“Is China still winning?” headlines this morningEconomist, comparing the problems of the Asian giant with those of the USA, where yesterday the army of the unemployed increased by another 5,2 million people, for a total of 22 million on subsidies in three months. But it is a challenge between boxers on the ropes: China's GDP collapsed in the first quarter by 6,8%, the first negative figure since 1992, worse than forecasts. And faced with the numbers of the two dear enemies and those of Europe that are no less disturbing, the markets concentrate on the second round, or rather on the timing of the recovery already in sight according to Donald Trump's roadmap, which could have an ace in the sleeve.
GILEAD +16%: HOPE FOR THE VACCINE
In the Chicago University hospital, reports a respected scientific journal, scores of seriously ill patients treated with Gilead Sciences' experimental drug remdesivir improved or recovered. Only at the end of the month, warns the company, will it be possible to have reliable data, but Wall Street has moved forward: in theafter hours Gilead is up 16%. In short, hopes prevail over the strict law of numbers.
The record contraction of the Chinese economy in the first three months of 2020 does not upset investors too much: Tokyo's Nikkei is up 2,4%. Prime Minister Shinzo Abe has approved the distribution of the equivalent of 930 dollars for each citizen.
Hong Kong's Hang Seng recovered (+2,4%), supported by the recovery of shipping. The Shanghai Composite (+0,9%) is also in positive territory, even if China is worried by the Japanese decision to repatriate many activities that have already been relocated.
The Kospi of Seoul did well, up by 3%. The Mumbai Stock Exchange opened up 3,3%.
IN RALLY COPPER, OIL RISES
Many raw materials are rallying: on the Shanghai market, copper is up 1,7%, to 5.213 dollars a ton. It's the best week in nearly a year, up 4%.
Gold is down 0,7% to $1.706. The 0,67-year Treasury Note weakens to 4% yield, up XNUMX basis points.
Brent oil is trading at 28,2 dollars a barrel, up 1,5%, closing +0,3% yesterday. Saudi Arabia and Russia released a joint note tonight in which they say they are ready for further action.
AMAZON AND NETFLIX RECORD, FUTURES FLY EVEN IN EUROPE
The recovery of the markets started yesterday evening in the last stages of a Wall Street session that had been mixed up to that moment. The trend changed when the White House presented the draft plan for the restart of activities.
The Dow Jones index rose 0,14% at the close, the S&P 500 +0,57%. The recovery of the Nasdaq (+1,66%) was more robust. Driving the rally were the historic records of two heavyweights: Amazon and Netflix.
Futures anticipate a strong upward start both for the US stock exchanges (+3,3%) and for the Eurostoxx50 (+3,5%).
MACRON PLAYS THE CHARGE FOR THE EUROGROUP
"It's time to think about the unthinkable." This is the title of the interview that French President Emmanuel Macron gave to the Financial Times to support the reconstruction plan that France will present to the Eurogroup on the 23rd. President Emmanuel Macron maintains that the "time has come" for Europe of truth”: if convincing decisions are not taken, the anti-EU forces will prevail in Southern Europe and, perhaps, also in France. The plan provides for a budget of one trillion euros and a duration of 20 years. It would be financed by issuing bonds with the guarantee, pro-rata on the GDP, of the member states, and would operate over a period of 5 years.
AND LAGARDE ARRANGES THE MEANS OF THE ECB
Christine Lagarde also took the field. The president of the ECB, speaking at the spring session of the IMF and the World Bank, reiterated that "the governing council is committed to doing everything necessary within the scope of its mandate to help the eurozone overcome this crisis". A note from the ECB confirmed that Frankfurt is "ready to increase the asset purchase program and to review the composition of purchases according to needs" to bring relief to the economies hit by the pandemic.
THE MARKET RESPONSE WAS WEAK: MILAN +0,29%
The attempt to recover the markets, however, essentially failed. Milan closed with a timid rise (+0,29%), which does not compensate for the bad slide on the eve.
Frankfurt (+0,16%) and Paris (-0,06%%); weak Madrid (-1,1%). Better London (+0,55%) and Zurich (+1,18%).
Some signs of comfort come from two big names in the French list.
LVMH: THE CHINESE SHOPPING AGAIN
In the first quarter, the sales of the luxury giant Lvmh (+0,2%) fell by 17%. But in the last two weeks, the financial director of Louis Vuitton said in the meeting, China has started off again in a big way (+50% sales). The accounts of L'Oréal are positive thanks to sales in pharmacies (+13%).
Ratings agency S&P Global cut its global forecast, predicting coronavirus lockdowns will cause the world economy to contract by 2,4% this year and the US and eurozone to collapse by 5,2%, respectively. 7,3% and XNUMX%.
The political confrontation, both at European level and due to the contrasts between Italian politicians, was reflected in the performance of the government bond market. The Italian secondary closed the session higher but below the highs. The recovery is also linked, according to some analysts, to an internal document according to which in the next long-term EU budget there could be additional support for the countries of the bloc hardest hit by the virus, such as Italy and Spain.
THE SPREAD RISES AGAIN, ON 18 MAY THE NEW BTP ITALIA
At 17,30 Italian time the yield premium between Italy and Germany on the ten-year segment was quoted at 234 basis points from 230 at the start, after a minimum to 219. Similarly, the 10-year rate was worth 1,85% against 1,90% at the closing previous, after a dip to 1,73%. The two-year bond closed at 0,95% against 1,15% in the previous session.
The new edition of the Btp Italia arrives, which this time will raise funds for the Coronavirus emergency. The appointment for savers will be from 18 to 20 May, while for institutional investors it will be on 21 May. The news was expected, given that a maxi-issue with a residual amount of around 15 billion will mature at the end of April.
THE ROMBO OF FERRARI SOULS PIAZZA AFFARI
The roar of the Ferrari engine (+3,89%) woke up Piazza Affari. Yesterday the shareholders' meeting of the Red Army, which started the production of valves for pulmonary respirators and fittings for protective masks, approved the 2019 financial statements and the distribution of a dividend of 1,13 euros per share. The shareholders' meeting renewed the authorization for the Board of Directors to purchase ordinary shares of the Company up to a maximum of 10%.
Among the industrialists, Pirelli (+5,3%) and Prysmian (+3,8%) also shone. Fiat-Chrysler +0,4%. Cnh Industrial (-2,09%) and Buzzi (-2,8%) are down.
BANKS: HOLD UBI AND INTESA
Contrasted the banking sector. The European Central Bank will temporarily lower market-risk capital requirements for commercial banks to ensure they operate during the current phase of coronavirus volatility. Ubi (+2,99%), Intesa (+0,88%), Banco Bpm (+0,68%) and Unicredit (-0,66%) are progressing. In red instead Bper (-4,32%) and Popolare Sondrio (-2,78%).
JUVENTUS BOUNCES, TAKEOVER OFFER ON GUALA. DOWN RCS
We talk about football too early: Juventus +3,1%.
Among the mid caps, Guala was in the spotlight (+21,46% at 5,83 euros), after Investindustrial launched a partial voluntary tender offer at a price of 6 euros per share, aimed at acquiring up to 20% about voting rights.
Do Value on the rise (+14,18%): Equita Sim confirmed the buy and target rating of 10 euro per share. On the other hand, Rcs (-5,67%) and Mediaset (-4,21%) fell. Astm is also in negative territory (-2,68%): Equita Sim reduced the target price by 15% to 27,2 euros per share (rating buy), estimating a decrease in traffic of 22% over the year.
