sales hit the betrothed Banca Pop. Milan (-6,3%), despite the good results, anchored to the shareholding relationships established in the merger agreement.
Unicredit is still sharply down: -3,7% to 2,84 euros, close to the lows of the year. Despite Federico Ghizzoni's reassurances, many analysts believe that a forthcoming capital increase is inevitable. JP Morgan analysts cut the target price on the stock to 2,80 euros from the previous 3 euros. Judgment remains Underweight. Intesa (-1,6%) and Monte Paschi (-2,4%) are also in negative territory.
Credit Valtellinese deserves a particular note, down by 10,6% and slipping to its historic lows of 0,5020 euro. The loss since the beginning of 2016 is 55%. The banking group closed the first quarter with a net profit of 5 million euros, a decrease of 78,32% compared to a year earlier. Today, with the quarterly reports of Bper and Ubi, the curtain falls on the quarterly credit reports.
MEDIOBANCA (+1,7%) READY TO ASSIST VENETO BANCA
Mediobanca escapes the general disaster, +1,7% after the good results announced in the morning. Alberto Nagel said that the Piazzetta Cuccia bank is ready to evaluate an intervention in the capital increase and listing operation of Veneto Banca: "We would evaluate an investment in Veneto Banca in the context of the listing, if it were indispensable to complete it" .
The institute expects to close the acquisition of the 89 Barclays branches in Italy, announced in December, by the end of the summer or in any case by 30 September. Nagel then confirmed that the next industrial plan will be presented "in the autumn, approximately in the month of November".
Finally, the RCS dossier +2,21%: “I don't know whether it is probable to expect alternative proposals. I know that now there is only one proposal on the table, which is that of Cairo and which must be evaluated”.
Poste also bad: -2% despite the fact that m after the quarterly: Citigroup confirmed the buy rating and the Target price at 8 euros: the words of the Minister of Economy, Pier Carlo Padoan, weighed on the possibility of selling a further stake of society.
ADVERTISING BETRAYS MEDIASET. METROWEB: ENEL FAVORITES OVER TELECOM
Mediaset was down sharply (-4,9%) after first quarter results slightly worse than expected. What weighs heavily are the market's doubts about how much it will cost the Biscione to leave Premium's pay TV, soon to be sold to Vivendi. "There is a big question mark over how much the sale of Premium to Vivendi will cost," an analyst at a major Italian bank told Reuters. Furthermore, the prospects for advertising revenues are less brilliant than expected: the deputy general manager of Pubblitalia, Matteo Cardani, said that the growth of Mediaset's advertising revenues is seen in the low "single digit" part in May.
Meanwhile, the race for Metroweb is progressing. The rumors give Enel as the favorite (-0,3%), provided that the company raises the offer to the level of that made by Telecom Italia (-2,3%), equal to 821 million. If the Enel hypothesis goes through, Metroweb would be controlled by Enel Open Fiber, Cdp and perhaps the F2i fund, depending on whether it decides to monetize and sell or stay. CDP would therefore have a significant stake in the company destined to build the new generation telephone network. This is one of the reasons why the Cassa would prefer the Enel option to that of the former incumbent of the telecommunications companies which instead offered to buy two-thirds of the capital immediately and to go up to 100% within 3/4 years or to buy all Metroweb immediately.
Meanwhile, Fidentiis has decided to reward the quarterly results of the electricity company by raising the recommendation to Buy from Hold. The target is adjusted to 4,50 euros from 4,0 euros. On the other hand, the definitive stop by the EU to the merger between =2 (Telefonica) and H3G of Hutchison Whampoa weighed on Telecom.
MONCLER, SUPERSTAR TITLE. SAFILO IN FREE FALL
Among the positive notes, the expansion of Moncler (+4,6% to 15,66 euros, maximum for the day at 15,93), the main title of the first part of 2016 with an increase of 20%. After the accounts for the quarter, Ubs reiterated the Buy recommendation, adjusting the target to 17,50 euros from 17,20 euros.
The company ended the first quarter with a much stronger than expected rise in revenues of 18% to 237 million euros, +17% at constant exchange rates. Sales in North America and Asia went much better than expected.
In the rest of the sector, Ferragamo loses 1,9%. Tod's (+0,33%) released the accounts after closed markets: the first quarter closed with a turnover down by 3,1% to 249,6 million, below market expectations. The company warns that analyst consensus for 4% revenue growth looks "a bit challenging" today.
Luxottica still suffers: -3,5% after the downgrade of Ubs. The collapse of Safilo was dramatic (-9,1%): the quotation slipped to the lowest levels of the last three years at 6,695 euros. Kepler-Cheuvreux rejected the quarterly accounts (turnover -7% to 301 million) by cutting the target price to 7 euros from 7,50 euros. Reduce judgment confirmed.
INDUSTRY, LEONARDO AND PRYSMIAN PROMOTED
Leonardo stands out among the industrialists (+3,7%): the former Finmeccanica was promoted by JP Morgan to Overweight from Neutral, target price at 13,0 euro. Prysmian's rally continues (+2%). Banca Imi increased the target price from 22,2 to 23,5 euro and confirmed the add recommendation. Weak Fiat Chrysler (-1,4%), StM -1%. Brembo still in strong evidence (+7,91%). Astaldi stands out in the Star segment (+8,31%) after the presentation of the new business plan.
