The second wave has arrived. No, it is not a new resurrection of the pandemic, but, much less dangerous (but not too much), a new wave of strongly growing bond yields. Faced with the surge in yields that reached 1,50% (1,47% on a ten-year basis) the US market is divided: the most optimistic consider it a virtuous phenomenon, i.e. the confirmation that the world is on its way to recovery after the pandemic. Others evoke the risk of inflation, the evil genius which, once it comes out of the bottle, will jeopardize the equilibrium of the markets. Judging by the response of the markets, the latter are the most numerous.
THE NASDAQ BIG SUFFER
The fall of the Nasdaq (-2,7%) stopped last night only below 13 points (12.997), but the erosion resumed this morning with the future down by another 1%. The big names, the most vulnerable to the increase in financing costs, lose their shots: Apple, Amazon and Microsoft leave more than 2% on the ground.
HOLDS WALL STREET THANKS TO THE BANKS
The financial sector is much more resilient. For the banks, the much steeper real rate curve is oxygen, in fact it was they who allowed the Dow Jones to contain the loss of the Dow Jones (-0,3%). The S&P index falls by 1,31%. "The market trend - reads a report by Baird investment - represents the perfect snapshot of the situation in recent months: the vaccination campaign is going well and this is reflected in the expectation of a rate hike that is damaging the stock" .
IN VIEW OF A COMPROMISE ON AID
Meanwhile, a compromise solution on fiscal stimuli is looming. An amendment is arriving in the Senate that limits direct aid to taxpayers ($1.400) only to taxpayers with incomes under $80 or $60 per household.
However, a “modest recovery from January to mid-February” 2021 emerges from the Beige Book, even if most companies “remain optimistic for the next 6-12 months, when vaccines will be distributed optimally.
Tensions on the interest rate front are however putting a strain on a fragile system, after the rain of liquidity.
A danger signal comes from Australia. A large conglomerate, Greensil Capital, is in danger of pulling away a large portion of the clients it had funded.
The yield on Australia's 1,76-year bond rose ten basis points to XNUMX%.
ASIA IN DEEP RED, THE COLD SUPPORTS THE ILO
Even more violent was the reaction of the equity markets in the East. The Nikkei of Tokyo loses 2,8%, the CSI 300 of the exchanges of Shanghai and Shenzen 2,7%, the lowest since the beginning of the year. The China Next of Chinese small companies is down 4,5%. Hong Kong Hang Seng -2,5%.
Bitcoin is back close to $50.000, this morning it is at $49.500. Brent oil gains 0,5% to 64,5 dollars a barrel, from +2% yesterday, pending the outcome of talks between OPEC+ members today. US crude stockpiles amid Texas freezes that shut down refineries posted a record increase, but gasoline and distillate stockpiles also fell.
BOND IN FLIGHT ALSO IN EUROPE, WEIDMAN AGAINST NEW ACQUIRES
In Europe, the war on the pandemic is far from decided. But on the markets, the yields of the bond market go up again just the same. The BTP rose to 0,75% (+5 basis points), the Bund also rose to -0,3% (from -0,33%) in line with the overseas markets. According to Bloomberg, however, at least some ECB executives believe there is no need to intervene to stop the rise in bond yields. The risk of increased volatility exists, Bundesbank governor Jens Weidman said, but it is manageable without new ECB purchases. Even for Goldman Sachs you can rest assured.
RAIN OF BOOKINGS ON THE GREEN BTP
But the most important note of the financial day regarding the placement of the first Green Bond of the Eurozone met with a strong, albeit predictable, success. The first Btp Green, expiring in April 2045, has collected bookings for 76 billion euros, about ten times the offer (8.5 billion). The yield was set at 12 basis points on the March 2041 BTP, coupon 1,80%, after initial indications that indicated 15 basis points.
The operation, via syndicate, was reserved for institutional investors. The retail will be able to intervene later on the secondary market or indirectly by buying specialized instruments that subscribe to the green BTP at the time of placement. For the debut, the Treasury was assisted by a consortium of banks made up of BNP Paribas, Crédit Agricole, Intesa Sanpaolo, JP Morgan and NatWest Market.
BUT THE SPREAD RISES TO 104, THE BTP 10 RETURNS 0.75%
On the secondary side, the gap between BTP and Bund rates on the 10-year segment widened to 104 basis points from 102 at the start and 103 at the end yesterday. The ten-year rate rises to 0,75% from 0,67% at the start and 0,68% at the previous closing.
