US equities closed lower for the fifth straight day, it's the longest down cycle in nearly a year for the Standard & Poor's 500. A session that started well ended in minus following a speech at a banking conference in Atlanta by Fed President Ben Bernanke, who made no mention of a new stimulus package for the US economy, while acknowledging that the recovery is rather bumpy. Bernanke's words caused the trend of the stocks to reverse, all of which closed slightly down, canceling the robust mid-session rebound. The idea that there won't be a new lightening maneuver in the autumn (the so-called Quantitative Easing 3), in the face of a weak cycle, worries the market.
In Europe, the lists have been more tonic, but there is no shortage of concerns, they do not refer to QE3 but to fears of a possible default in Athens. Concerns shared by President Barack Obama himself who, after a meeting in Washington with German Chancellor Angela Merkel, appealed to European countries to prevent a "disastrous" Greek default and assured US support to help resolve the debt crisis in Athens. Obama recognized the importance of the German leadership in managing the problem and stressed that a crisis in the eurozone could turn into a "headwind" capable of damaging the US economy. He is confident that Greece will return to growth, even if it will take time and patience to get out of the current shallows. In short, the general picture continues to worry and the Asian price lists are affected, all down in the middle of the session, even if with losses of a few decimal places. Only the yen was saved, at its highest in a month against the dollar, which is seen as a safe haven currency given the stomach aches on both sides of the Atlantic. The climate right now doesn't allow for much more.
The need for a substantial new aid package in Athens from the euro zone was admitted today by German Finance Minister Wolfgang Schaeuble in an article in the newspaper Die Welt. In his opinion, the risk of a country's first default within the eurozone is real. Schaeuble supports the need for a new rescue package with a "substantial" expansion of European aid and the involvement of private creditors and writes it in a letter also sent to the president of the European Central Bank, Jean-Claude Trichet.
According to the Bloomberg agency, any default would increase the risk of contagion, amplifying the Eurozone crisis, and in any case it would not be sustainable by European banks. According to estimates by the Bank for International Settlements (Bri), the overall exposure of European institutions amounts to just over 136 billion, four of which held by Italian banks, and this load would not be sustainable by a sector in precarious health conditions. The bulk of the package is in the hands of France and Germany. According to Goldman Sachs, six European banks are most involved: Bnp Paribas, the Belgian Dexia, and Commerzbank, Societé Geenerale, the Dutch Ing, and Deutsche Bank.
OPEC meeting today in Vienna, probable increase in crude oil supply
OPEC are meeting again today in a climate of great uncertainty. An increase in supply should be discussed in Vienna. Analysts agree in diagnosing an increase of at least one million barrels. The crux of the participation of individual countries in growth would remain given that the production of all member countries, with the exception of Libya, is greater than their respective quotas and only Saudi Arabia, Kuwait and the United Arab Emirates are able to increase production. Conversely, Iranian representative Muhammad Ali Khatibi is against it, according to whom the market is in balance, and Iran is the current president of Opec. Several manufacturers are concerned that price hikes may have helped trigger a slowdown in the global recovery. And a slowdown in growth would end up compromising oil demand. The situation in Libya has largely contributed to the increase in prices: the country's production dropped to 200 barrels compared to the 1,4 million it exported, creating a supply deficit that allowed prices to rise above $100.
Then there is the risk that the Libyan conflict will erupt at the top. Tripoli's cartel leader Shokri Ghanem has fled the country. The new representative of Libya could find himself next to a delegate of the rebels. Already last month, in fact, the interim administration had made it known that it wanted to send a delegation to the OPEC summit, and several Gulf countries said they were ready to collaborate with the rebels to allow them to commercialize crude oil. The OPEC delegates risk being faced with all the tensions of the North African country.
Banks, increasingly difficult capital increases?
It continues to rain on the Ubi Banca capital increase, yesterday on its second day. After falling 3,97% on Monday, the stock recorded another heavy fall of more than 3%. Down the rights that have lost 19,33%, remaining substantially in line with the value of the share. It is confirmed that capital increases these days often have a difficult start. Those who do not intend to subscribe tend to sell their rights in the early days when the price of the options is still almost certain and the prices of the securities align. The script has been followed with some regularity in recent weeks. But this would not be the only reason to make the path of recapitalizations problematic. The progressive erosion of the savings quotas held by Italian families would also contribute. Recourse to the market will not be as easy as in the past, so the lever of the increase must be maneuvered with extreme care. At least this is the opinion of a banker, the chairman of Carige, Giovanni Bedeschi. Banks about to ask the market for new liquidity are warned.
