The banking crisis is far from over with the stress tests, judging by the reaction of the markets. But August opened with a new emergency: the collapse of oil, which slipped below 40 dollars. US crude trades at 39,93 dollars, Brent fell yesterday evening to 41,92 dollars from 43,85. Compared to prices at the beginning of June, above 50 dollars, the drop has exceeded 20%.
The fall in oil is not the only news at the beginning of the month. The Nasdaq, under the impetus of Alphabet and Google, is one step away from the historical record. Meanwhile, Japan awaits Shinzo Abe's plan. In short, August is once again a hot month for price lists.
Faster trend for American stock exchanges. The S&P 500 index, after setting a new high in the session, closed down by 0,13%, under pressure from oil stocks. The Dow Jones is also down (-0,15%). The Nasdaq (+0,43%) instead rose to its highest level since 21 July 2015, at 5.184,20.
Tokyo slows down (-0,9%) pending government announcements. Today Shinzo Abe will reveal the details of the economic stimulus plan (28.000 billion yen, or 277 billion dollars), which is only partly the result of new spending. Typhoon Nida caused the suspension of trade in Hong Kong. Australia's central bank cut interest rates tonight, a quarter of a percentage point reduction to 1,5%. Sydney, however, fell by 0,4%.
MILAN -1,7%: THE WORST STOCK AGAIN
The mix of banks and oil has proved toxic for European stocks. In Milan, as always the worst stock exchange when tension on the banks rises, the session closed with the FtseMib index down by 1,7% to 16.554 points. The Paris Stock Exchange lost 0,7%, Madrid -0,9%, Frankfurt closed in parity. A slow opening for the European stock exchanges is looming this morning. The most important Appointment concerns the quarterly accounts of Banca Intesa. The board of Commerzbank is also in the spotlight.
HEDGES ATTACK CRUDE: AND ARABIA CUTS PRICES
Hedge funds have resumed betting on the decline in crude oil. On the occasion of the last contract expiry on July 26, short positions rose by 56 million barrels while forward buyers practically disappeared. Speculation is counting on various factors: the recovery of US shale oil production, the high level of inventories in the US and, above all, on the increase in sales by producers. Iran's exports continue to rise, Libya is re-emerging on the market. No less important, yesterday Saudi Arabia cut its export prices to Asian countries.
The trend reversal had immediate consequences on the Stock Exchanges. The S&P Energy index in New York lost 3,3%. Chevron -3,3%, Exxon -3,1%. The European lists only partially recorded the plunge in prices. The European Stoxx index fell by 1,6%. In Piazza Affari Eni fell by 1,9%, Saipem -2,3%, Tenaris -2,6%.
ALPHABET AND APPLE IN THE RALLY THANKS TO MEDICINA AND… DIDI
Field day yesterday for tech stocks. Apple's march continues (+1,8%) which has achieved a 9% increase since the day of the results. The Chinese company Didi, in which Apple announced in May that it had invested $1 billion, bought Uber's Chinese business. The operation takes the form of a merger. The post-aggregation entity is expected to be worth $35 billion. Uber, after investing over two billion dollars in China, has decided to throw in the towel and abandon expansion plans in the country.
Alphabet +1,2%. The former Google has risen to over 800 dollars (new high) on the push of the alliance with the English Glaxo. the two groups will create a joint venture called Galvani Bioelectronics (45% Alphabet and 55% Glaxo), which will invest over 700 million dollars over the next seven years in bioelectronic medicine, the new field of medicine that aims to intervene in chronic diseases by implanting patients' bodies miniaturized electronic devices, capable of modifying the electrical signals that pass along the nerves. Glaxo researchers are convinced that in about ten years through this process it will be possible to cure diseases such as arthritis, diabetes and asthma.
Much more contrasted the trend of the companies controlled by Elon Musk after the decision of merge Solar City (-7,4%) and Tesla (-2%).
BANKS, STRESS TESTS DO NOT CONVINCE THE MARKETS
Europe and Italy in particular remain focused on the credit issue. The verdict of the stress tests, which decreed the solidity of 50 of the 51 major European banks, did not convince the markets. There is a doubt among analysts that the tests have not been effective enough. The Stoxx index for the sector fell by 1,8%.
In Europe, Société Générale (-3,7%), BBVA (-3,4%), Santander (-1,9%) and Deutsche Bank (-1,7%) fell.
It did not go better for the Italian banks. According to JP Morgan, with the exception of MontePaschi, the four banks subjected to the stress tests could remain under pressure until the sale plan of Montepaschi's non-performing loans is completed.
