La Befana swept the optimism out of the market enclosures. The spark of the downturn was ignited by the publication of the minutes of the Fed at the December meeting, from which it emerges that the members of the central bank are aiming not only for an end to the stimuli introduced to limit the effects of the pandemic, but there is open talk of a rise in interest rates "earlier and faster" than expected to combat the gallop of inflation and promote a stable economic recovery. The minutes of the central bank hint at the possibility of a more aggressive tightening than expected, followed "shortly after" by the start of the reduction of the Fed's balance sheet.
THE FED ADVANCES THE BUDGET TIGHTENING TO THE SUMMER
Futures on rate movements give an 80% probability of an increase as early as March, which means that the reduction of the balance sheet, which has reached $8.300 trillion, could begin before the summer. The market response was immediate.
The Nasdaq (-3,34%) suffered its largest daily drop in nearly a year. Under fire, in particular, Nvidia (-5,7%) and Tesla (-5,3%). The bad interest rates also affected the Dow Jones, down by 1,1% after two rising sessions. S&P500 -1,9%.
Meta, the new company of Mark Zuckerberg, has canceled the project of an operating system in Virtual Reality and Augmented Reality on which a team of three hundred people had been working since 2017.
T-BOND YIELDS JUMP TO 1,71%
US yields soared once again overnight, putting pressure on the futures market. Nasdaq derivatives are down 0,70%, those of the S&P 500 are down 0,40%. Dow Jones futures are down 0,25%.
The 1,71-year Treasury Note yielded 2021%, a level not seen since April 2022, when the market was thinking, as it is today, of four increases in the cost of money during XNUMX.
ASIA IN DEEP RED, EVERGRANDE CALLS CREDITORS
The storm continued into Asia this morning. Tokyo's Nikkei loses 2,7%. The yen appreciates again: the dollar-yen cross is down by 0,2%, to 115,6, close to the highs of the last five years reached at the beginning of the week. Sydney's S&P ASX closed down 2,7%.
CSI 300 of the Shanghai and Shenzen price lists -0,9%. Hong Kong's Hang Seng -0,3%. Kospi of Seoul -0,7%.
The Hang Seng Tech index, which includes the most important names in Chinese high tech, fell by 0,2%, after an upward start to the session. Alibaba gains nearly 4%. JD.com +2%.
China Evergrande is up 0,6%. Reuters reported tonight that the overleveraged real estate company has called its local currency creditors this week: the meeting should discuss a six-month extension on coupon payments and some bond recalls.
REVOLT IN KAZAHKSTAN, THE RUBLE SUFFERS. NEW TURKISH THINGS
A mixed start also for the European stock exchanges. While awaiting data on Turkey's currency balance after the bloodletting imposed by Erdogan to defend the lira against the dollar, an eastern front is opening up. The ruble weakens, also as a result of the news arriving from Kazakhstan: a crowd enraged by the exponential increase in energy prices has stormed and occupied the buildings of government institutions: the president of the republic has asked the countries for help neighbors. A coalition led by Russia has said it will respond to the call. The Russian agency Interfax reports that dozens of victims have been killed in the ongoing clashes in the capital.
OIL AND GOLD DOWN. BITCOIN CRASHES
Oil, meanwhile, is faltering; WTI is down 1% to $77 a barrel. Brent -1% at 80 dollars.
Gold is also taking a step back, at 1.803 dollars an ounce, a sign that the market, at the moment, is looking more at rate hikes than at the long-term threat of inflation.
The propensity for risk deflates and it is bitcoin that pays the price, yesterday down by 5,7%, this morning the most traded cryptocurrency marks a drop of 1% to 43.111 dollars.
ITALY, INFLATION RISES TO +3,9%
And three. Piazza Affari extends the positive series from the beginning of 2022. The increase in the cost of living, in line with the forecasts, as well as the trend of infections, which are close to 190 thousand, are not scary. Inflation, driven by energy, recorded an increase of 0,5% on a monthly basis, to +3,9% (from +3,7% in the previous month), slightly above analysts' estimates. The rate, year on year, is the highest figure since August 2008, when inflation was +4,1%. In 2021, after the decline in 2020 (-0,2%), consumer prices return to growth on average for the year (+1,9%), recording the largest increase since 2012.