LONDON +0,88%: FIRST YOU SPEND THEN YOU CUT. SUNAK LIKE DRAGONS
London rose 0,88% on the day of British Finance Minister Rishi Sunak's speech on the new budget. The plan includes a five-month extension of a massive £344bn jobs rescue package, to guide the economy through what the minister hopes will be the last few months of Covid restrictions. The watchword is: spend now, tax later. Quoting the words of former ECB president Mario Draghi, "at any cost", the English finance minister, Rishi Sunak, illustrated to Parliament the package of measures to stem the debt generated by the pandemic. The government has announced, from 2023, an increase in taxes on the profits of large companies from 19% to 25%. This is the most impressive tax increase in the history of the United Kingdom, which should bring about 17 billion a year to the state coffers.
WEAK MILAN. THE STABILITY PACT SUSPENDED FOR 2022
The European Commission has recommended maintaining the suspension of the Stability Pact also in 2022. Piazza Affari closes slightly down and loses 0,16%, falling to 23.046 points.
Frankfurt +0,28%. At the start of the session, the Dax index set a new all-time high of 14.197 points, before slowing down with all the other stock exchanges on the old continent. The German Stock Exchange records a gain of 2,40% since the beginning of the year, slightly below the euro zone average: Covestro (chemicals) is the best blue chip with a +23%, followed by Volkswagen (+21%) and Daimler (+ 20%).
Paris +0,35%. Renault leads the race (+5,21%) supported by the buy of Ubs. In fractional decrease Madrid (-0,3%). Flat Amsterdam.
THE UNICREDIT TEAM AT THE START, CALTAGIRONE IN MEDIOBANCA
Unicredit (+2,52%) stands out among the stocks in evidence. The institution's board yesterday approved the list of members of the future board which will have to lead the bank from mid-April. The list of names foresees as president Pier Carlo Padoan, the CEO will be, as expected, Andrea Orcel. But the prospect of Cnp Assurance acquiring 51% of the joint venture in the life business currently held by Aviva together with Unicredit is pushing the shares upwards. The value of the operation is around 385 million euros.
The rest of the sector was also highlighted: Intesa Sanpaolo +2,25%, Banco Bpm +1,89%. Mediobanca +1,43% after the announcement of theentry into 1,014% of the share capital of Francesco Caltagirone.
STELLANTIS +0,22%, ONE BILLION TO SHAREHOLDERS
“The results demonstrate the financial solidity of Stellantis, which was born from the union of two healthy and strong Groups”. Thus Carlos Tavares at the presentation of the accounts of Stellantis (+0,22%). For the last time FCA and Peugeot present separate accounts. The French company closes with a profitability of 7,1%, despite the drop in sales. Fiat Chrysler managed to close with a modest profit. The industrial margin of the group will fluctuate between 5,5% and 7,5%. As envisaged in the merger agreement, all shareholders will receive a dividend of 0,32 euro per ordinary share, around one billion euro in all.
THE ELECTRIC TRACTOR PUSHES CNH INDUSTRIAL
Among the best performances of the day, that of Cnh Industrial stands out, which closed the session with an increase of 0,97% to 12,485 euros, after the stock ended up under the scrutiny of analysts. Equita sim confirmed the buy rating and target price of 15 euros, following the purchase of a minority stake in Monarch Tractor, a US company that in 2020 presented the first tractor integrated on a single platform, fully electric, equipped with autonomous and with state-of-the-art data management (with power below 100 hp).
AMPLIFON COLLAPSES, SALES ON NEXI
Among the industrials significant purchases also on Buzzi (+2,3%) and Eni (+1,77%): both are directly or indirectly affected by the increase in oil prices.
However, most of the titles travel in negative territory. The worst performance is that of Amplifon (-8,35%), which closed 2020 with a net profit of 101 million, down compared to 127,1 in 2019. Nexi was also bad (-2,88%) after today the shareholders' meeting gave the definitive go-ahead for the merger with the Nets.
Lastly, sales on energy and utility stocks: A2a -2,53%, Enel -2,26%, Snam -2,07%, Hera -2,09% and Terna -1,77%.
DEBUT IN RED FOR PHILOGEN (BIOTECH), VOLA RETI (+15,8%)
Focus on Philogen, an Italian-Swiss company active in the biotechnology sector, specialized in the research and development of pharmaceutical products for the treatment of diseases with a high lethality rate, which scored -1,82% on the day of its debut in Piazza Affari.
On the Aim, in the Reti rally, +15,78% to 1 euro after Integrae Sim raised the target price of the stock from 1,95 to 2,55 euro, confirming the buy recommendation.
