PIAZZA BUSINESS AGAIN BLACK JERSEY BTP/BUND SCISSORS AT 337 BP
ON THE HIGH SEA A SOLUTION FOR GREECE AND FOR THE US BUDGET
Tensions remain high on the markets, both debt markets and stock exchanges. Italy, in both cases, is the most exposed country. As far as government bonds are concerned, the 10-year Btp rises by 21 basis points to 5,9%, while the spread with the Bund widens to 335 basis points from last Friday's close at 308 basis points. Meanwhile, Piazza Affari confirms the black jersey of the Stock Exchanges with a drop of 2%, well above Paris and Frankfurt (-1%) and London -0,8%. Madrid is just above parity. Futures on the three main American indices are down, with declines of between 0,7% and 0,9%. Concerns about the sustainability of sovereign debts are on hold on both sides of the ocean.
In the United States, a few days before the deadline for raising the debt ceiling expires, the Republicans and Democrats still have to find an agreement. For the second tranche of aid to Greece, Europe has been sailing on the high seas for months now. Ahead of Thursday's summit, which should finally pave the way for a second aid plan for Greece, disagreements continue among the EU's strong partners. Angela Merkel has announced that she will travel to Brussels only if "a concrete result is in sight". That is, an agreement on the German ruling to have the banks share the financial sacrifices as well. Valerie Pècresse, Parisian budget minister, replies that "all avenues need to be explored to ensure that the involvement of private individuals does not jeopardize the appeal of the euro to investors", as will inevitably happen in the event of default.
BANKS AND INSURANCE UNDER FIRE
WITHOUT EFFECT THE OUTCOME OF THE STRESS TESTS
The uncertainty of European sovereign debt treatments obscures the positive outcome of the bank stress tests. Throughout Europe, the hardest hit securities are banks and insurance companies, down by 1,7%. Also in this case, Milan is no exception: Intesa loses 4%, Unicredit 3,07%, Banco Popolare, on the day of the presentation of the business plan, 4,4%. And again: MontePaschi -3%, Ubi down 1,7%, Mediobanca down -1,8%. Among the insurance companies, Fondiaria-Sai fell by 4,7%, Generali fell by 1,7%.
ONLY PIRELLI ESCAPE THE GRIP OF THE BEAR
UNDER PRESSURE A2A WAITING FOR THE BOD
But the suffering of Piazza Affari has spread like wildfire. Stocks with the highest leverage are down, starting with the large utilities: Enel down by 1,6%, A2A -1,4%. Edison, on the other hand, rose by 0,7% to 0,83 euros, going against the market trend. The stock continues to benefit from the speculative appeal linked to the share reorganization: today the management board meeting of the shareholder A2A will be held, which will have to unblock the negotiations with Edf for the reorganization of Edison. Eni is also under pressure, losing 1,9%. Industrialists also suffer: Fiat -2,7%, Prysmian -1,8%, Finmeccanica -1,7%, Ansaldo -2%. StM -1,4% falls again. The only exception is Pirelli which rises by 0,1% supported by Exane-Bnp Paribas which raised its rating from neutral to outperform. Mediobanca confirmed the "outperform" rating and raised the target price to 9 from 7,47 euro. Among the other (few) blue chips bucking the trend, we also note Diasorin +1,8%, Campari +0,5%, and Enel Green Power +0,3%.
