“China, instead of remedying its shortcomings, has decided to harm our businesses and our farmers. Therefore we will increase our tariffs by another 100 billion”. With these words, Donald Trump froze the enthusiasm of the markets returning from a euphoric session, in the belief of an agreement on trade.
The reaction was immediate: futures on the Dow Jones lost 1,4%, that on the S&P 500 index 1,7%. Yesterday evening, precisely the expectations of a settlement of the trade disputes between China and the United States, had favored the rise of Wall Street. Dow Jones +1%. S&P500 +0,7%.
ASIA HOLDS DOWN, BUT SHANGHAI IS CLOSED
The new tensions cooled Asian stock markets this morning, which recorded declines of less than 1%. Tokyo -0,1%. The amount of Japanese shares held by the Central Bank exceeded the stock of securities purchased by international operators.
Kospi of Seoul down 0,5%. BSE Sensex Mumbai i-0,1. The Shanghai and Taipei Stock Exchanges are closed. Hong Kong has reopened and rises by 1%, but it is a simple recovery of the gains achieved yesterday by the other Asian stock exchanges.
Safe-haven assets rose, such as the yen, strengthening against the dollar to 107,3 after three straight days of decline. The euro-dollar cross moves little, at 1,223.
Direct reversal also for oil. Brent crude is down 0,5% to $68 a barrel this morning, from +0,5% at close tonight.
In anticipation of the next earnings campaign and Mark Zuckerberg's congressional hearing on Tuesday, Wall Street's attention will be focused today on the US employment data. The consensus expects 193.000 new jobs in March, up from 313.000 in February.
New jobless claims rose more than expected; last week they saw an increase of about 30.000 units to 242.000. The US trade deficit widened more than expected.
BRAZIL AT THE TOP, TODAY LULA RISKS PRISON
The Brazilian Stock Exchange (Bovespa +1,6%) also closed higher, returning with this gain, close to all-time highs. But the currency, the real, weakened against the dollar overnight, to 3,34, on news of the arrest warrant delivered to former president Lula da Silva. Judge Sergio Moro has granted Lula one day to present himself at the prison where he will have to serve 12 years in prison. Lula barricaded himself in the headquarters of the metalworkers' union. The ultimatum expires at 17pm today. Moro ordered the police not to handcuff Lula. The real dollar cross is at its lowest since June 2017.
EUROSTOXX, THE BEST SEAT SINCE MACRON'S VICTORY
European futures are also holding back this morning after Trump's latest lunge. An initial correction is looming after yesterday's memorable session for European stock exchanges. For the Eurostoxx it was the best share session since the day of Macron's election.
- Piazza Affari, thanks to a leap of 2,35%, has returned to almost 23 thousand (Ftse Mib index at 22.970 points) to the levels of two months ago.
- Leading the charge was Frankfurt +2,9%, the market most affected by the fear of a trade clash.
- The rise was unanimous: Paris +2,62%, Madrid +2,34, London +2,35%.
PMI INDEXES DOWN, BUT STILL STRONG
The euphoria was not hindered by the new, modest signs of a slowdown in the economic situation in the Eurozone, Economic activity in the euro area ended the first quarter with the most modest expansion since the beginning of 2017, conditioned by inclement weather and a strong euro. However, growth remains solid and widespread, with production increasing in every country, but signs of a slowdown are also present throughout the region, including the four largest economies of the bloc. The final PMI by IHS Markit composite, which combines services and manufacturing, fell to 55,2 in March from 57,1 in February. It's the sharpest monthly drop in nearly six years, though it remains solidly above the 50 points that separate contraction from growth.
BTP IN RALLY, TODAY THE NUMBERS OF THE BOT AUCTION
- The return of the propensity for risk, together with the rich offer on the primary market (over 12 billion) of French and Spanish paper penalized the European bond.
- At the start, before the selling took over, the Btp/Bund spread fell to 122 basis points, the lowest since September 2016, before closing at 125,50.
