A red weekend is looming for the Bull, under the roar of the bombs from Kiev and surroundings, even if the extreme volatility of these days advises us to be cautious with forecasts. In addition to the failure of the negotiations in Turkey, what extinguished hopes in a turning point was the much more "hawkish" attitude of the ECB than expected and yet another increase inAmerican inflation, now just a whisker away from 8%. The rate hike, to be announced by the Fed next Thursday, threatens to be higher than the 0,25% already priced in by Wall Street. Meanwhile, Goldman Sachs has also severed its remaining ties with Moscow. Even from China there are growing signs of nervousness about a situation that threatens not only financial damage. Against this backdrop, the stock exchanges are about to experience a third weekend of fear.
Asia Pacific stocks are down and Wall Street futures are down slightly, the dollar strengthens and bond yields rise. The rush of raw materials calms down, with oil slightly up after the decline of the last two days.
The Hang Seng of Hong Kong loses 2% and Hang Seng Tech 5%. The collapse, already anticipated yesterday on Wall Street, follows the publication by the US Securities and Exchange Commission (SEC) of a preliminary list of five Chinese companies called to adapt their internal accounting to the model prescribed by the supervisory authority. In the event of non-compliance, the delisting will proceed. At these prices, the Hang Seng ended the week down 8%. JD.Com, a sort of Chinese Amazon, is the worst stock with -13%.
The CSI 300 of the price lists Shanghai e Shenzen it loses 0,7%: the weekly budget expands to -5,2%. Nikkei of Tokyo -2% (-3% per week). Tiaex of Taipei -1% (-2,7%). The Mumbai BSE Sensex index, down slightly at the start of the session, would close the week on these levels with a 1,7% increase. The Kospi of Alone loses 0,7%, flat balance sheet in presidential election week.
Negative closing yesterday of the US lists: Dow Jones -0,34% S & P 500 -0,43%. The Nasdaq yields 0,95%. Nasdaq futures are down 0,5%. Goldman Sachs has cut its US 2022 GDP forecast to +1,7%, from +2%. The team led by economist Jan Hatzius warns that the chances of a recession in 2023 are close to 30%.
The 1,97-Year Treasury Note is yielding 2% from a four-week high of 40%, hit yesterday following US inflation data at a XNUMX-year high. Gold down 0,7% to $1.983. The Petroleum WTI trades at 106 dollars a barrel, with little movement.
This morning the euro recovers to 1,10 on the dollar. No indications on the subject of Eurobonds arrived from the Versailles summit, another cold shower after the outcome of the meeting of the European Central Bank.
The ECB, surprisingly, adopts the hawkish line
An ECB more “hawkish” than expected yesterday it helped to extinguish the hopes of the price lists in a new wave to oppose the slowdown of the economy. The ECB leaves the rates on the main refinancing operations, the marginal lending facility and the deposits unchanged at 0,00%, 0,25% and -0,50% respectively. But Christine Lagarde stressed that Moscow's invasion of Ukraine represents a "watershed for Europe", which cannot afford to let its guard down. Therefore Frankfurt extends the purchases of securities by a quarter, but is preparing to archive all extraordinary support programs starting in July.
And so monthly net purchases under the APP will amount to €40 billion in April, €30 billion in May and €20 billion in June. “The calibration of net purchases for the third quarter will be data dependent and reflect your evolving assessment of the outlook. At the end of the month, meanwhile, the net purchases of Pepp will close but the reinvestment program still in the Pepp area will continue at least until the end of 2024. A compromise solution reached thanks to the chief economist Philip Lane among those who asked for a push to counter the slowdown in the economy (GDP slowing down to 3,7, inflation towards 5,1%) and the fear that inflation could wipe out real growth.
The BTP collapses, the spread jumps to 164
The market reaction was immediate. The euro appreciates and sales on bonds are triggered. But in the evening the single currency returned to decline: the markets do not believe that the Frankfurt therapy can hold up.
The ten-year BTP collapses, the yield jumps to 1,90%, +22 basis points. The Bund moves to 0,27%, +6 basis points. The spread rises by about twenty points to 165 points. “The collateral damage is already evident in the widening of peripheral government bond spreads,” sums up Janus Henderson's Oliver Blackburn.
Piazza Affari is in the dark in Europe, with financial stocks leaving a large part of yesterday's gains on the field. The Ftse Mib loses 4,2% and slips below 23 points (22.886). The other European markets were also bad: Madrid -1,16%, London -1,22%, Amsterdam -2,39%, Frankfurt -2,92% and Paris -2,83%.
EU: free from Russian gas in 2027. Moscow raises tariffs on grain
By May, promises Ursula Von der Leyen, the European Union wants to finalize a plan to make the Community independent of Russian energy.
Carlsberg drops 5,5%; the Danish brewery put its forecasts on hold due to the uncertainties related to the large Russian market.
Russia in response to Western sanctions has ordered the embargo on Russian grain until August 31st.
Labriola makes Tim run, again on Leonardo and Tenaris
In a day of heavy losses, among the very few stocks bucking the trend, Tim stands out (+3,3%, ao.2755 euros), after the meeting of CEO Pietro Labriola with the company's management. The stock experienced a day marked by volatility: at 0,2755 euro, after fluctuating between a low of 0,2567 euro and a high of 0,2857 euro. After Vivendi's decision to devalue its stake, we are once again talking about KKR's offer at 0,5 euro.
Leonardo is also advancing (+1,5%), thanks to his exposure to the defense sector. Tenaris (+1,6%) was supported by the increase in the price of crude oil.
JP Morgan promotes Eni, holds back Italgas
Eni sold 3,66%, at 13,104 euros, in Piazza Affari, but JP Morgan raised the target price on the stock from 19 to 19,5 euros. Analysts raised their EPS (earnings per share) estimates for next year by 31,9%. In a report on the European oil and gas sector, experts increased target prices by an average of 25%,
Italgas loses 2,13% after the 2021 results. For Equita these are "results in line with estimates, while no guidance has been provided for investments in 2022"
Leading stocks of the day before, banking in the lead, fell sharply. The decline in financials is led by managed savings: Azimut -11,04% after the results. Intesa is back down (-7,61%), a hair ahead of Bper and Unicredit.
Stellantis and Iveco push Exor into the red
Massive losses for the Exor stable (-5,44%): Stellantis retreats (-7,23%) which left the Russian market yesterday. Worse than Iveco (-7,63%). In the automotive sector, Pirelli -2,2%.
Gas Plus continues to rise (+2,1%) again on expectations of a recovery in investments in gas extraction in Italy.
The Italian Sea Group also did well (+3,68%). Putin's yacht is not anchored, as has been written, in the shipyards of the group, which, according to a note, boasts only 6 million credits (expiring in 2023) with Russian customers, which however do not include oligarchs punished by sanctions .
