“There are times when on Wall Street you can hear the grunts of the Bear hiding in the forest from afar”. With this poetic image, an analyst explains to Bloomberg that a non-negligible part of the Bigs is aiming for a price correction, in the order of a good 10%, before restarting purchases. The first opportunity to trigger the change of course comes with central bank meetings. Today the ECB, in all likelihood, will send a mild anti-inflation signal by reducing purchases via Pepp, but will reiterate that interventions via Qe (the traditional channel of intervention) will continue at least until 2024. A more convinced squeeze will arrive at the end of the month from the Fed where the “tapering” party is growing. But there are other clues that suggest a complicated phase for Wall Street.
YELLEN SOUNDS ALARM ABOUT DEBT, BEIGE BOOK DOUBTS
Janet Yellen's alarm first. If the public debt ceiling is not raised, there will be serious trouble in October, with serious repercussions on bonds. But the state of the recovery is also worrying as it emerges from the Beige Book: companies, we read, are having to face a sharp increase in the price of raw materials, a shortage of semi-finished products and a general difficulty in finding everything needed to keep going business: staff is also not easy to find.
Even in Asia, caution prevails. Tokyo's Nikkei (-0,7%) is negative after eight consecutive sessions.
THE EVERGRANDE CASE EXPLODES IN HONG KONG
The CSI 300 of Shanghai and Shenzen also fell (-0,5%) after the publication by the National Statistics Office of data on producer and consumer prices. The former, driven by the increase in the price of raw materials, are galloping, in August they rose by 9,5%, but surprisingly, inflation cools down slightly, rising by 0,8%.
Hong Kong's Hang Seng Index is down 1,7%. Two big names in the Internet economy such as Tencent (-5%) and Netease (-6%) descend into it: the media report that the managers of the two companies have been summoned by the Beijing supervisory authorities to explain how they are responding in practice to the new legislation on minors and video games.
Evergrande Group, the real estate developer which is in precarious financial condition, lost 8%.
BILL GATES BUYS THE FOUR SEASON CHAIN
Nasdaq futures are down 0,1%, the index lost 0,7% yesterday, the S&P500 0,1%. Dow Jones -0,2%.
Bill Gates has acquired control of the Four Seasons chain by acquiring the share of Saudi prince Al Waleed for 2,2 billion dollars.
Sharp decline Coinbase (-3,2%): the Sec has threatened to sue the platform if the cryptocurrency-based loan project continues.
AND YOGA GOES BOOM: LULULEMON +13%
Lululemon sportswear runs (+13%). The yoga and meditation clothing company raised its forecast for the current fiscal year (January 300-January 2021) by $2022 million to $6,26 billion.
WTI oil is flat at $69,2 a barrel. Gold fell to $1.788.
ECB, TOWARDS A (MODEST) CUT IN PEPP PURCHASES
The prevailing opinion, both in Europe and in the USA, is that today the ECB will cut, albeit slightly, the weekly purchases of securities according to the Pepp programme, anticipating a similar operation by the Fed, strongly supported by James Bullard, one of the most influential members of the US central bank. The conditional is a must on the eve of the directorate meeting which, in any case, will give guarantees on the maintenance of low rates. However, yesterday the markets, albeit cautiously, took into consideration the new scenario imposed by the rise in inflation (more serious than is admitted, reiterated the Austrian banker Robert Holzmann) and by the political climate, less than two weeks by the German vote which will have, however it goes, a great influence on the choices of the European Union.
FROM 80 TO 60 BILLION A MONTH, BUT THE DOLLAR IS RISING
The most accredited forecast sees a cut from 80 to 60 billion per month of purchases until December and then drop to 30 billion/month waiting for the Pepp funds to be used up by March. But the purchases envisaged by the Qe will continue, albeit to be dosed with "great flexibility".
The prospect of the imminent tapering did not stop purchases on the dollar at their highest levels in a week but curbed the run of stock markets on both sides of the Atlantic, while bond yields remained at their highest levels.
BTP, YIELD AT 0,74%, A GREEN BOND FROM GERMANY
The 0,74-year BTP yields 0,34%, slightly below the previous levels but close to the highs since mid-July. The Bund of similar duration travels at -107%, the spread at 108 (against 21 on the previous day). In the meantime, the green offer is gaining space. While awaiting the Brussels-branded issues (departing on 3,2 October), Germany yesterday placed a XNUMX-year green bond for XNUMX billion euros, in the wake of Spain's XNUMX-year bond.
MILAN -0,75% BELOW 26 THOUSAND SHARE
In the meantime, Piazza Affari lost 26 points (25.876 points at the end), dropping 0,75%.
