Don't worry, the party can continue. This is what the markets think after the signals coming from the European Central Bank, more "dove" than the already optimistic forecasts. Share lists fly, spreads are reduced to the advantage of BTPs and other peripherals. The euro fell, from 1,18 to 1,163 against the dollar, to its lowest level since July, providing new oxygen to industrial stocks.
Yesterday evening, with the stock market closed, the brilliant results of Alphabet, Amazon and Microsoft, three giants with a total value of 1.700 billion dollars, and the rise in the price of oil contributed to an all-bull October finale. eve of the accounts of the Big oi, including Eni. In the midst of so much euphoria, also fueled by the progress of the US tax reform, the many reasons for geopolitical tension risk disappearing (Catalonia, North Korea, the Middle East) which could derail the convoy of the increase as well as one consideration: in 2018 the markets will in any case have less money available to support the purchase charge.
In 2017, according to Pictet, 2 trillion rained down on the markets from the five major central banks, an unprecedented figure. In 2018 there will be the first trend reversal, starting with the Fed, which will begin to partially drain maturing securities. In September, the ECB will join the chorus in view of 2019, the year of change, when Italy will lose its guardian angel in Frankfurt, Mario Draghi.
AMAZON IN THE STARS (+7%), MICROSOFT IN THE CLOUDS (+4,5%)
There are numerous ideas arriving from the markets, starting after the Wall Street Stock Exchange. Alphabet (formerly Google) climbed 3% in the after hours after announcing revenue growth of 24% to $27,77 billion on strong expansion in mobile advertising.
Amazon did even better, stable during the session and then jumping up by 7,6% after the results supported by the exceptional sales of Prime Day. In the meantime, the news of the authorization of some US states to sell medicines via Amazon caused the fall of healthcare stocks.
Even Microsoft largely beats forecasts thanks to the double-digit rise of cloud services. The shares of the software giant rose by 4,5% after the Stock Exchange, despite the worse-than-expected accounts of the subsidiary Nokia (-17%). The capitalization of Microsoft has exceeded the maximum returned in 1999 before the sentences imposed by the US Antitrust.
The golden day of tech was completed by the surge in Twitter (+20%) heading towards the first quarterly profit in its history.
ASIA RISES AGAIN, NIKKEI TO 1996 LEVEL
While awaiting the balance sheets, Wall Street experienced a mixed session. Both the Dow Jones +0,31% and the S&P 500 +0,13% closed in positive territory. The Nasdaq was down -0,11%, which was weighed down by the collapse of the biotech giant Celgene (-16,4%). The stress on the name of the Fed president continues. According to Politico, only Jerome Powell and John Taylor remain in the running but, it seems, Donald Trump still wants to buy time.
The rally in tech stocks on Wall Street buoyed Asian stocks this morning. The Nikkei index (+1%) scored yet another rise. Positive ground for all other markets: Hong Kong +0,8%, CSI 300 index of Shanghai and Shenzhen stock exchanges +0,4%, Seoul +0,5%, Mumbai +0,1%.
ARABIA PUSHES CRUDE. THE ENI ACCOUNTS ARE HERE
Oil is also prominent. This morning Brent prices are one step away from the barrier of 60 dollars (59,40) at the highs of the year. The WTI trades at 52,64 dollars on its highest since April. The rise is also conditioned by the pronouncement of Saudi Arabia which has declared itself in favor of re-establishing a balance in the world supply of crude oil. Saudi Prince Mohammed bin Salman said this in an interview with Bloomberg.
While waiting for the publication of Eni's data (yesterday +0,87% to 13,92 euros) Tenaris shone +1,45% which benefited from the investment plan of the Argentine state oil company Ypf.
BUSINESS PLACE: +18,5% SINCE THE BEGINNING OF THE YEAR. HIGH VOLTAGE MADRID
Bags fly on the wings of the Draghi dove. The soft reduction of Quantitative Easing is well accepted by the price lists of the Old Continent, which feared little devils hidden in the details. Qe will last until December in its current form (60 billion a month) and then continue until September at a rate of 30 billion a month.
Milan was the most effervescent square in Europe. The Ftse Mib index, which accelerated strongly in the afternoon, closed at 22,807 with an increase of 1,61%, close to the highs of the year (22.850 points). The Italian index is therefore confirmed as the best since the beginning of the year with an increase of around +18,5%.
Paris (+1,50%) and Frankfurt (+1,39%) also made a big splash. Separate discussion for Madrid (+1,9%). The Stock Exchange ignites when a compromise looms: no declaration of independence, early elections. But in the evening the parties stiffen again. A muy caliente day looms.
Spain's economy will grow by just over 3% this year, despite calls for independence from wealthy Catalonia. This was stated by Economy Minister Luis de Guindos. Lists outside the Eurozone also rose: Zurich +1,25%, London only +0,53%.
BTP BELOW 2%, SPREAD TO 151. BOT AUCTION TODAY
The bond market rallied after the European Central Bank's verdict on quantitative easing. The Italian 1,944-year rate, after falling to 1,974%, its lowest since the beginning of September, settled at 2,033% from 151% at the end of yesterday's session. The spread with the similar maturity of the Bund narrowed to 2016 basis points, the lowest since mid-December 154, to then close at 156 basis points from XNUMX basis points on the eve.
