The unknown Korea remains standing but the markets, at least for now, do not believe in the nuclear risk. And so the Asian stock markets, in the wake of what happened on Wall Street on Friday, cautiously resume the upward path. Even South Korea, the frontier most exposed to threats from its northern neighbor (tomorrow is the celebration of the Liberation Day from the Japanese invasion) scores an increase of 0,6%, recovering part of the losses (-3,2 %) of last week. Same scenario in Shanghai +0,4% and Hong Kong +0,8%. The exception is Tokyo -1,1%, closed last Friday.
However, the geopolitical situation remains hot. The joint South Korea/USA military maneuvers will begin in a week, meanwhile Japanese Foreign Minister Taro Kono, accompanied by his Defense colleague Itsunori Onodera, is preparing to go to Washington. Adding to the tension is the news that the US intends to announce measures against Chinese imports during the day, appealing to alleged violations of intellectual property. Beijing has already anticipated that it will be able to respond (Apple and Wal-Mart in the sights).
BEIJING SLOWS DOWN, TOKYO'S ECONOMY MARKS +4%
To complete the picture there are signs of a slowdown in the Chinese economy. In July, industrial production rose by 6,4%, against the forecast of +7,2%. Investments also fell (+8,3% from January against a previous estimate of +8,6%). On the contrary, indications of a strong recovery arrive from Tokyo this morning: in the second quarter, thanks also to the boost of domestic consumption (+0,9%), the Japanese gross domestic product rose by 1%, a strong acceleration compared to the first three months of 2017 (0,3). The forecast for the increase for the entire year jumped to 4%, a clear acceleration compared to previous estimates (+1,5). The good performance of the Tokyo Stock Exchange contributed to pushing the economy upwards.
ITALY, FERRAGOSTO TEST ON THE RECOVERY
The good tone of the Asian markets, combined with the recovery of Wall Street on Friday, suggests a positive tone for the European session, however "subtle", in view of August XNUMXth. The only relevant macro data to come regards the industrial production of the Eurozone in the month of June.
Italy, which has already released the results (+5,3% compared to 12 months ago) is in any case under special observation. If the Istat data on GDP for the second quarter (expected for the 16th) were to confirm the forecasts of another increase of 0,4% quarterly (it would be the encore of the first quarter), Italy would in fact acquire an annual growth of 1,2%. But, given the recent data on industrial production and the positive confidence indicators, the Deputy Minister for the Economy, Enrico Morando, has spoken openly of the possibility of revising the GDP estimate to +1,3-1,4% for the entire 2017. The appropriate place to do this will be the update of the Def in September, when, among other things, the next budget law will have to be drafted.
The Italian recovery strengthens expectations of a possible, albeit gradual, change of course of the ECB, which is however grappling with the recovery of the euro (+6% against the dollar since the beginning of the year), a trend which has affected German exports. Hence the attention paid to the manufacturing trend across the Rhine. A sign of unease emerged from Angela Merkel's rally which (after a three-week holiday) on Saturday produced a harsh criticism of the auto, at the center of the investigations by the judiciary for the agreements in defense of diesel. A technology, said Merkel, which must be defended but not to the detriment of innovation.
FED, RATES RISE FURTHER
In the United States, the most awaited macro data of the week concerns the release, on Wednesday, of the minutes of the last meeting of the Fed. On that occasion, the board reiterated its intention to start cutting the bank's balance sheet (today at 4.500 billion dollars) “relatively soon”. Operators hope to find out a few more details from reading the minutes. Meanwhile, with regard to rates, the party of prudence is growing in the central bank: Neel Kashkari of the Minneapolis Fed (voting member) and James Bullard of Saint Louis reiterated that if inflation remains far from the 2% target, an increase it would be harmful. Among the data arriving this week, that of consumer sales in July stands out, expected to grow by 0,4% after the unexpected plunge in June (-0,2%). The latest statistics on the real estate market are also on the way.
THE ACCOUNTS OF ALIBABA AND WAL-MART COME TO THE FORE
US finance does not go on holiday on August 20th. On the corporate front, the appeal test is in sight for the “traditional” retail giants. The accounts for the quarter have already sanctioned a heavy defeat of Macy's and Kohl's, in sales crisis in the face of the irresistible advance of Amazon. The test on Home Depot and, above all, on Wal-Mart, the most important commercial operator on the planet, is scheduled for the week. An additional 500 S&P XNUMX companies will review accounts this week. Among these, John Deere and Cisco stand out. The accounts of the Chinese giants of the web, Alibaba and Tencent, and in Europe of the German Rwe and the Danish Carlsberg are also out.
PENDING AUCTION FOR AUTOGRILL
This morning, in a Piazza Affari depopulated due to the imminence of August 3,9th, attention to Autogrill, protagonist of a sudden rise of 14% on Friday. The cause of the leap lies in the news published by the American site Wall Street Wires according to which negotiations are underway to sell the company, or part of its assets, on the basis of a valuation of 35 euros per share, XNUMX% more than the listing current. The site mentions three interested groups:
1) The French Elior, active in catering and commercial catering with a turnover of 5,9 billion euros and a market capitalization of 3,9 billion.
2) The French Sodexo, a company that provides services of various kinds, including catering, with a total turnover of 20,5 billion and a capitalization of just under 15 billion.
3) The English company Compass, a catering and restaurant giant with a turnover of 21,5 billion pounds and a capitalization on the London Stock Exchange of 25,6 billion pounds.
KIM'S MISSILES BURNED THOUSAND BILLIONS
The Korean crisis has resulted in a total loss of approximately one trillion dollars globally. The Wall Street market held up best of all, closing the week down by 1,4%, thanks to the modest +0,1% recovery of the S&P index in Friday's session. The losses suffered last week by the European and Asian lists were heavier. The Milan Stock Exchange suffered an overall loss of 2,65% to 21.354 which reduces the gain from the beginning of the year to +11,2%, which in any case remains the best performance worldwide among developed countries. For the Paris Stock Exchange, the balance for the week is a drop of 2,7%, Frankfurt -2,2%, Madrid -3,4%.
In search of "safe havens", did the outgoing capital from the share capital go to government bonds? United States and Germany. The yield on the 10-year US Treasury Bill fell to 2,20%, from last Friday's 2,26%. The yield of the 10-year Bund fell in five sessions by 8 basis points to 0,38%, while that of the BTP remained substantially unchanged at 2,01%. As a result, the spread widened to 163 basis points.
