Politics and central banks are destined to dominate the scene of the financial week, which however opens with a disturbing question: is the hi-tech bubble about to burst, the main propellant of Wall Street's rise? This morning on the Asian stock exchanges, the storm of Friday on the US Stock Exchanges was repeated when the Bigs, including Apple, Facebook, Microsoft and Netflix, had accused losses of more than 2%, causing the Nasdaq to fall to -1,8% (against -0,1 .500% of the S&P 0,5 index, Dow Jones +XNUMX%). It all started with a few warnings about the dangers associated with investing in cyclical companies from a senior Goldman Sachs executive.
Same script this morning in Asia. Stocks such as Hon Hai (Apple's top supplier), the Korean LG or the Japanese giant Soft Bank leave 2,5% to 5% on the ground. Samsung loses 1,8%. Tencent also fell in China (-1,2%). The landslide conditioned the indexes downwards: in Tokyo the Nikkei dropped 0,6%, the Korean Kospi -0,9%, Hong Kong -1,2%. Shanghai and Mumbai -0,5%.
ARABIA AND RUSSIA RENEW THE AXIS ON OIL
Brent-type oil is up 0,5%, at 48,4 dollars a barrel. Saudi Arabia and Russia have renewed their commitment on production: the two energy ministers of the two countries met over the weekend in Kazakhstan. Khalid Al Falih said that in the next three six months the decline in strategic inventories of consuming countries will accelerate.
FRANCE EN MARCHE!, LONDON BORGED
The euro slightly appreciated against the dollar and the pound. In Europe, the tech storm is destined to repeat itself, albeit with less intensity given the more modest weight of the sector. In the foreground is the electoral news, starting with France illuminated by the triumph of En Marche!, Emmanuel Macron's party which in the first round of the legislative elections (only 49,6% of eligible voters voted) won a third approximately of the votes by reserving a large majority at the next national assembly. The socialists collapse, Marie Le Pen largely downsized.
The British political situation is much more complicated: former Chancellor of the Exchequer George Osborne defined Theresa May as “a walking corpse of a woman”. The British Parliament is convened for Monday 19, in the presence of the Queen.
TRUMP IN THE VIEWFINDER, THE INVESTIGATION TOUCHES SESSIONS
Donald Trump's position in the US is no less difficult. Tomorrow the investigation into Russiagate will resume in Congress: Attorney General Jess Sessions will be questioned who, under oath, had denied relations with Moscow diplomats before the vote. Instead, it was ascertained that Sessions met the Russian ambassador on at least three occasions. Meanwhile, Congress has approved the cancellation of the finance rules envisaged by Dodd-Franck, but the provision will certainly be rejected by the Senate.
FIRST STOP FOR GRILLO, PD HOLDS, CENTER RIGHT RISES
Finally Italy. The administrative test, limited but significant, recorded the first significant setback of the 5 Star Movement, excluded from the ballots of the main cities, including Genoa. The center-right ascends, holds the leadership of the Democratic party. Piazza Affari, which eloquently expressed its hostility to early elections last week, is however more concentrated on the banking game than on politics.
Between today and tomorrow, the system solution for Banca Popolare di Vicenza and Veneto Banca could emerge. With the decisive contribution of Banca Intesa and Unicredit to the operation. But there are still elements of uncertainty: the form of the vehicle for the recapitalization and the possibility of having confirmation, to avoid surprises, from the ECB and the European Commission of the fact that the private amount necessary to trigger public intervention is actually 1,25 billion.
Still shivering around Monte Paschi. Funds interested in buying non-performing loans are pressing for a "discount" on the sale price (26 billion). In fact, the current agreement provides for the purchase of the NPLs from a vehicle intended to be financed with 3,3 billion of senior securities with a state guarantee plus 1,750 billion of junior and mezzanine tranches. The subjects involved (Atlante 2, Credito Fondiario and in particular Fortress), which have an exclusivity until 28 June, ask for a price review because a part of the non-performing loans has been accumulated after the previous due diligence. Hence the request to go down from the current 20-21% of the nominal value. But this entails the risk of restarting the negotiations all over again.
