The economy still needs support. Or maybe not? The confrontation between penalty takers and doves will be held at the European Council scheduled for today and tomorrow. But doubts about the effectiveness of the ultra-expansive policy are starting to make themselves felt in the circles that matter: the economy is resting on subsidies without reawakening the desire for business, as evidenced by the low demand for liquidity. The Financial Times calculates that the Fed has so far used only 4% of its firepower, made up of 11 credit lines totaling $2.600 trillion. And Tesla stands out on the Wall Street stage, supported by the purchases (and sales) of tens of thousands of small speculators who invest part of the subsidies (about 2 dollars a month) on the stock exchange, while the recovery stalls. Everywhere, after the first aid stage (but in the US the epidemic sets new records) governments and markets are trying to give continuity to the way out of the emergency. Today Europe is trying, which, surprisingly, has come out of Covid-19 better than the others.
CHINA DOWN. BOFA HAVES PROFITS
Flat this morning Tokyo, the other stock exchanges contrasted: Shanghai down slightly, both Hong Kong's Hang Seng and Taipei's Taiex up. India opened positively (+0,4%). The weekly balance is very negative for Shanghai (-5,6% after last month's excesses) and for Hong Kong (-2,5%), but positive for Tokyo's Nikkei (+2%) and for the Kospi of Seoul (+2,5%).
Contrasted also in US markets: Dow Jones -0,5% after four upward sessions, S&P 500 -0,34%, Nasdaq -0,7%.
Bank of America cut second-quarter earnings in half, having to set aside $5 billion to cover potential credit losses. Net income attributable to shareholders fell to 3,28 billion. Morgan Stanley beats expectations and closes the second quarter with a net profit of 3,2 billion dollars.
Heavy crash, with closed markets, by Netflix (-10%), causing lower profitability than expected. But the platform added 10 million new subscribers in the quarter (versus 7,5 expected).
FAKE PROFILES ON TWITTER, RUSSIAN SPIES ABOUT COVID-19
They make themselves heard again fake news: Twitter drops 1,1% after fake tweets from famous people were published, including Democratic candidate Joe Biden. Several countries accuse Russia of attempts to steal vaccine research.
Yesterday the Wall Street Journal wrote that the White House is preparing to ban members of the Communist Party of China from entering the United States, but tonight Bloomberg reports that Donald Trump would have blocked the measure.
ECB CONFIRMS PEPP PURCHASES
Thus Europe remains at the center of the scene. Yesterday the European Central Bank left the cost of money unchanged, as expected, and confirmed the securities purchase plan (PEPP) to support the economy. The reference rate remains at zero, the deposit rate remains at -0,50% and the marginal lending rate at 0,25%. The ECB will continue its debt purchases with the PEPP program "at least until June 2021", said Christine Lagarde, explaining that the Eurozone "still needs ample monetary stimulus." For this reason, the president of the ECB has sided in favor of the launch of the 750 billion Recovery Fund, today and tomorrow at the center of the European Council, the first "physical" meeting between European premiers since the outbreak of the pandemic. It will be a long and complex negotiation, judging by the distances on the eve. The Dutchman Mark Rutte insists on a unanimous vote, an "unacceptable" solution for Giuseppe Conte who received the support of Emmanuel Macron yesterday. The size of the fund and its composition are also under discussion. In short, the positive outcome is far from obvious. Perhaps an encore summit will be needed.
MILAN AT THE HIGHEST FOR 4 WEEKS
The European stock exchanges were weak yesterday, with the exception of Piazza Affari (+0,37 to 20,356 points), at their highest for four weeks.
The other listings were in the red on the wave of Wall Street's sales in the technology sector: Frankfurt dropped 0,5%; Paris -0,46%; Madrid -0,15%; London -0,64%; Zurich -0,36%.
The Wirecard scandal widens: CEO Markus Braun withdrew 35 million from the bank's coffers. The EU authorities are investigating the sensational holes in German supervision.
SALES HALVED FOR RICHEMONT (-5,25%)
The collapse of the hard luxury flagship, the Geneva-based Richemont, Cartier's parent company, is causing a sensation, leaving 5,25% on the ground after reporting quarterly sales almost halved and not providing details on the current trend of the business or on the 'future outlook.
The effects of the crisis are also being felt on French groups: Lvmh -1,3%, Kering -2,3%. Moncler suffers in Piazza Affari (-1,7%).
Heineken's profits also fell (-2,9% in Amsterdam), held back by the closure of the premises.
BTPs FALL TO 1,17%, LOWEST SINCE MARCH 11TH
Lagarde's words heartened the Italian secondary market. The spread contracted to 163 basis points and the yield of the Italian benchmark fell to 1,17%; it hadn't been this low since March 11th.
TIM (+4,4%) ASSAULTS OÌ IN BRAZIL
Tim's star shone in Piazza Affari (+4,4%). The board of directors has mandated CEO Luigi Gubitosi to present an offer on the Brazilian Oì, as already aired in March, before the pandemic. The minimum value for the mobile business in which the Carioca subsidiary of the Italian group is interested was set by the South American group at 15 billion Brazilian reals (around 2,5 billion euros). The offer comes at a moment of grace for the Brazilian stock exchange, despite the violence of the pandemic in the country. The rebound from March is 65% Tim Participacoes yesterday instructed the investment banking division of UBS to seek partners to finance the fiber optic network in Brazil.
Atlantia slows down (-5,24%) after the exploit following the agreement on Aspi. Among the industrialists, Fiat Chrysler +1,14%: the company that will be born from the marriage with Psa will be called Stellantis. Exor -1,03%.
SNAM AT 49% IN ABU DHABI GAS
The increase in oil and utilities supported the index. Saipem shines (+2,06%) ahead of Tenaris (+1,37%). Eni +0,67%.
In evidence Snam (+1,24%), after the consortium made up of the same company and the investment funds Global Infrastructure Partners (GIP), Brookfield Asset Management, Gic (the sovereign wealth fund of Singapore), Ontario Teachers' Pension Plan and NH Investment & Securities, completed the acquisition of 49% of Adnoc Gas Pipeline Assets from The Abu Dhabi National Oil Company.
Earnings also for A2A (+1,38%) and Hera (+1,67%).
ANTITRUST GLANCE FOR OPS INTESA/UBI
Banks on the rise. Intesa +1,38% and Ubi +1,54%: while adhesions to the Ops rise to 3,106%. The Antitrust has given its approval to the operation of control of the bank headed by Victor Massiah. “This decision – commented the CEO of Intesa, Carlo Messina – guarantees the birth of a project which has among its objectives the creation of a group at the top of the European banking sector, at the same time strengthening the domestic context”.
MPS RUNS, BANCA IFIS ENTERS GERMANY
Mps +2,6%: rumors about the next choice of an advisor to search for a partner for a merger are growing.
Leap of Banca Ifis (+5,77%), which entered the German savings market thanks to the signing of a partnership agreement with the European fintech Raisin. Banca Popolare di Sondrio also stood out +3,24%, after the European Court of Justice promoted the reform of cooperative banks launched by Matteo Renzi's government.
SAFILO IS RESURRECTING, A BUY FOR PIAGGIO
Safilo raises its head again (+5,12%): the rescue and relaunch of the company is looming thanks to the intervention of the Fulchir family. Piaggio +3,21%: Banca Imi confirmed its buy rating, targeting 2,8 euros, after data from the German two-wheeler market, up 5,5% to 110.800 units since the beginning of the year.