UNICREDIT SINKS: THE INCREASE IS NOW DISCOUNTED
Unicredit paid the highest price. After an upward start together with all the other banks, the share drastically changed direction, leaving 9% on the ground at 1,995 euros in the final session. The bad performance is partly justified by the outcome of the European exam, passed by the Milanese bank with great difficulty (only five banks did worse in the test).
Above all, however, weighs the feeling, supported by the judgment of analysts, that the bank will soon have to proceed with a robust injection of fresh funds, at least 5-6 billion, mostly by resorting to a capital increase. And it won't be easy. “The lack of visibility into the range of measures that the bank's new management will implement makes us cautious,” comments Ubs.
Tomorrow the Bank in Piazza Gae Aulenti will announce the half-yearly accounts. The subsidiary FinecoBank was also down (-1,1% to 5,25 euro): the multi-channel bank announced that in the second quarter net profit rose to 66,5 million from 46 million a year earlier.
ALSO UNDER FIRE INTESA, THE FIRST OF THE CLASS
Banca Intesa dropped 3,5% despite the fact that the company was the most solid institution in the Old Continent. Today the accounts for the first six months will be announced, the right opportunity to demonstrate that a recovery of profitability of the system bank of the Italian economy.
The balance for the rest of the sector is negative, starting with the institutes that will approve the six-monthly report this week. Ubi, which will meet the board of directors on Friday, lost 6,2%, Bper -5,6%, Pop.Milano -6,2%, Banco Popolare, after holding positive ground until 12, closed at -5 %.
BUT THE MARKET LIKES THE MONTE PASCHI PIANO
The exception was Monte Paschi (+2% to 0,3145 euro), which was not weighed down by the fact that it was judged the worst bank, in terms of solidity, among the 51 examined by the EBA: in the event of an adverse scenario , with a strong recession of the economy for three years, the institution would end up with a Common Equity Tier 1 (Cet 1) even negative by 2,2%.
But the market has shown that it appreciates the recovery plan approved by the ECB which provides for the sale of all the group's non-performing loans. However, the shareholders will be called to make a strong sacrifice because the whole plan is completed with a capital increase of 5 billion, which will be launched after the sale of the NPLs.
The increase will be guaranteed by a consortium of eight international banks, led by Mediobanca and JP Morgan. For Exane it is a "well thought out" plan, even if it faces risks associated with its realization. Equita Sim confirms the hold recommendation on the stock while bringing the target price from 0,35 to 0,34 euro. “the spin-off plan of the bad bank is a solution to the critical issues but the extent of the increase from 5 billion makes the visibility of the operation still low.
Moderately negative closure for insurance companies: Generali loses 0,4%, UnipolSai -1,5%, Unipol -1,2%.
AUTO: SALES GROWTH SLOWS DOWN, THE FCA SHARE RISES
Waiting in Piazza Affari for the impact of car sales in July, also decelerating in Italy as already in the USA. Fiat Chrysler (-1,1%) registered 39.395 cars in Italy in July, obtaining a 28,9% share, up from 28,38% a year ago.
In July, the Italian car market recorded a limited increase in sales of 2,9%, effectively continuing the slowdown in growth already seen in June. Forecasts for the second half of the year remain positive, but at a decidedly slower pace than in previous months. In the January-July period, the DMV registered a total of 1.179.068 cars, with a variation of +17,10% compared to the January-July 2015 period, during which 1.006.867 were registered.
Among the industrialists, Leonardo is also in strongly negative territory (-3,7%).
Good rise for Recordati (+1,2%).
SELL TO MEDIASET: WE HAVE ALTERNATIVES IN EUROPE
Mediaset falls (-1,4%) while the duel with Vivendi escalates: in an interview the CEO of Vivendi said that the French group may not even make any agreement with the Italian company of the Berlusconi family and look for other partners. And speaking of the agreement on Premium, Arnaud de Puyfontaine adds: "We thought we were buying a Ferrari, but in reality it was a Fiat Punto".
RCS, THE TAR REJECTS DELLA VALLE'S REQUESTS
In luxury, the abrupt decline of Tod's (-4,1%) should be noted. But what marred Diego Della Valle's mood was the news that the Lazio Regional Administrative Court rejected the request of the consortium Imh, Diego Della Valle and Pirelli to cancel, subject to suspension of effectiveness, the statement with which Consob on 22 July decided not to suspend as a precautionary takeover bid competitor Cairo Communication, which won the game for control of RCS.
However, "all the procedural and substantive issues raised with the appeal remain with the collegiate office, both in the precautionary phase and in the merits phase". The administrative tribunal has set the council chamber for 30 August for the collegial discussion.
