Just a pit stop or a U-turn? That's the question markets are asking after yesterday's setback. Much will depend on the words that Jerome Powell will use tonight at the end of the Fed meeting. A difficult mission for the banker, who will have to reassure the stock exchanges on the future of stimuli to support the economy, without, however, fueling the euphoria on the recovery, for now more on paper than in reality. Anthony Fauci gave him a hand: the emergency is not over, he reiterated admonishing a country glued (with the exception of Donald Trump) in front of the TV for the funeral of George Floyd in Houston. The lists reflect this state of uncertainty, while celebrating the crossing of another historic threshold: during yesterday's session, the Nasdaq flew over 10.000.
TIDY RISES IN ASIA, OIL DOWN. AND THE GOLD RISES
The Dow Jones Asia global index gained 0,3% this morning. The stock markets of Hong Kong, Tokyo and Taipei rose slightly. The Shanghai Composite is down 0,5%. The Mumbai Stock Exchange +0,7%.
Producer prices in China are at a four-year low, confirming that demand remains weak.
The US markets were down slightly yesterday: Dow Jones -1,09%, S&P 500 -0,78%. The Nasdaq bucked the trend: +0,29%
NASDAQ AT THE HIGHEST THANKS TO SUPER APPLE
The rally was favored by the leap of Apple (+3,2%): Apple is preparing to install chips of its own production on iPhones and Macs. The official announcement will arrive on the 22nd.
Brent oil is down 1,4% to $40,4 a barrel. Operators are evaluating whether the extension of the production cuts established by OPEC+ and its allies a few days ago will be adequate to guarantee the balance between supply and demand. In Milan, Saipem (-2,7%), Eni (-2,98%) and Tenaris (-1,77%) slow down.
The rally in shares does not stop the purchases of gold: this morning the price is little moved compared to yesterday, at 1.715 dollars an ounce.
EUROS AT THE TOP. PINK AVALANCHE AT THE TOP OF EUROPE
The euro is at its highest level in the last three months, at 1,343 against the dollar, on the eve of the tug-of-war over the Recovery Fund, the key stage for relaunching the economy and the EU's political action, now tinged with pink.
Indeed, yesterday the Portuguese Mario Centeno resigned as finance minister and president of the Eurogroup. In her place will come the Spanish Nadia Calvino, strengthening the pink avalanche at the top of Europe: Ursula Von Der Leyen at the head of the European Commission, Christine Lagarde president of the European Central Bank and Angela Merkel at the helm of the first economy of the euro area.
EUROPEAN EXCHANGES IN BRAKING: MILAN -1,55%
On the seventh day, the Bull decided to rest, waiting for what may emerge tonight from the words of Fed chairman Jerome Powell at the end of the meeting of the Monetary Committee. But the drop didn't do much harm to Piazza Affari, which contained the losses by limiting the damage in the finale. The GDP data of the Eurozone contributed to depressing the price lists, falling to historic lows in the first quarter, registering a -3,6% (revised, however, an improvement on the initial -3,8%).
PEUGEOT DOWN, BAT SUFFERS IN LONDON
Milan closed the session with a drop of 1,49%, to 19,930, below the barrier of 20 thousand points.
Paris also down (-1,55%). Banks, planes and cars are holding back: Psa -4%. Lvmh holds up (-0,1%): Tiffany says she is confident about the conclusion of the sale to the French group.
Frankfurt -1,55%. German exports in April recorded a drop of 24%. Telefonica Deutschland drops 5,7% after signing a deal to sell thousands of phone towers to Telxius Telecom for €1,5 billion.
In London (-2,15%) Bat (-3,7%) suffers after cutting its annual targets due to the damage to demand inflicted by the severe lockdown measures in emerging markets.
Madrid was also in the red (-1,84%). Only Zurich is saved (+0,2%).
