The trend of oil is these days the most sensitive thermometer of the mood of the markets grappling with the thousands of rumors about the war. And in recent days, WTI oil has returned to full speed, accelerating in the last few hours, after +8% yesterday, one of the largest daily variations in the last year and a half. Buying continued overnight and this morning Texas crude traded at 105 dollars a barrel, up 2,5%.
Today we speak Biden and Xi
The reason? Just as in recent days the decline in crude oil has accompanied the hopes for the start of a negotiation, the increase between yesterday and today signals that we have entered the most delicate phase, the one in which, while on the field Moscow seems to increasing difficulty, you run the risk of breaking the thread of a possible deal. At 14 pm, US President Joe Biden and Chinese President Xi Jinping, two key players in the match, will talk on the phone. But on the eve Bloomberg, citing US sources, reveals that Beijing is moving towards support for Putin. He said the US Secretary of State Antony Blinken: "Our punishment will be triggered".
In this context, after the rises of recent days, the Stock Exchanges seem to be on the way to a final week of expectation.
Tokyo is a partial exception. The Nikkei was up 0,4% (+6,3% on the week) on the day of communications from the Bank of Japan, which opted to maintain the current ultra-expansionary monetary policy, thus breaking away from the path taken by the Federal Reserve and the Bank of England. The yen weakens against the dollar.
After two days of rebound, Hong Kong's Hang Seng loses 1%, recovering strongly from the initial -3%, the provisional weekly balance is positive (+3,5%).
The performance of the CSI 300 in Shanghai and Shenzhen is uncertain. The main index of the Chinese stock market turns up in the final stages from -1% at the start. The week ends at these prices with a 1% drop.
The Kospi of Seoul, +0,4%, closed the week with a rise of 1,50%. BSE Sensex of Mumbai +1,8% (+5,0% on a weekly basis).
Energy supports Wall Street
Rising oil buoyed Wall Street stocks yesterday. The S&P 500 was up 1,2% like the Dow Jones. NASDAQ+1,3%. Wall Street futures are down about half a percentage point.
Yesterday the protagonists of the session were not the techs, but the oil companies: the Energy sector closed up by 3,4%.
The rise in T bond yields continued for the fourth day in a row, reaching 2,192 (from 2,1875).
After the EU Antitrust OK, Amazon announced that it has completed the acquisition of Metro Goldwin Meyers for 8,45 billion dollars. It is the second largest deal ever for the tech giant.
Gold -0,5% to $1.932. Fourth day of euro appreciation, cross at 1,108 this morning.
ECB divided: Lagarde wants stimuli back, the hawks don't
The economic fallout from the war in Ukraine does not currently justify a return to “whatever it takes” style policies. This was stated by Francois Villeroy de Galhau, governor of the French central bank and member of the ECB board, after the Paris government presented an emergency plan to manage the crisis. A few hours later, however, Christine Lagarde took the field and argued that the war "poses significant risks for the growth" of the Eurozone. For this reason, the ECB is ready to backtrack on its plans to reduce the monetary stimulus and, if necessary in the face of the risks posed by the new geopolitical scenario, remains ready to implement new tools. After all, chief economist Philip Lane urged, "at least one percentage point of goods price inflation could be attributable to temporary energy-related factors and we have reasons to predict that it will decline." Conversely, Dutchman Claas Knot insists on a rate hike in the fourth quarter.
Europe slows down due to the war: GDP -1,5%
In short, in the ECB the debate to face the crisis is more alive than ever. Also because, notes Ignazio Visco, after just one week the ECB's estimates on the economic situation are obsolete: the reality is far worse because the war is weighing on world growth and in particular on the single currency area. According to OECD chief economist Laurence Boone, the cost is one and a half percentage points of GDP, against one point globally and even less for the United States.
The growth of the German economy will slow down to 2,1% in 2022, announced the Ifw, one of the main economic institutes in the country, which is part of a group of government advisers. The institute revised downwards its previous estimates of 4% growth. “The German economy once again faces strong headwinds,” Ifw said, citing new supply bottlenecks, high raw material costs and a decline in sales opportunities due to the war. The most recent forecasts from the German government in late January had estimated growth of 3,6%, up from 2,9% last year.
The spread is stable, the BoE also raises rates
In a context marked by the movements of the central banks and by the uncertainty of the top management of the ECB, the Italian secondary sector stands out for its price stability. The ten-year BTP is still closing at a yield of 1,91 (from 1,90%). The spread with the Bund of the same duration, traded at +0,39%, rises to 151 points against 150.
The Bank of England also raised rates by a quarter point to 0,75% as expected. The decision is again being explained as a measure to counter the record rise in inflation in the UK.
Eight of the nine members of the Monetary Policy Committee voted in favor of the hike, but Lieutenant Governor Jon Cunliffe voted against, given the strong impact on demand from the increase in commodity prices. The BoE said that inflation starts to reach about 8% in April
Only Piazza Affari in red (-0,66%)
Once the euphoria over a possible plan to quickly put an end to the war in Ukraine has dissipated, European stock markets experienced a nervous and mixed session.
