There is no peace on the markets due to the Ukrainian crisis, despite the fact that the accounts of some companies such as Stellantis partially supported the mood of the European stock exchanges today.
Bags on the swing
Piazza Affari loses 0,34% and slipped to 25.955 points, after having tasted a good rise during the session as indeed happened in Frankfurt -0,4%; Paris -0,1%; Amsterdam -0,55%; Madrid -0,68%. In slight contrast London, +0,09%.
In the early afternoon, the harmonious start of Wall Street had boded well and we were counting on a rebound, given that the S&P 500, with yesterday's losses, entered the correction and lost more than 10% from its January peak. But the New York indices then reversed course and right now they're in fractional decline.
Optimism stemmed from the fact that the sanctions decided against Russia by the United States, Europe and Japan are not so heavy as to exclude a diplomatic exit from the chaos. The pressure of news from various parties, including a cyber-attack on government sites in Kiev and EU sanctions, coupled with the expectation of a tightening by central banks, has evidently changed the mood of investors.
The battle with sanctions continues to weigh on the gas prices, which also rose in today's session, while oil, which had started the day down, is regaining strength and is currently on the upside. Brent is marching back towards 100 dollars and is up 1,4% to 98,2 dollars a barrel. Gold recovers, which after having lost 1900 dollars, is now trading at 1906,92 dollars an ounce.
Stellantis queen
To support the main list of Piazza Affari, while giving a good boost to the European index, is Stellantis which appreciates by 4,41% after the presentation of the 2021 budget, significantly higher than expected. Net income at 13,4 billion has almost tripled compared to 2020. The board of directors will propose a total dividend of 3,3 billion euros at the shareholders' meeting on April 13, approximately 1,06 euros is the dividend per share, above the consensus of 1,01 euro. Exor does not rejoice (-0,5%), but as the first shareholder with 14,4% of the capital and voting rights of Stellantis, it will pocket a coupon of 475,2 million euros.
Diasorin +3,38% and Inwit +1,76% are confirmed at the top of the list, together with defensive stocks such as those of utilities.
Instead, Campari is crying out loud, -9,77%, after estimating a negative impact of raw material costs on 2022 margins. This ballast forces the group to postpone the previously expected improvement and to forecast a substantially flat organic EBIT margin.
The balance sheet for the day is also red for Cnh, -6,14%, since evidently the 2024 industrial plan presented yesterday did not make inroads. Analysts judge it a bit conservative and influenced by the macroeconomic scenario.
It has already left for a few sessions the haemorrhage on Saipem, -5,16% and Telecom also fell, -3,3%. “Today on the stock market the theme of Tim that he may not distribute the coupon and sell the stake in Inwit is still on the table,” a trader told Reuters.
The banks are negative, starting with Banco Bpm -3,86% and Intesa -1,48%. Outside the main basket, MPS dropped 1,38%, while Economy Minister Daniele Franco, in the Chambers, said he had started discussions with the European Commission to obtain a "suitable extension" to the end of 2021 for the sale of the investment held in Monte dei Paschi (equal to 64% of the capital).
Gas Plus remains on the shields, +18,89%, galvanized by gas prices.
Ukraine crisis and central banks
What will central banks do in an environment where the winds of war are blowing, but inflation continues to run? Bankers and observers are divided.
For Francois Villeroy de Galhau, governor of the Central Bank of France and member of the board of the ECB, the tensions in Ukraine should induce Eurotower to "buy time" on a possible rate hike and to maintain "flexibility" for the exit from the stimulus measures. Frankfurt will have to evaluate the "indirect consequences" of geopolitical events. "Time is of the essence to avoid mistakes" and we need to weigh the actions that must be "taken not too late with the risk of letting inflation run wild and not too early so as not to slow down the recovery".
For ECB Vice President Luis de Guindos however, net asset purchases will have to end before interest rates can be raised. For fellow Austrian Robert Holzmann, however, the ECB could start raising interest rates before ending its bond-buying program. And this is a position in contrast with the guidance reaffirmed by the president Christine Lagarde.
Meanwhile, Citi experts argue that the escalation in Ukraine it is unlikely to convince central banks to postpone tightening unless it really comes to war. Citi thus reiterates its forecast of a 50 basis point hike from the US Federal Reserve in March.
The Governor of the Bank of England Andrew Bailey warns that there is a clear risk that high levels of inflation could prove sticky.
On the other hand central banks are far behind what inflation is showing. A new reminder arrived today, with January eurozone inflation data: +5,1% yoy.
Spreads up
The Italian secondary closes in red. The spread rose to 170 basis points, with a 10-year BTP rate of +1,93% and a Bund of the same duration of +1,24%.
In the meantime, good demand was recorded on the primary market and the yield on the rise for the Short Term BTP assigned today in the Treasury auction. This is the third tranche of the BTP maturing on 29/11/2023 for an amount of 3 billion euro against a demand that has reached 4,752 billion euro. The supply-demand ratio settled at 1,58 while the yield climbed 27 cents to 0,14 percent. The auction regulation falls on March 1st.
The euro-dollar exchange rate showed little movement, showing a cross around 1,132.
