Trumpeachments. Let's get used to the latest neologism coined in a bizarre season, full of surprises and twists that are difficult to predict. The only certain thing is that times are not easy for presidents: after Trump, Michel Temer, the conservative who took over from Dijlma Rousseff a few months ago, was targeted for bribes. And so the Bear set course for San Paulo.
In the meantime, a timid reaction has set in motion on Wall Street: the clash between the President and the Democrats promises to be long and exhausting, without decisive knockout blows. Once the expectations of new leaps forward have been reduced, operators proceed at a slow trot, reassured by the words of US Treasury Secretary Stephen Mnuchin: "A 3% growth target is achievable". After all, the US market, even before the latest twists and turns, was showing signs of fatigue: a modest decline, in these conditions, is okay.
Different speech for Europe. "The crisis is over", said the president of the ECB, Mario Draghi yesterday, receiving an honorary degree from Tel Aviv University. Domestic demand “supported by the ECB's monetary policy – he continued – is the main engine of the recovery. Five million people have found work since 2013 and unemployment, while still high, is at a new eight-year low. But to continue, notes Alessandro Fugnoli, "the European recovery needs an America that is at least stable, even if it has good reasons for the rise".
ASIA LITTLE MOVED, WEEK IN RED FOR TOKYO
Asian stock exchanges moved little this morning. Tokyo's Nikkei index is about to close on parity, the week ending with a drop of 1,5%. Hong Kong rises by 0,3%, Shanghai -0,1%. Up 0,8% on the Indian Stock Exchange, the BSE Sensex index, at these levels, would close the week with a rise of 1,7%, but due to the devaluation of the rupee, the weekly balance in euros is negative , -0,7%
TECH GUIDES THE RECOVERY. RECORD ACCOUNTS FOR WAL-MART
The US Justice Department's decision to entrust Robert Mueller, former head of the FBI, with the task of investigating Russiagate with full powers has unleashed the president's wrath, who spoke of an "unprecedented witch hunt", but reassured the US Stock Exchanges, which partially sterilized the effect of the crisis.
Wall Street indices rallied a few positions after Wednesday's drop, the worst session in eight months. The Dow Jones closed with a gain of 0,27%, S&P +0,37%.
The recovery of tech stocks contributed to the rebound of the Nasdaq (+0,73%): Apple +1,5%, Amazon +1,5%, Facebook +1,9%, despite the 110 million euro fine imposed by the EU Commission.
The dollar regained ground against the euro to 1,110, from 1,115 last night.
The Federal Reserve seems intent on going straight on with interest rate hikes: Fed member Loretta Mester, avoiding references to the ongoing clash between institutional powers, yesterday underlined the "very good" economic conditions and the need to take the measures to counter the resumption of inflation.
The good performance of Wal-Mart (+3,2%) stands out in the list after better-than-expected accounts. The black jersey goes to Cisco (-7,2%): forecasts on sales for the next quarters are disappointing.
STABLE OIL. THE ENI-ROSNEFT AXIS TAKES OFF
Oil stable on the eve of President Trump's visit to Saudi Arabia. The spotlights are focused on the forthcoming OPEC summit on May 25, in which production cuts will be decided. WTI crude advanced by 28 cents and 49,35 dollars a barrel, Brent traded at 52,6 dollars a barrel (+0,7%).
Eni rises +0,2% in Piazza Affari. Igor Sechin, CEO of Rosneft, expects to start drilling in the Black Sea this year with the Italian company. Negative closure for Saipem (-1,5%) and Tenaris (+0,8%).
THE CARIOCA STOCK SHAKES -8,8%. TEMER: "I'M NOT LEAVING"
For the financial markets, the tragedy of the day was the collapse of the Brazilian Stock Exchange. Some entrepreneurs have handed over to the magistrates incriminating tapes on President Michel Temer, who allegedly authorized the payment of bribes to the former president of deputies, Eduardo Cunha, to buy his silence on the bribes of Petrobras, the Brazilian energy giant. Temer has already announced that he does not intend to resign.
The scandal found the market completely unprepared. The reforms undertaken by the President had attracted large flows and, yesterday, the Bovespa was up 12% since the beginning of the year (one of the best exchanges), the Real was up 6% and the credit default swap was down 80 basis points. The numbers at the end of the European session give the dimension of the shock: Bovespa -9,5%, Real -6,5%, and the CDS (the default risk hedging price) shot up to 270, +65 points. Banco Bradesco and Banco Itau collapsed on the list, down by more than 15%.