Piazza Affari remains negative and loses 0,66%, falling to 24.123 basis points, mainly due to sales on bank stocks,
More contained losses in Frankfurt (-0,43%). Madrid (+0,33%), Paris (+0,36%) and Amsterdam (+0,56%) are positive.
London +1,3% on the day of the rate hike. The pound corrects down by 0,5%.
Thyssengroup is down 9,4% after suspending its 2021/22 outlook for free cash flow excluding M&A deals, due to the Ukraine crisis. The group added that it is unclear whether it will be able to spin off the company's steel division.
Moscow pays installments in dollars: default avoided
At least one factor of uncertainty vanishes: Russia, at least for now, will not default. The coupons on Russian government bonds due this week were received by correspondent bank JPMorgan, were processed, and the bank then wired money to paying agent Citi.
Russia has announced that it has paid its debts (117 million dollars) due this week in US currency and not, as threatened, in rubles.
JPMorgan, as a foreign correspondent bank, was obliged to process payments, although under the circumstances it had to confront the authorities before proceeding, given the seizure of Moscow's deposits: non-payment would have penalized the holders of the coupon.
Oil returns to rise: Morgan Stanley expects 120 dollars
The pressure on raw materials returns. Brent oil and Wti are up 9%, both above $100 a barrel again. European Natural Gas is also advancing +4%. The sharp rebound in oil comes after enthusiasm for a quick end to the conflict in Ukraine cooled.
Meanwhile, the International Energy Agency (IEA) said 3 million barrels per day (bpd) of Russian oil and products could be off the market starting next April. The loss of supply would be far greater than the expected 1 million barrels per day drop in demand triggered by rising fuel prices, the IEA said in a report.
Morgan Stanley raised its Brent price forecast by $20 a barrel for the third quarter to a target of $120 a barrel, expecting Russian production to decline by about 1 million barrels a day from April. A decline that could more than offset the downward revision to global demand by about 600.000 barrels a day, the investment bank said.
Today Eni presents its future
Important tests today in Piazza Affari for the state giants. Eni (+2,66% after the accounts presented yesterday) illustrates the strategic plan to 2050. The 2021 profit drops to 5,8 billion (from 6,1) to take into account the estimate of Saipem's result. However, the dividend does not change: 0,86 euros per share, the balance of 0,431 euros of which will be paid from 25 May next, with the coupon detachment on 23. The interim was distributed in September 2021.
Saipem (+4,1%) was yesterday one of the best stocks: the company was awarded a contract by Aker BP for a drilling campaign off the coast of Norway. The start of operations is expected from the end of the fourth quarter of 2022, when Scarabeo 8 will have completed the work in which it is currently employed. Value 325 million dollars. Tenaris advances by 3,5%.
Starace: nothing to fear from taxes on extra profits
They also arrived during the day the accounts of Enel, down 1,79%. The energy giant closes 2021 with group net income of nearly 3,2 billion euros, an increase of 22,2%, and a net ordinary result of almost 5,6 billion euros (+7,6 .XNUMX%), thanks to the positive performance of operations.
Francesco Starace underlined that Enel "has nothing to fear" from measures to tax extra profits. The current turbulence does not jeopardize the payment of forthcoming dividends. Enel has no gas supplies from Russia.
In yesterday's session Diasorin shone at the top of the list with an increase of over 6% after the 2021 results above expectations and the guidance for the year confirmed. Several brokers have raised their recommendations on the stock: Equita Sim, Banca Akros and Mediobanca Securities.
Banks under fire again: Banco Bpm black jersey (-6,9%)
The banks are heavy after the recovery on the eve. Intesa Sanpaolo loses 3,8%. CEO Carlo Messina said he will give an indication of the impact of the conflict in Ukraine on 2022 earnings in the first quarter results. Banco Bpm (-6,9%), Unicredit (-4,40%) and Fineco (-4,21%) are also under fire.
Positive Atlantia (+2%) after the Court of Auditors gave the green light to the preliminary deeds for the sale of Autostrade per l'Italia to the consortium led by Cdp.
Iveco also rebounds (+3,44%) unlike Stellantis (-3,5%) on the eve of new production stops due to lack of chips.
Juventus (-7,8%) is the worst title for the Agnelli team after their elimination from the Champions League heavy effects on the club's budget.
Open Fiber is asking Tim for 2,6 billion in damages
Telecom Italia turns negative (-1,16%) after it emerged from the financial statements that it will have to face a claim for damages increased to 2,6 billion in the lawsuit relating to the alleged abuse of a dominant position in the broadband market after the summons from part of (for now) rival Open Fiber.
Buzzi sells 2% after JP Morgan cut the rating from "neutral" to "underweight" with a target price of 17 from 23 euros.
Well done Moncler which reiterated its marginal exposure to Russia.
Eprice rises by almost 40% after the e-commerce group accepted the binding proposal of Negma Group aimed at the recovery of the company.
