Irrational instincts work both ways: sometimes they take the form of euphoria in the service of Taurus, but when uncertainty combines with fear, the effect can be truly devastating, as demonstrated by the storm that has hit the banking sector . All this after the exercise of the stress tests which, as Professor Donato Masciandaro anticipated last week, as developed by the EBA "are useless and risk accentuating the volatility of the securities".
And so the August emergency this year concerns European banks, especially the Italian ones. The economic stimulus package launched in Japan by Shinzo Abe fades into the background. Or the slowdown of US cars, a new sign of the economic slowdown. It is worth reflecting on the advice coming from Christian Mueller Glissman, global strategist at Goldman Sachs: stay away from the stock exchanges in the next three months. A bear market is not looming, but "there is no room for growth in the short term: the shares have reached prices that have no room for further growth in the short term". We'll see for 2017.
COLD TOKYO AFTER THE ABE PLAN. MILAN AGAIN BLACK JERSEY
The Tokyo Stock Exchange was skeptical (-1,7%) after the announcement of the stimulus package launched by Prime Minister Shinzo Abe. A large part of the interventions, notes Nomura, were already foreseen in the 2017 budget. The yen lost 0,3%, government bonds were stationary after the sharp rise in yields on Monday. Negative Sidney (-1,3%), Hong Kong does worse (-1,6%) at the reopening after typhoon Nida.
American Stock Exchanges close in the red: the Dow Jones index falls by 0,5%, S&P 500 -0,64%. The Nasdq also held back (-0,9%), which closed at 5.173,73, moving away from the new record. The market slowdown coincided with disappointing auto sales data in July. The fear is that the US car market, which has been growing continuously for years, has reached the peak of the cycle. A fear that expands to the entire American Stock Exchange which has been traveling at historic highs for days. Some analysts note that the average valuation of the S&P 500 index is 18,4 times expected earnings for the end of this year, one of the highest levels in the last 10 years.
A day of ups and downs for oil, which after an attempt to recover in the evening returned to losing share, with the American WTI at 39,5 dollars a barrel (-1,3%) and Brent at 41,8 dollars (-0,7 .0,8%). Sector stocks recovered in the evening: Exxon +0,5%, Chevron +2%. In Milan Eni -2,5%, Saipem -1,5%, Tenaris -XNUMX%.
Piazza Affari (-2,8%) was again awarded the black jersey on the European lists, followed by Madrid (-2,7%), Paris (-1,81%), Frankfurt (-1,76%) and London (-0,72%). Futures signal a bullish start for Europe.
Weak final for the BTPs. The ten-year term closes at 1,222%. But the German Bunds are doing worse, so the spread drops to 131 points (from 133). However, the worst performance is that of British Gilts: the market is preparing for the probable rate cut that the Bank of England should launch on Thursday.
STOXX 50, DEUTSCHE BANK AND CREDIT SUISSE RETIRE
The storm over European banks unleashed at dawn after Commerzbank (-6%), the second largest German bank, launched its profit warning on 9,1 results at 2016 in the morning. Since then, sales have fierce on all stocks in the sector, starting with the Bigs. The Stoxx European banking sector index lost 3,3%. In particular, Deutsche Bank fell by 4,8%. Credit Suisse lost 6,1%.
The two banks will exit the Stoxx50 index starting next Monday, 8 August. In the index which summarizes the performance of the 50 most important European companies, the two banks will be replaced by the French construction group Vinci (+0,2%) and by the Dutch Asml (-0,9%), a company in the semiconductor sector. During 2016, the quotation of the two banks fell by 46%.
Today the spotlights will turn on the accounts of the French banks Crédit Agricole and Société Générale. Even more awaited, however, is the half-yearly Unicredit.
DOUBTS ABOUT NPL AND INCREASE DINISH MONTE PASCHI
Once again the epicenter of the earthquake that is upsetting the credit system is Italy. Hedge funds have once again targeted Monte Paschi (-16%) which in one morning canceled a large part of the gains made after the announcement of the recovery plan. After the initial consensus, in fact, doubts arose about the project which envisages the transfer of all its non-performing loans, equal to 9,2 billion euros, to the Atlante fund and the launch of a capital increase of 5 billion euros . Eight banks are ready to put the guarantee on the sale of the new shares.
But the Atlante fund will have to take charge of non-performing loans at a price (33%) considered too high by some interested parties, starting with the social security funds. There is no shortage of uncertainty over the 5 billion euro capital increase: the 8 banks that signed the letter of intent said that their participation is subject to market conditions and the results of preliminary investigations into the market's willingness to absorb this large mass of paper.
CAIO: ATLANTE 2 STARTS ON 8 AUGUST
The terms for joining Atlante 2, the new bank rescue fund, will expire on 8 August, revealed the CEO of Poste Italiane, Francesco Caio, on the sidelines of the conference call on the half-yearly accounts. "We will decide on Poste Vita's contribution in the next few days", added Caio, specifying that Poste Vita's participation in Atlante 2 will in any case be lower than that reserved for Atlante (260 million). The company closed the first semester with total consolidated revenues of 17,7 billion, from 15,95 billion a year ago, and a net profit of 565 million from 435 million (compared to a consensus of 473 million).
INTESA ALSO UNDER FIRE (2016 EARNINGS INCREASE)
Sales did not spare Intesa closed down by 3,8% at 1,829 euros on the day of publication of the results for the second quarter of 2016closed with a net profit of 901 million euros, down slightly from 940 million a year earlier, but above expectations (741 million the consensus of the analyses). The Bank confirms its commitment to distribute cash dividends for the current year for 3 billion. For the whole of 2016, Intesa Sanpaolo's management expects pre-tax profit and consolidated net profit to grow compared to 2015.
The list of victims of the short-term fury of professional speculation, the absolute protagonist of this phase of the market (despite the ban on MPS overdrafts), is long. Unicredit on the eve of the Board of Directors closed down by 7,1%: the market takes for granted an operation on capital of 6/8 billion. Other stocks also fell sharply: Ubi lost 7%, Banca Pop.Emilia -12%, Banco Popolare -18%, Mediobanca -8,2%.
GM AND FOD SLOW DOWN, MARCHIONNE CONSOLE WITH FERRARI
The car alarm came from the United States. Sales figures for July came in lower than forecast: General Motors lost 4% after announcing a 1,9% drop in registrations, analysts estimated -1%. At Ford, sales showed a decline of 3% against an expectation of -0,5%.
The skid has not spared Fiat Chrysler, which also recorded a modest (+0,3%) increase in sales on the US market. FCA's sales in Italy were also better than average. The stock closed in New York with a loss of 4,4% and in Milan 5,1%. Good for Ferrari (+2,52%), which communicated results for the first half of 2016 higher than expected. At the end of the year, sales will rise above 8 cars for the first time.
Sales did not spare BMW (-2,23%) which also announced a 10% increase in net profit, to 3,590 million in the first six months. Tesla's accounts arrive today, expected in deep red.
CAMPARI, THE ONLY COMFORT IN PIAZZA AFFARI
The only consolation for Piazza Affari was Campari, which achieved a rise of 4,6%, reaching a new all-time high, thanks to the good results of the second quarter closed with a profit that fell by 13,8% due to adjustments to operating costs and write-downs following the sale of the business. Profit rose by 9,4% to 77,3 million if net of one-off charges.
As regards the second half, the managing director Bob Kunze-Concewitz believes that the prospects outlined at the beginning of the year remain unchanged, due to the decline in the Brazilian market from which the company expects a double-digit drop in sales.