The crisis on the Brazilian Stock Exchange made itself felt on Telecom Italia (-2,6%). Tim Brasil is worth about a quarter of the market capitalization of the group led by Flavio Cattaneo. Prysmian is down among the stocks most closely linked to the Brazilian market (-1%).
EU INVESTIGATION PUTS FCA UNDER PRESSURE
The turbulence on the Carioca market also contributed to complicating the session of Fiat Chrysler (-3,1%), the leader on the Brazilian market, already grappling with the decision of the EU Commission to initiate proceedings against Italy, accused of not having duly checked the regularity of the emissions of the diesel engines of the group.
The Minister of Economic Development Carlo Calenda declared: "It is very important that the European Commission at a certain point say a clear word on this, because this thing also has an impact on the group's listing".
Furthermore, FCA's attempt to reach an agreement with the US environmental agency, EPA, to avoid a fine against the car manufacturer seems to have failed.
MARKET PLACE RECOVERS FIRST
The icy winds of Russiagate weakened the European squares, which all recorded a negative sign. But the recovery of Wall Street suggests a positive start for the European markets, including Piazza Affari.
Milan has already returned yesterday to positive ground. The Ftse Mib index closed substantially on a par (+0,07%), at 21.299, after slipping below 20.700 in the morning.
However, the recovery attempt failed for the other continental markets: London, -0,89%; Madrid -0,94%; Paris -0,53%; Frankfurt -0,33%.
BTP ITALIA CLOSES WITH 8,6 BILLION, SPREAD AT 180 BP
The eurozone debt market closes higher in the face of weakness in equity markets. The spread on ten-year Italian reference rates (2,155%) over the German one closed in the area of 180 basis points, after reaching 183 basis points.
The yield on the 0,315-year Bund fell to a two-week low of 1,517%. Also down were the ten-year Spanish rate (to a four-month low at 0,705), the French one (down to 0,798%), and the Irish one (to XNUMX%).
The rise of the BTP was limited by the assignment of the new BTP Italia, in May 2023, placed by the Treasury to institutional investors for the sum of 5,4 billion euros, which adds up to the approximately 3,19 of the offer at the retail public, for a total amount 1 of the issue of approximately 8,59 billion.
The institutional offer recorded orders for approximately 7,04 billion; the Treasury therefore applied a distribution on the requests received of approximately 76,7%.
KIDNEY STROKE FOR GENERALI IN VIEW OF THE COUPON
The recovery of the Italian Stock Exchange was helped by Generali's final backlash, which recovered beyond an initial point of loss and ended the session with a gain of 1%. Mediobanca cut the rating to Neutral, from the previous Buy, the target price is 16 euros. The stock has gained 5% since the beginning of the year. On May 22nd, a dividend of 0,80 euro per share (5,4% yield) will be released.
On Unipol (-0,4%) Mediobanca Securities lowered the recommendation to neutral from outperform with the target price remaining set at €4,3.
FLY BENCH BPM. THE NEW UNICREDIT MEMBERSHIP MAP IS RELEASED
The banking sector was positive: the sector index +0,4%. New difficulties in the negotiations with the European Commission on the rescue of the Veneto banks. Brussels has asked for an extra billion to give the green light to state intervention. The problem is that it will have to be contributions paid by private individuals, and not public ones. Only after the arrival of non-public fresh capital will the precautionary recapitalization governed by the Save Savings law be able to start with its 20 billion budget.
Banco Bpm still rallying (+2,5%). Fineco Bank is also in evidence (+2%). Bper fell sharply (-2,3%). Intesa finished the session down by 0,4%. Barclays promoted Unicredit (+0,5%) by raising the target price to 17 euros, from 16 euros, and confirming the Equal Weight recommendation.
In the meantime, the renewed framework of the main shareholders is outlined, after the conclusion of the 13 billion euro capital increase. Based on communications released after the shareholders' meeting of 20 April, Unicredit's top shareholder is Capital Research and Management with 5,07%, followed by Aabar, the Abu Dhabi sovereign wealth fund, with 5,03%. As of March 2, BlackRock was credited with a 4,8%.
Central Bank of Libya diluted its stake to 0,82%. Leonardo Del Vecchio and Allianz kept their shares substantially unchanged at 1,93% and 1,01% respectively. The two main shareholder foundations, Cariverona and Crt are diluted at 1,8% and 1,74% respectively. On 20 April, the world of foundations was present at the meeting with a share of around 4,7%.
FINAL GROWING FOR FINCANTIERI AND YOOX
Enel eliminated its losses closing up 0,2%, Atlantia -0,3%. Yoox (+1,6%), Moncler (+0,8%) and Luxottica (+1%) advance in luxury. Fincantieri rebounds (+5,83%).
