Nasdaq falls, US bonds skyrocket. If Fed Chairman Jerome Powell's mission was to reassure markets about inflation risk, it can be said to have failed. But the reaction of the markets to the decision to guarantee low rates until 2024 is certainly not a surprise: at these levels it is better to invest in bonds than to try your luck on hi-tech stocks. But for the Fed, which is aware of this, it is more important to protect growth, at the risk of unleashing unwanted side effects. The week thus starts to turn red in the finale. The partial exception is Europe, which has closed the investigation into AstraZeneca, ruling that "the vaccine is safe and effective". Therefore the administration will resume already today. There are about 200 injections to recover, missed since Monday, the day of the stop. It will take at least a couple of weeks. For the political and psychological damage, who knows.
CHINA -2,5%, BOJ STOP ETF PURCHASE
The CSI 300 index of Shanghai and Shenzhen is down by 2,5%.
Hong Kong's Hang Seng is down 2%. Tokyo Nikkei -1,2% in the final session. The Bank of Japan said tonight, as part of a review of its monetary policy actions, that it will already give free rein to bonds, reduce purchases of equity ETFs on the Nikkei and focus on the Topix, the stock exchange's broad index. Tokyo.
BETWEEN CHINA AND THE USA, IT ENDS (ALMOST) BETTER
In addition to the effect of the Nasdaq drop, Asian markets are discounting the stormy outcome of the first meeting between Secretary of State Anthony Blinken and his Chinese counterpart Yang Jiechin. It turned out worse than expected. The US diplomat attacked Beijing over Hong Kong, Taiwan and the repression of the Uighurs. The reply was violent: “You have a Cold War mentality and you attack us almost everywhere. But they are only pretexts because you don't know how to deal with inequalities and racial injustice”. A fifteen-minute tirade to which Blinken wanted to reply by asking for the presence of journalists in the room.
BONDS SUMMER, NASDAQ LOSSES 3%
Yesterday's session in New York was dramatic. Last night the tech index lost 3%, this morning the future is at parity. The S&P500, which climbed to its all-time high on Wednesday, lost 1,5%. The Dow Jones resists (-0,46%).
No one was saved from the landslide of the Times Square price list: Apple and Amazon leave more than 3% in the field.
AMC HALLS, AMERICANS RETURN TO THE CINEMA
Amc's performance was positive (+4%). The most important cinema company reports that bookings have already reached 98% of available seats for the weekend. The pandemic effect has vanished.
At the root of the collapse is the jump in interest rates on ten-year T bonds, which jumped over 1,75%, to the highest in 14 months. Corporate bond yields are now close to 3%, an unsustainable competition for technology stocks, which have risen impressively during the pandemic, at a time of greater liquidity inflows from governments and central banks. Now that inflation makes it probable that the tap will turn off, the Nasdaq behaves as if it were a XNUMX-year bond.
OIL DOWN 7%
There was also a sharp fall in the price of oil, which dropped by 7% in a few hours. The WTI has dropped below 60 dollars a barrel, this morning we are at 59,9 dollars. Originally a drop in Chinese purchases but, above all, the increase in the cost of upward speculative operations.
EUROPE, THANKS TO THE CAR THE DAX TAKES THE PLACE OF THE NASDAQ
European markets yesterday replaced the Nasdaq with the German Dax index as the driving force behind the rise in share prices. First of all thanks to the car, yesterday in adjustment after the strong earnings: since the beginning of the year Volkswagen (which yesterday surpassed Sap for market value) is up 55%, Daimler +25%, BMW +22%. And the Financial Times he does not hesitate to compare the German CEO Herbert Dies to none other than Elon Musk, not excluding a forthcoming revenge of the Teutonic manager, who grew up in the shadow of the greats of Wolfsburg to the revolutionary genius of the richest man on the planet.
TLTRO, THE ECB GIVES OXYGEN TO THE SYSTEM
The ECB also thought about giving oxygen to the European banking sector, which, during the auction for ultra-subsidized loans for credit, disbursed 330,501 billion euros in the first operation with a three-year maturity under TLTRO III, to be when conditions were made even more advantageous. The allocated funds replace 233,5 billion due. 425 banks have joined today's operation. In the previous one, in December, the amount assigned was just over 50 billion, with the participation of 156 credit institutions. The EMA's decision on the AstraZeneca vaccine, considered "safe and effective", but arrived at the end of the session, appears to be irrelevant. The administration of vaccines in Italy will resume today, anticipated Prime Minister Mario Draghi.
MILAN +0,40%, THE BUOY DOES NOT TOUCH THE RATES
Piazza Affari rose by 0,40%, to 24.360, despite the start of the Nasdaq in the red and the sharp drop in oil prices. The other lists rose: Paris +0,13%; Amsterdam +0,25%; Madrid +0,32%.
London +0,24%. The Bank of England kept its interest rate unchanged at an all-time low of 0,1%. The central bank also kept the size of its bond-buying program unchanged at £895bn.