THE NEW BTP 30 ATTRACTS 55 BILLION APPLICATIONS
The increase does not frighten investors, who absorbed the launch of the new 30-year bond with orders exceeding 55 billion (maturity September 2052). Requests include €2,75 billion from joint lead managers. The amount of the securities offer is equal to 7 billion euro. The spread is set at +6 basis points on the thirty-year bond maturing in September 2051. The first short coupon on March 2022, XNUMX. The ministry had yesterday announced that it had entrusted Barclays Bank Ireland, Bnp Paribas, Deutsche Bank, Intesa Sanpaolo and JP Morgan with the mandate for placement.
TEN-YEAR AT 1,24%, THE SPREAD RISES TO 136
The ten-year rate stands at 1,24%, compared to 1,22% at the previous close. The rate on the 30-year segment is 2,11%, the highest since May, from 2,07% recorded yesterday in the final session. The spread on the Bund on the ten-year stretch widens to 136 basis points from 133 yesterday.
Slovenia has also entered the market with a syndicate, placing 1,75 billion euros in 4 and 40-year bonds against a demand of 6,6 billion. Spain raised 5,68 billion euros in Bonos and Germany 3,13 billion in the new XNUMX-year Bund.
RECORD BUSINESS PLACE, THREE RAISES IN A ROW
At the end of the day, the Ftse Mib marks a progress of 0,74%, to 28.162 points, a new record since February 2008.
In the rest of Europe: Frankfurt +0,7%; Paris +0,81%; Madrid -0,03%; London +0,14%. In red Amsterdam (-0,44%).
RENAULT RUNS AS A QUALCOMM ALLIED
The rally in the auto sector continues. Renault runs (+5,31%) after the signing of a chip supply agreement signed with the American Qualcomm.
BMW rises by 2,18% after record sales (2,2 million units) in 2021. The Munich group has also announced that it has developed a battery lasting a thousand hours.
Returning to Paris, the possible agreement between Carrefour (+5,09%) and the Auchan group is once again topical.
PIRELLI SGOMMA AT THE TOP OF MILAN THANKS TO JP MORGAN
The auto sector is also accelerating in Milan. The best stock is Pirelli (+5,25% at 6,5 euros), which has grown by 50% over the last 12 months. The Bicocca house, now Chinese-owned, benefited from the positive opinion of JP Morgan analysts, who raised the target price from 5,6 to 7,5 euros. In a report on the European auto sector, experts give their preference to stocks of tire manufacturers, promoting the improvement of the financial profile: EPS (earnings per share) estimates are improved by 1,4% for the current year and 1,7% for the next.
THE STELLANTIS-AMAZON AXIS FOR THE FUTURE CAR IS BORN
After the flop on its debut, the recovery of Iveco continues (+6,2%). Stellantis runs (+4%) after signing a series of global and multi-year agreements with Amazon that will transform the driving experience for millions of customers. In particular, new software capable of accelerating the process of transforming the company into a sustainable mobility operator will be developed.
CNH SLOWS DOWN, THE AGNELLI CLAN LEAVES SESTRIERE
Instead, Cnh Industrial slowed down (-1,1%), despite Fitch having raised its rating by two levels to BBB+ and Banca Akros having increased its target price from 16,5 to 18 euros. The American company Nikola, in which Iveco has a substantial stake, has sold 10 electric-powered trucks to logistics operator USA Truck.
Also in the Agnelli house, there is the transfer to the English fund Icon of the "Via Lattea", one of the most famous ski areas in the world, opened by Edoardo Agnelli 75 years ago, which allows you to ski from Sauze d'Oulx to Clavière passing through the Sestrière.
FINANCIAL SECTORS RUN, UTILITIES DOWN
The favorable financial season continues: Unipol +1,98%, Finecobank +1,46%, Nexi +1,85% and Banco Bpm +1,13%.
The increases in oil prices favor Eni (+1,16%).
TOWARDS A NEW SHOWDOWN IN TELECOM
Purchases are concentrated on Telecom (+2,7%): the board meeting at the end of January could represent a significant step both for the industrial plan and for the offer of Kkr, which could count, according to rumors, on the two main Italian banking groups (Unicredit and Intesa Sanpaolo).
The declines mainly affect utilities: A2a -10,8%; Terna -0,84%; Hera -0,79%; Enel -0,72%; Italgas -0,56%.
Also in the red were Campari (-0,74%), Generali (-0,58%), Inwit (-0,52%) and Atlantia (-0,2%).
INTESA PROMOTES ARISTON SHARE TO BUY
Ariston +1,51%; Intesa San Paolo has started hedging the security with a buy rating. Witt continued in the rally on the eve (+5,44%) with an increase of 4,53%.