SCHNABEL (ECB): "I DO NOT RULE OUT RATE CUTS"
Interest rate cuts remain a viable option for the European Central Bank, but asset purchases are now a more appropriate tool to stimulate the eurozone economy. This was stated by ECB Executive Board member Isabel Schnabel. “We currently see asset purchases as a more effective and efficient tool, also considering the potential side effects,” Schnabel wrote on Twitter. "However, our experience with negative interest rates has been positive and lowering interest rates remains an option for the future."
In the aftermath of President Christine Lagarde's speech to the European Parliament, the member of the Governing Council of the ECB, Olli Rehn, warned that "the coronavirus crisis should not be used to introduce a permanent increase in public spending which would further exacerbate an already substantial gap in sustainability”. The number one of the Central Bank of Finland spoke of the risks of deflation on the rise in Europe.
THE SUPPLY OF EU PAPER IS GROWING, BTPS SUFFER
In a euro market crowded with issues due to the increase in cash requirements due to the anti-Covid measures, the BTP suffered, ending yesterday's session down, with the spread widening again while remaining below 180 points (177 in closure) and the 10-year yield which reaches 1,46%.
Today the Treasury is auctioning 7 billion 12-month BOTs.
RAIN OF REQUESTS FOR ATHENS AND DUBLIN BONDS
The market conditions for those who have to finance themselves are exceptionally favourable. Ireland has been inundated with requests for its new 70-year bond loan: XNUMX billion euros, a new record.
Requests for the new Spanish twenty-year anniversary have reached 78 billion euros. Greece has also launched a ten-year agreement for 3 billion, receiving offers for 16 billion. Finally, Germany mandated a pool of banks to reopen the Bund expiring in August 2050 with a 0 coupon. The 0,31-year Bund trades at -XNUMX%.
BANKS, DIVIDENDS BANNED UNTIL JANUARY 2021
In Piazza Affari, the banks lost share, penalized by the request not to pay dividends until the end of January 2021 arrived from the European Systemic Risk Board (ESRB), the regulatory entity chaired by the president Lagarde herself. Previously, companies were asked to freeze dividend distributions until the end of October.
THE BIG WITHDRAW, THUMP OF MPS
Unicredit leaves 3,6% on the ground. Heavy losses for Ubi (-5,4%) and Intesa San Paolo (-4,62%). The Antitrust has raised doubts about the merger between the two banks: in some provinces, there would be a high threat of dominance, to be remedied with the sale of branches, in addition to those that will be sold to Bper Banca (-1,43%). Mps drops by 5,08%.
According to Equita Sim, the ECB's decision increases the risks on the payment of the second tranche of the dividend of Generali (the stock has a 3% yield) and Unipol (the coupon returns 5,7%).
THE EU ANTITRUST STAKES FCA BACK
Among industrial stocks, FCA loses ground (-4,39%): the European Commission, the subject of surveillance on excess concentration, raises objections to the merger with Peugeot due to its dominant position over some segments of small cars. Judgment will come on the 17th.
NIKOLA IN ORBIT LANCIA CNH
Exor can console itself with the leap of Cnh Industrial (+2,7%). The company owns 7,1% in Nikola (electric motors and hydrogen), has been listed on Wall Street since 3 June and in a few sessions its capitalization has risen to 28 billion dollars (+104%) exceeding the value of FCA . This participation at market prices is now worth around 1,7 billion.
Among the industrialists, a sharp decline for Leonardo (-3,6%). Positive Stm and Prysmian, both +0,29%. Diasorin rebounds (+1,3%).
ATLANTIA DOWN, MEDIOBANCA SIZES AUTOGRILL
Atlantic -2,7%. The quarterly is scheduled for tomorrow. Autogrill was also in the red (-4,89%, at 5,84 euros), on which Mediobanca Securities reiterated the underperform recommendation and the target price of 5 euros, after the US Department of Transportation reported a decline in traffic motorway in April by 39,8%.
COLAO CHARGES NEXI
Nexi +2,5%. The Task Force led by Vittorio Colao proposes to increase digital payments through incentives to be provided to shopkeepers and fines for those who do not comply.
Among the mid caps, more light money on De' Longhi (+4,53%). Sogefi (-6,89%) and Ascopiave (-5,05%) lost ground.