CARS AND SIEMENS SUFFER ON THE DAX
Frankfurt is doing worse (-1,5%), where the slowdown in car deliveries and the collapse of Siemens (-3,5%) weigh.
The difficulties of the subsidiary Siemens Gamesa (-6,9% in Madrid; -0,77% at the Stock Exchange at the end of the day) caused the collapse: JP Morgan cut the wind power company's rating to underweight. European leader Vestas dropped sharply in Copenhagen (-3,8%).
PARIS: SANOFI GOES BACK, INTERPARFUM COLLAPSES
The other markets were negative: Amsterdam -0,72%, London -0,76%.
In Paris (-0,85%) Sanofi is down (-2,5%) after the purchase of the American biotech Kadmon for 1,9 billion dollars. Interparfums was also under fire (-4,98%) which revised its estimates for the year downwards.
STELLANTIS PAYS FOR DONGFENG'S EXIT
The decline of Stellantis weighs on Piazza Affari (-2,86%), which on Tuesday evening, through an Accelerated Book operation, the Chinese shareholder Dongfeng Motor Group sold 1,15% of the capital for 600,4 million euros at the price of 16,65 euros per share. The Chinese company will retain a 4,5% stake in Stellantis upon completion of the share sale. "The move does not surprise us given that after the merger the role of Dongfeng (which was strategic when Psa was independent) has been reduced and we expect that in the short / medium term it will be able to exit completely", writes the broker Equita in the daily report.
EXOR - 0,89%. MEDIOBANCA: NAV DISCOUNT TOO HIGH
Exor also marks time -0,89% after the accounts. The stock trades at a 40% discount on the value of the investees, unjustified for the analysts who reiterated a burst of buys. “The stock – comments Mediobanca Securities – is traded at a discount of more than 40% compared to its net asset value, well above the historical average of 27%. We therefore reiterate our outperform rating on the stock with a target price of 83 euros”.
US PATENT FOR PIAGGIO, BUT THE TITLE HOLDS BACK
Piaggio is also slowing down (-3,90%) despite the fact that, after the agreement with the Japanese manufacturers on batteries, another positive news has arrived, this time from the USA. The government agency has approved a patent from the Pontedera-based company for a sensor for self-driving vehicles. According to Mediobanca (outperform rating and target price at 3,70 euro), the news is a concrete demonstration of the group's innovation and could support turnover in the long term.
The other industrialists fell sharply: Prysmian -2,76% and Cnh Industrial -2,20%.
FERRAGAMO SHINES, TODAY IT'S THE TURN OF TOD'S
The positive note comes from Salvatore Ferragamo (+6,5%), after the recovery of profitability recorded in the accounts for the first half-year, announced on Tuesday after the markets are closed. The indications for the months of July and August in which the group recorded revenues close to pre-pandemic levels also help. Several upgrades by brokers. Equita brought the recommendation to "buy" and the target price to 20,5 euros. Deutsche Bank brought the target price to 18,8 euros from 17,70. Morgan Stanley at 18,5 euros from 17.
With closed markets, Tod's half-year accounts were released (yesterday -0,2%): turnover skyrocketed to 398,4 million (+55%), ebit -2,7 million against -94 million a year ago. The performance of the e-commerce channel was “excellent”.
Diasorin (+2,75%) and the utilities rebound: A2a +1,94%, Snam +1,46%. Hera +0,94% was awarded 100% of Ascotrade.
BANKS, TAX INCENTIVES FOR MERGER EASIER
Banks retrace slightly; Unicredit and Intesa Sanpaolo down by 0,1% and 0,44% respectively. Bper is also down, falling by 0,25%.
The tax incentives for bank combinations can be applied to "several separate transactions approved or resolved in 2021", as clarified by the Revenue Agency in a resolution that fuels market expectations on multiple mergers.
WITT, GOOD PROFITS ON THE CLOUDS
In the afternoon, Witt started on the upside with a leap of more than 5%. The stock of the company active in the cloud computing service for businesses has been on the shields for several sessions. Yesterday, in particular, the market rewarded the data for the first half closed with a growth in adjusted revenues of 52% to 35,1 million euro and an adjusted gross operating margin of 14,2 million (+72,8%).
AT AIM FERVI (MAINTENANCE) GOES SHOPPING
WeBuild performed well (+1,04%) which, as part of the Sotra Link consortium, was awarded the contract worth over 1 billion euros for the construction and management of a road system to be built in Norway.
In red instead Fila (-6,96%) after the private equity Vei Capital has completely exited from the capital of the group. On Aim, Fervi rallied (+12,71%) after the acquisition of Rivit based in Ozzano dell'Emilia.