However, the race is led by Frankfurt: +1,33%, to a new high, extending the gains from January to +7,30%. In great evidence yesterday Deutsche Bank (+4%). Despite recent hikes, the P/E ratio, at 22x, remains among the lowest.
HOLDS THE 96 YEAR: SPREAD AT 0,69, YIELD AT XNUMX%
The BTP closes with falling rates after the Tltro operation, in contrast with the euro zone government bonds which have seen rising yields in the wake of the Treasuries.
The 10-year bond closes the session with a spread on the 96-year Bund at 99 points from 0,69 at the previous close. The reference rate stands at 0,72%, compared to 0,7% at the opening and XNUMX% yesterday at the end of the session. The German XNUMX-year rate hit its highest level in over a year in the wake of the rise in US rates.
STELLANTIS AND CNH ON THE SHIELD
The rise in the automotive industry also reached Piazza Affari today: the sector leads the index (+1,51%) ahead of the banks (+0,97%). At the head of the list shines Cnh Industrial (+3,75%), on which the pressure of possible Chinese buyers continues. Stellantis is also advancing (+2,98%).
GREEN LIGHT FOR DIVIDENDS LAUNCHES MEDIOLANUM
The go-ahead for the partial distribution of dividends by the ECB Supervision instead favors the asset management sector: Banca Mediolanum rises by 2,52%. In the credit sector, attention continues on Banca Bpm +0,90%. Well understood (+1,57%). Unicredit remains in evidence (+0,39%). Mediobanca +0,04%.
The positive tone was strengthened after yesterday the President of European Supervision, Andrea Enria, anticipated that the banks will be able to return to the ordinary dividend distribution policy by next autumn.
ENEL: LESS REVENUES, MORE PROFITS AND DIVIDENDS
Enel fell by 1,2% on the day of final results 2020circulated to closed markets. The turnover fell by almost 20% (64,9 billion against 83) but the net profit rose by 20% (2,61 billion profits) which allowed the company controlled by the Ministry of Economy (leading shareholder with 23,6% of the shares) to propose a dividend that is in turn up by 9% compared to a year ago.
Speaking by videoconference with market analysts, CEO Francesco Starace announced that "in line with the strategic plan and its decarbonisation and digitization objectives, we plan to accelerate investments in renewables, in improving the quality and resilience of grids, as well as in the electrification of consumption”.
Snam was weak (-0,24%), even if, according to Equita, it presented "better than estimated results both at an operating and net profit level".
BIDEN PUSHES BUZZI, THE GOVERNMENT'S DOUBTS ABOUT THE SINGLE NETWORK AT TIM
Buzzi also stood out (+1,49%), among the probable protagonists of the US recovery in the construction sector.
The good intonation of the European TLCs still helps Tim (+1,1%). Exane Bnp raises the rating to Neutral. "It is necessary that a solution be found as soon as possible on the so-called single network - i.e. the integration of Tim's fixed network with that of Open Fiber - which guarantees a rapid recovery of the cabling activities of the broadband fiber network" . The Minister of Technological Innovation, Vittorio Colao said this during a parliamentary hearing.
OIL COLLAPSES BUT ENI STILL CELEBRATES
Eni (+0,4%) advances despite the difficult day for oil. The six-legged dog continues to celebrate the acquittal of Eni's top management in the Milan court, including CEO Claudio Descalzi for the alleged bribes paid by the oil group and Shell in Nigeria. "The full acquittal sentence eliminates a source of risk that has hung over the stock for several years", writes Equita in the daily. According to the broker Bestinver, "the news is positive for Eni, but it has no significant impact on the stock because the market had always given little weight to the case". The group filed a request for a plea bargain in the investigation into the renewal of some mining licenses in the Congo with the Milan prosecutor's office after prosecutors reduced the hypothesis of a crime from international corruption to unlawful inducement.
DOWN NEXI, JP MORGAN CUTS DIASORIN.
The strongest decreases concern Nexi (-2,68%) and Amplifon (-1,72%). Followed by Diasorin (-1,3%). Morgan Stanley lowers the Underweight assessment, target price to 124 euros.
MEDIASET LAUNCHES AN OFFER FOR M6 IN FRANCE
The good performance of publishing titles should be noted. Mediaset +1,2%. Reuters writes that the Alfa Romeo has presented a preliminary offer for the stake held by Bertelsmann in the French TV M6.
Rcs appreciates by 2,82%, despite having closed 2020 with a net profit of 31,7 million, more than halved compared to 68,5 million in 2019 and an Ebitda of 83,1 million (from 153,3 million in year before).
AIM, FRESHMAN RATES RISE TO 139
In Aim Italia fireworks on Casasold (+18,92%), an innovative SME specializing in real estate services, making its debut today. Thus, the number of companies listed on the market dedicated to small and medium-sized enterprises rises to 139. This is the third admission of the year on the list.