The ECB, directly and through the Bank of Italy, currently buys around 9 billion euros a month of Italian public securities. From January, purchases will continue at a substantially halved pace for at least another 9 months.
According to estimates by UniCredit strategist Luca Cazzulani, the extension of ECB purchases in 2018 will cover 70-80% of net issues of Italian government bonds next year, when - for the first time after three years - the balance between maturities and new offer, considering the purchases made by the ECB, will return positive, for around 20 billion.
On the primary front, the round of month-end auctions, which began with the placement of 3 billion of the new Ctz in October 2019 and 1,25 billion of the Btpei in May 2028, will continue today with the offer of semi-annual BOTs, offered for an amount of 6 billion, compared to 6,6 billion euro of maturing securities.
At the end of the session, on the Mts gray market, the April 2018 Bot was discounting a yield of -0,364%, up from the all-time low of -0,382% recorded at the end of September.
STM SUPERSTAR (+12%) BEATS ESTIMATES
The leading stock of the day was Stm (+12%) which returns to its early millennium splendor at 19,84, the price it reached in 2004. The Italian-French semiconductor joint venture, since 18 September re-entered the Cac 40, the basket of the blue chips, has released data that exceed the already flattering forecasts. Net income was $326 million, a sharp improvement from $71 million a year earlier. Gross margin climbs to 39,5%, well within the company's target range. 2017 should close with an 18% year-on-year increase in revenues, with a substantial improvement in profitability. Both quarterly figures and forecasts are above analysts' estimates.
DRAGHI SHOCKS ENEL
The utility sector was in great evidence (+1,7% the Eurostoxx index for the sector) in the wake of the decisions of the ECB, which ward off the risk of a rise in interest rates. Enel accelerates in a conspicuous rise reaching the new highs since 2009 at 5,285 euros. In the first nine months of 2017, the Enel group's net electricity generation amounted to 184,471 GWh, down 5% year-on-year. This was reported in the report on the group's operating data published in advance of the approval of the economic-financial results by the board of directors. Italgas +2,2%.
BANKS, THE MPS RALLY CONTINUES
Conversely, for the same reason, the banks contrasted: the Italian index advanced by 0,4%, in line with the European sector. Unicredit +0,1%, Intesa Sanpaolo +1%, Banco Bpm -0,5%. However, the MPS rally continued: +3,91% to 4.728 euros. Mediobanca Securities has resumed hedging today with “neutral” and a target of 5 euros.
Also on the rise were Fineco Bank (+2,8%) and Banca Mediolanum (+2%). Among thin stocks, Banca Intermobiliare rebounds +17% after the catastrophic drop on the eve (-41,7%). However, the stock remains far from the price of the tender offer launched by Attestor Capital.
FCA AWARDED BY GOLDMAN SACHS AND MORGAN STANLEY
Fiat Chrysler rose about 3% on reports from some investment banks commenting on the quarter's results. Morgan Stanley raised the target price to 16 euros from the previous 15 euros, confirming the Overweight rating. Goldman Sachs has revised its target price to 25,5 euros from 25,3 euros. Judgment Buy confirmed. Both companies expect strong cash generation in the future, thanks to the good performance of the NAFTA area and underline how some assets, in particular Magneti, Jeep and Maserati, are undervalued.
LUXURY STOP, CAMPARI RECORD
In luxury, Moncler falls (-1,4%). The Eurazeo fund, a shareholder of the group, announced this morning that it had sold 8,5 million shares, equal to 3,34% of the capital, at 24,48 euros per share, maintaining 5,3%.
Ferragamo recovered in the final -0,18%, which was affected today by a downgrade to "underperform" by an Italian broker on expectations of a weak quarterly, after a similar comment by JP Morgan yesterday. Luxottica +1%.
Campari reaches new all-time highs: +3%.
RECORD, ADVANCE COUPON. FILA GIVES COLOR TO THE PIRs
Recordati closed the first nine months of 2017 with a net profit up by 20,6% to 219,8 million, against a turnover of 963,8 million (+11,8%). The pharmaceutical group has announced that it has approved an interim dividend of 0,42 euro which compares with that of 0,35 euro on 2016. The interim dividend will be paid starting from 22 November with detachment on 20.
Banca Ifis +1,5% to 48,20 euro consolidates the increases (+87% since the beginning of the year). The institute, which specializes in factoring and Npl management, presented a preview in Milan of the TiAnticipo web platform for the financing of certified credits dedicated to companies that work with the Public Administration and which will be officially online from 31 October.
Fila (+1,4%) closed well at €18,85. From the beginning of the year +40%. The leading company in the color sector has been included among the PIR stocks with the greatest potential according to Mediobanca. The company is included in both the list of short-term opportunities and the list of best stocks in the medium to long term. The judgment of Mediobanca analysts is Outperform, with a target price of 22,5 euros, which means a potential upside of over 20%.
