Asia continues along the road to recovery. The confirmation came this morning from the economic data of Japan and, above all, of China. Beijing's GDP rose by 4,9% in the third quarter, accelerating compared to the previous 3,2%. The Stock Exchange expected more, judging by the tepid reaction. But the advance of Asia is undoubtedly the most positive note of the global market, put under pressure in Europe by the contagion and the air of divorce on Brexit. Finally, futures signal the possible compromise on stimulus to the US economy.
USA, CLOSE AGREEMENT ON STIMULI
At the end of an hour-long meeting with Treasury Secretary Steven Mnuchin, Nancy Pelosi said she was optimistic that a compromise could be found. Futures on US stock markets thus open the week in positive territory.
TOKYO +1,2%: CHINESE CONSUMPTION RUNS
Tokyo's Nikkei is up 1,2% after the release of the trade balance. In September, the drop in exports was only 4,9%, the least extensive drop in the last seven months: in August there was a drop of 15%.
The Shanghai and Shenzhen lists are more cautious (-0,5%). Hong Kong's Hang Seng gains 0,7%. The Seoul Kospi is also up: +0,5%.
THE SAMSUNG HEIR RISKS JAIL
Supported by the trend of chips. The prospect that Lee Jae Yong, the heir to the Samsung fortune, could end up in prison again for manipulation of the accounts does not matter: the sentence is expected this week.
The performance of the Chinese economy confirms the V-shaped recovery of the Dragon, practically recovered from the Covid 19 risk. Several confirmations of the acceleration underway arrived from Beijing tonight. In September, Chinese industrial production rose by 6,9%, from +5,5% in August and against +5,8% expected. Consumption data for the same month said that China is looking more and more like a developed economy driven by consumption: retail sales rose 3,3% yoy, much more than forecasts. Auto sales rose 12,8% last month.
XI HOLDING DOWN THE EXPORT OF TECHNOLOGY
Xi Jingping, visiting Shenzhen to celebrate 40 years of Deng Xiao Ping's reforms, announced a law to protect technology exports in response to US legislation.
The Indian Stock Exchange is also advancing: +1%. The commission of scientists and experts appointed by the government said that in India the contagion has reached its peak, around 7,5 million infected, and that the epidemic should return under control around February, due to the gradual decline of the new positive. Last week's average is a third lower than last month's.
WTI oil down slightly to 40,7 dollars a barrel. The meeting of the interministerial committee of OPEC+ members is scheduled for today.
Weak dollar this morning. The euro trades at 1,172 against the US currency. The spotlight is on the pound ahead of Brexit news.
EU GRASPING THE SECOND WAVE, THE EU AND THE FED SPEAK TODAY
“I can't believe it: the second wave arrived much earlier than expected. Now the recession is very likely”. The forecast by Allianz analyst Katharina Utermoehl illustrates the fears of the markets well. Today it will be up to the Fed president, Jerome Powell, and the number one of the ECB, Christine Lagarde, to find a way to reassure the markets, which are asking for new expansionary measures. But the US is focused on the next elections. On Thursday, President Trump and Joe Biden will clash in Nashville in the last direct confrontation before the vote. The US Senate will have to decide on Tuesday whether or not to impose a fine on Twitter's Jack Dorsey, after the CEO decided to censor an article in the New York Post on Hunter Biden, the son of the presidential candidate.
Madame Lagarde, returning from a panel discussion on Sunday as part of the annual IMF-World Bank meetings, will give a pre-recorded keynote address at the ECB's online conference on monetary policy.
MANEUVER AT THE START, THE VERDICT OF S&P ON FRIDAY
In Italy the hottest topic concerns the acceptance of the manoeuvre. An examination that will culminate on Friday in Standard & Poor's judgment on the rating. Currently, the agency classifies Italian debt with triple B and a negative outlook, just two degrees above the junk level.
Prime Minister Giuseppe Conte, presenting the new emergency measures, said that the country cannot afford a new setback, "which would end up severely compromising the entire economic fabric". The places that have seats will be able to remain open until midnight, while the others will have to close at 18 pm. In restaurants, no more than six people can dine per table. Take-away catering is only allowed until midnight. No limits for home deliveries.
The stop to all contact sports has been extended to amateurs. The swimming pools and gyms will remain open for now, but the premier has given the owners seven days to adapt to the safety protocols. Forbid festivals, but not fairs. Congresses and conferences have also been suspended, which can only be held remotely.
COMING SOON THE EU BULLETIN AND THE US BEIGE BOOK
The prospect of a brake on the economy largely cancels out the effect of the reassuring data for the third quarter. Among the data expected for the week are the consumer price index and industrial orders in Great Britain. Tomorrow the Bulletin of the ECB and the Beige book in the USA will be released. The calendar foresees the French, German and Eurozone manufacturing PMIs for the weekend. And again from Germany, the Ifo index on business confidence.
TIME OF ACCOUNTS: WAITING FOR NETFLIX AND TESLA
On Wall Street the spotlight is on Netflix's quarterly. Week full of corporate data starting with the car. On Wednesday it will be Tesla's turn, preceded by Volvo on Tuesday. The accounts of Kia, Hyundai and, on Friday, of Renault also arrive.
AUTO, FOOD AND FINANCE AT X-RAYS
A week of exams also for the food sector: the quarterly Coca Cola, Danone and Nestlé are arriving. Among the financials, Barclays and Ubs stand out.
ATLANTIA: CDP AND BENETTON MAYBE STRESSED
At Piazza Affari, perhaps a crucial day for Atlantia. The consortium led by the Cassa could produce an offer capable of convincing the Benetton family to sell the 88% of Aspi held by the parent company and give up the double-track of splitting Aspi and listing it. Atlantia has signed the contract to sell 49% of Telepass to the Swiss private equity fund Partners Group.