TIME FOR US RATES TO RISE, BOE AND BOJ COME TOGETHER
It will be a week marked by central bank decisions. Wednesday, at 20 hours Italian, Janet Yellen will hold the press conference after the Federal Reserve board meeting. The markets consider the second increase in rates of 2017, from 1 to 1,25%, very probable, almost obvious, despite the signs of a slowdown in the US economy. No less attention will be devoted to the start of the process of reducing the Central Bank's balance sheet, which has grown in the years of crisis to 4.500 billion dollars (more than 3.500 billion accumulated since 2008). The Fed has already announced that the operation will begin this year. It is now a matter of having more details on the modalities that will have to ensure a soft decline.
Thursday will be the turn of the Bank of England. Governor Mark Carney's task this time will be really complicated. The outcome of the elections has introduced new question marks on the pound and on the economic situation, which is slowing down. It is likely that the old lady's board will choose not to move. According to ING analysts, the situation will not change at least until 2019, the expected date for the conclusion of the Brexit agreements. The Canadian rating agency DBRS will update the UK's sovereign debt rating next Friday.
The week will close with meetings of the Central Banks of Japan and Russia. Analysts take it for granted that Governor Haruhiko Kuroda will not touch rates, persevering in the policy of sub-zero yields. The only change on the Rising Sun should concern the abdication of Emperor Akihito, 83, this week. It will be the first time in history.
Finally Russia: in April Elvira Nabiulina cut the cost of money by half a percentage point, to 9,25%. Protests will be held today in major cities across the country. The occasion will be offered by Russia day, the feast of the Russian republic.
TREASURY AUCTIONS AT THE START, THE MANOVRINA TO VOTE
With the polls just closed, the Italian Treasury kicks off the mid-month auctions. This morning it will be the turn of the 12-month Bots (6 billion). Tomorrow will be the turn of the 3- and 7-year BTPs (5,5 billion in all).
Between Wednesday and Thursday, the Senate's yes is expected for the decree that corrects the public accounts by 3,4 billion euros, in all probability through a vote of confidence from which, however, the Mdp threatens to withdraw without having a second thought on the vouchers.
Key appointments also for the Eurogroup and Ecofin which, among other things, will examine the requests presented by Minister Pier Carlo Padoan to soften the next budget. The review of the aid plan for Greece will also be on the Eurogroup table.
INCREASES: UBI AND PININFARINA START. INDITEX ACCOUNTS COMING SOON
Banks still in the foreground in Piazza Affari. This morning the capital increase of Ubi Banca (+4,9% in the week) of 400 million will start, good to support the integration of the three good banks (Etruria, Marche and CariChieti) purchased for a symbolic euro. The operation, promoted by the analysts of Equita sim, provides for a discount of approximately 26,1% on the theoretical price ex right (terp) on the Stock Exchange on the day prior to the announcement: the 167.006.712 new Ubi ordinary shares will be offered for subscription at 2,395 euros, at the rate of 6 new titles for every 35 owned.
Spotlights turned on today on the Stock Exchange on Banca Carige after the vote that on Friday disheartened the CEO Guido Bastianini due to disagreements with the main shareholder Vittorio Malacalza, mainly on the price and on the methods of selling the NPLs. An internal general manager should be appointed on Tuesday, who will be entrusted with the powers of the former CEO for the time being.
Pininfarina's capital increase begins today and will end on June 30th. The rights will be negotiable until 26 June. The adjusted reference price is set at 2,188 euros. To follow, Wednesday 19, the accounts of Inditex, the clothing giant controlled by Amancio Ortega. According to Citibank analysts, profits for the quarter rose by 16%, against an increase in sales of around 7%.
The FtseMib index of Piazza Affari archived a positive week: in five sessions it gained a total of 0,9%, bringing the performance since the beginning of the year to +9,7%. The Frankfurt Stock Exchange gained 1,1% during the week, Madrid +0,5%. For Paris the decrease was 0,8%, London -0,4%.