- The Italian ten-year rate fell to 1,73%, on the levels of mid-December last year, rising to 1,78% at the end.
- The yield spread between ten-year BTPs and Bonos has narrowed by 2 basis points to 57, the lowest since March 2, the last session before the Italian elections.
- Tonight, with the markets closed, the Treasury communicates the details of the annual Bot auction on Wednesday 11, the first appointment of the mid-April session. Unicredit foresees an offer of 6 billion euros, similar to the amount of the bonds due to expire.
THE CASHIER IN THE FIELD ON TELECOM, THE STOCK FLYING
Two thoroughbred horses and a joker enlivened the Piazza Affari rally:
At the center of attention throughout the day on Thursday Telecom Italy +5,22 to 0,80 euros (+5,92% savings). In the evening, Cassa Depositi e Prestiti confirmed the already anticipated news: CDP will acquire a stake of up to 5% in the former telecommunications monopolist. The operation "is part of the institutional mission to support national strategic infrastructures... and is consistent with the sustainability criteria of all the Cassa's initiatives". A large part of the political world is in favour: Stefano Buffagni, Movimento 5 Stelle, notes that "It is essential to take back our technological and telecommunications infrastructure from foreign hands”.
In figures, the investment, made in blocks, will involve an outlay of around 550 million and will allow CDP to support the list of directors presented by the Elliott fund at the meeting on April 24, which will have the support of a substantial part of the funds. But not all, given the opposition of Unicredit and Generali (both headed by French managers), and the role of Goldman Sachs, plan consultant to Amos Genish. In the evening, Vivendi, a 23% shareholder, presented its list: Genish, de Puyfontaine and Franco Bernabé were confirmed as deputy with responsibility for safety. Also present were the "independents" who resigned at Vivendi's request, eliminating the board.
Mediaset +1%. Ubs raises recommendation to Buy.
THE MAGNETI SPIN OFF LAUNCHES FCA INTO ORBIT
Also Fiat Chrysler + 4,85% to 18,47 euros set the price list ablaze with the announcement of the spin-off of Magneti Marelli activities from the parent company. The company's shares will be distributed pro rata among FCA shareholders without any placement according to the scheme adopted in 2010 on the occasion of the separation between Fiat Auto and Industrial (later merged into CNH). The company will be listed between December and next January on the Milan Stock Exchange.
The news dragged upwards Exor + 4%. Strong rebound for too Cnh +4,2% weighed down on the eve of Chinese duties on American agricultural imports.
MPS, THIRD DAY OF COLLECTION
The joker on the list was Monte Paschi Bank +8,73 to 2,78 euros. The beneficial effect of CEO Marco Morelli's mission to London continues. The tone of the manager was liked and his indications were considered credible: the bank does not foresee capital increases or greater requests from the ECB. He proceeds with the plan to reduce suffering.
The rest of the sector is brilliant: Unicredit + 2,3%. Where's Banca + 2,7%. B for Bank + 3,5% Bpm bank + 4,4%.
CAIO & CAO, A NEW COUPLE FOR SAIPEM
The council of the CDP did not limit itself to giving the go-ahead for entry into Telecom Italia. In the evening it was communicated that Eni and CDP Equity will propose to the Saipem meeting of May 3, 2018, the appointment of Francesco Caio to the presidency and the confirmation of Stefano Cao as managing director as "in possession of the professional skills".
Live the oilmen: Eni + 2,2% Tenaris + 4,8% Saipem + 2,5 %
RECOVER STM, ATLANTIA'S OPTION ON ALL ABERTIS
Featured in the main basket:
- They recover stm +2,8% and Buzzi Unicem + 4,3%.
- The utilities are positive: Italgas + 2,3%. Atlantia +3%. The newspaper El Confidential revealed that theThe partnership for the joint control of Abertis through a newco in which Atlantia, Acs and Hochtief are all shareholders will expire in 2028. For IMI, the agreement provides for put and call options, allowing one of the parties to exercise the pre-emption right which could be in the hands of Atlantia.
