Wall Street gallops to greet the arrival of Fed Chairman Jerome Powell, engaged in his first parliamentary hearing after his appointment. The markets are betting that Donald Trump's banker will be careful not to jeopardize the health of the stock market, so dear to the president. The necessary rate hike will take place, but without exaggerating. In the meantime, yesterday the US price lists experienced yet another positive day, without paying too much attention to the less than exciting signals coming from the housing market, however conditioned by the cold which blocked many construction sites.
WALL STREET HAS CANCELED THE MARKETS
The stock market indices have now recovered the losses caused by the crash at the beginning of the month. The S&P 500 index +1,11% is only 3,5 points off its January 26 highs. Dow Jones up 1,52%, Nasdaq up 1,06%.
The Vix or fear index returned to normal (at 16,33).
Even on the government bond front, the fever has passed: the T bond trades at 2,8605, far from the highs of a week ago. The absence of demanding auctions for the next 10 days also favors calm.
WARREN BUFFETT HAS 116 BILLION CASH IN HAND
All sectors are progressing a bit, starting with technology and finance. But the real winner, as usual, is Warren Buffett: his Berkshire Hathaway (+3,7%) sits on a mountain of cash equal to 116 billion dollars. The Omaha sage has announced that it will proceed with stock buybacks rather than dividend hikes.
OIL FLY AGAIN. ACCELERATE TENARIS
In short, optimism reigns supreme, also thanks to the push coming from oil supported by crude oil prices (Brent at 67,90, Wti at 63,90): consumption is growing, driven by the economic situation and Saudi Arabia is message from Minister al Falih: in 2019, OPEC will loosen production restrictions.
In Piazza Affari, Tenaris once again stood out (+2,4%). Barclays analysts confirmed the overweight recommendation and the target price at 16,5 euros. Experts expect a strong recovery in the areas where the group operates. Eni also rose (+0,5%) despite the cut in the recommendation by the Royal Bank of Canada. Saipem -1%.
MILAN AT THE BOTTOM OF THE PLATOON
The comforting notes arriving from Wall Street favored a positive start to the European financial week. Mario Draghi's words on inflation caused a momentary slowdown in the euro, which soon returned.
Even yesterday Milan was the most timid market among the European price lists. The Ftse Mib index (+0,15%) closed at 22.705 points. Last week the index lost 0,5% against +0,6% for the Eurostoxx.
Since the beginning of the year, Piazza Affari is still the best stock exchange: +3,7% against Frankfurt -3%. The Eurostoxx index marks -1,7%.
"After the vote, there will probably be a stalemate in Parliament," Minister Pier Carlo Padoan said yesterday evening. “But – he added – in a framework of economic stability”.
The other markets are more tonic: Madrid +0,94%, Paris +0,69%, Frankfurt +0,49%. Outside the Eurozone London +0,74%.
DRAGHI: THERE IS GROWTH, THERE IS NO INFLATION
"Economic growth in the eurozone is robust but underutilization is more significant than expected, consequently slowing the path of inflation." So yesterday Mario Draghi at the budget commission of the European Parliament. “The slow recovery – he added – is particularly evident in the labor market where wage growth has remained low despite the solid increase in employment levels”. “Looking ahead”, concluded the ECB president, “we can anticipate that inflation will continue on its upward adjustment path, supported by monetary policy measures”.
What requires attention, then, is the volatility of the foreign exchange market.
The bond market is under control in the week preceding the vote. The Btp/Bund spread narrowed to 136,6 points. The 2,21-year yield is XNUMX%.
Yesterday the Treasury placed 6 billion six-month BOTs at rising yields, the highest since October.
Today it's the turn of medium to long-term securities. The offer, for a total of 7,75 billion, concerns five-year BTPs (the new 2023 maturity) and ten-year bonds as well as a CCTEU. On the gray market, the new 5-year was trading at 0,95% yesterday against 0,75% for the August 2022 maturity. The 2,11-year was trading at 2,06% compared to 22% last month. The Treasury has already covered the 2018 Approximately % of the borrowing requirement for 387 (XNUMX billion).
UNCERTAIN BANKS, MAJOR OPERATION ON CREVAL AND CARIGE
Electoral uncertainty did not affect the first session of the week too much.
The confrontation between Mediaset (-0,38%) and Vivendi restarts today in the courtrooms after a nine-month mediation attempt.
Telecom Italia +0,8% after the OK of the board of directors on the sale of Persidera.
Contrasted the banking sector. The movements of the Bigs were modest: Intesa +0,06%, Unicredit -0,24%. The worst is Ubi with a drop of 1,35%. It was the day of the smaller banks. Creval took off (+2,22%) and the rights to the capital increase increased (+42,2%). Great movement also on Carige +6,17% driven by the expectation of the arrival of new funds after the investment by Raffaele Mincione.
LUXURY, MONCLER AND CARIGE SHINE
Accounting journals. The results of the leading luxury companies were positive. in par Moncler +0,96% marks the new historic record on the eve of its long-awaited Investor day. The results were announced yesterday evening: revenues of 1,19 billion (+17% at constant exchange rates), net profit of 250 million. A dividend of 0,28 euro has been proposed (against 0,18 a year ago).
Luxottica also performed well (+1%) which announced the results for the quarter in the evening. The group recorded a profit of 970 million (+12,2% year on year at constant exchange rates, +10% at current exchange rates) on a turnover that rose to over 9 billion. The dividend will rise to 1,01 euro (+10%). Net borrowing is down (-37%).
PIRELLI SETS THE PACE, NEW RECORD FOR FERRARI
Day of accounts also for Pirelli, unchanged. The 2017 financial year closed with a net profit of 175,7 million, in line with the forecasts formulated in the 2017/20 business plan.
Prysmian down (-1,85%) on the eve of the results.
Setback for Fiat Chrysler (-0,54%) after the anticipation of the Financial Times on the halt to diesel production starting from 2022. Ferrari instead extends +0,29% after reaching a new high at 106,75 EUR.
RECORDATI AND CAMPARI RAISE THEIR HEADS
Recordati (+2,9%) and Campari (+1,2%) rebound after last week's losses.
Bad day for utilities held back by interest rate tensions. The worst is Italgas (-1,5%). The discounted acquisition of 82% of the TOE did not give Snam any sprint (-0,11%). Only A2a (+0,71%) is in positive ground.
Maire Tecnimont is out of the main basket (+8,2%) after Barclays raised the judgment to overwieght from equal weight. However, the broker lowered the target price to 5,5 euros from 5,7.
