Opening under the banner of uncertainty of the Asian stock exchanges. The pessimism that emerged from the Tankan, the super-index of the economy, weighs on Tokyo, which nullified the effect of Shinzo Abe's electoral victory. In the end, however, the markets partially corrected their course: the Nikkei, already down by 1,9%, reduced its losses.
Meanwhile, the weakness in the price of oil continues to have an impact on the currencies of the producing countries: the ruble, down by 9% last week, falls to an all-time low despite the increase in interest rates; the Brazilian real slips to the values of 2005 (-7,2%) while the oil giant Petrobras falls by 18%. The Indonesian rupiah was also down sharply (-2,8%). A possible episode of terrorism in Sydney also influenced the session.
A mixed start is also looming for the European stock exchanges, already concentrated on the key event of the week: the Federal Reserve board scheduled for tomorrow. The markets are coming to the appointment in less than ideal conditions: more than a trillion dollars have been burned in the last week under the pressure of the drop in crude oil and fears of a collapse of emerging markets.
It is the account that the Stock Exchanges present to the Fed on the eve of the last meeting of 2014 of the US central bank. Attention is hanging on the thread of a few words: according to rumors, the FOMC statement could cancel the expression "rates will not rise for a reasonable time", to anticipate the change of course on the cost of money policy. Supporting this thesis are: a) the growth in consumption (+4,4% in November); b) the trend of employment; c) the agreement on the federal budget for 2015.
But in recent days many clouds have accumulated over the skies of the markets, news that could prompt a new postponement: inflation, at the time of oil below 60 dollars, is not scary.
PETROLEUM
“Too much of a good thing is wonderful,” said Mae West, the sexy icon of 45s cinema. Maybe that's not true, judging by the sharp drop in stock markets, the worst of the year. Since June, WTI prices have fallen by 61,73%, reaching the level of 1,95 dollars a barrel on Friday (- 57,72 dollars compared to the day before). Brent, at 2,23 (-2009 dollars in the session) is at the levels of May 56,25. This morning, at the opening, there were new lows (1,3 dollars a barrel) before a robust rebound (+XNUMX .XNUMX%).
The decline undoubtedly entails major benefits for consumers' energy bills (1.700 billion dollars saved, but causes side effects: drop in inflation, fall in investments in the energy sector, renewed aversion to risk. In summary, in the eyes of the operators , a new push towards recession. Hence the step backwards in stock markets: the S&P index fell by 3,5% during the week. European stock markets fell sharply. Bringing up the rear is Milan -7,4% ahead of Madrid -7% and Paris (-7%), hit in the final stages by the downgrading of French debt by S & P. London (-6,5%) and Frankfurt (-4,8%) were also heavy.
GREECE/BTP
The Greek political crisis contributes to complicating the game on the European chessboard. Prime Minister Antonis Samaras, after obtaining a two-month truce from the troika (ECB, IMF, EU) before defining the new aid plan (in exchange for sacrifices), brought forward the vote on the new president of the Republic. By 29 December, the date of the third ballot, the government expects to collect 180 votes in favor of its candidate. Otherwise, early elections will be inevitable in which Alexis Tsipras could prevail, determined to cancel the agreements with Brussels.
This also explains the increase in yields on securities of countries in the so-called periphery of the euro area: the 2,05-year yield is unchanged at 144%, but the spread with the Bund widens to 117 (against 5 on 0,62 December) as the panic in the financial markets pushes money once again towards the German government bond, the yield of which falls to a new all-time low of XNUMX%.
Athens is not the only cause of so much turbulence: together with the Bunds, the US T bonds also rise (the 2,08-year is at XNUMX%) due to the problems of the emerging countries, under pressure in view of a possible rise in American interest rates and the collapse of the crude oil: Venezuela, in particular, seems close to default.
ENERGY, FOR INDIVIDUALS IT'S AN OPPORTUNITY
For Stephen Schwarzman of Blackstone and David Rubenstein of Carlyle the situation is excellent: after the fall in prices, they say, the energy sector "is the best investment opportunity in recent years". The S&P Energy index fell 2,2% on Friday. The drop, since the beginning of 2014, is equal to 16,5%, the worst among the ten segments of the list. Both Exxon and Chevron are at 52-week lows.
Eni closed the week with a drop of more than 10% on the new lows since November 2011 at 13,77 euros. The major has removed Saipem from the market, stating that "recently the market conditions have become unstable and therefore, while confirming this strategy, the evaluation of the options is suspended".
From the beginning of October to Friday, the stock of the oil equipment company lost 46% (it closed at 8,68 euros) returning to the levels of the end of 2004, weakened by the crisis affecting the sector but also by the uncertainty surrounding the South Stream .
Tenaris (Friday -3,7%) is down 35% since early October. Among the major oil companies Conoco Phillips has already announced heavy cuts in investments and the market expects that many other majors will change their strategies.
TEST FOR GENERALI (AND UNIPOL) AFTER S&P SLAPS
S&P decreed on Friday evening the downgrading of Generali because… Italian. In fact, the rating agency rule states that a company cannot have a rating two notches higher than the country rating. Therefore, after the retrocession of the Italian debt, the Lion of Trieste was downgraded from A- to BBB, despite the fact that 70% of the business takes place outside the borders and that the Solvency 1 indicator, after the sale of Bsi in September, is rose to 169%. “A senseless rule” thundered Mario Greco, CEO of the company.
The agency has revised downwards the rating of the entire Italian insurance sector: Unipol Assicurazioni and Cattolica go from BBB to BBB-, Allianz Italia, a subsidiary of the German giant, from A to A-.
MPS AND CARIGE ARE BREATHE
To follow the reaction of Piazza Affari to the promotion of Mps (-2,31% on Friday) and Carige (+2,16%) in the appeal examination by the ECB. Final approval by the ECB's governing council will take place on the 18th. From that moment, the 9-month deadline will start to implement the plans. That is, the measures identified by MPS to raise just over 3 billion, necessary to between the source and the capital gap (2,1 billion) and return the Monti bonds (one billion). Siena's roadmap provides first for the approval of the 2014 accounts, then for the election of the new board. Finally, in the second quarter, the launch of the capital increase.
Carige's board of directors will meet tomorrow: also in this case the capital increase, already approved, is scheduled for the second quarter.
TELECOM ITALY
Hot end of the year for the former incumbent of the TLCs. The Brazilian situation is in a stalemate: the Portugal Telecom assembly could reject the sale to Altice, complicating Oì's plans. No less complex is the situation on the Italian chessboard, after the expression of interest in Metroweb. Franco Bassanini, president of Cdp reiterated that the 46% held through the Italian strategic fund is not for sale. On the contrary, the CDP is ready to increase the capital endowment in the hope that the majority shareholder, F2i with 53% of the capital, will compete. To the operation. From the bottom it is known that before making a decision it will be necessary to evaluate the industrial plans of the potential buyers (Vodafone, in addition to Telecom Italia). There is no rush to sell (F2i has been in Metroweb for just three years) or to hand over control to a single player: Telecom Italia, on the contrary, intends to acquire 51%.
