At the time of the pandemic, the world finds itself poorer, isolated and, for now, powerless to react. In short, all that remains is to raise the drawbridges as was done in the Middle Ages. And the Bear takes possession of the markets: yesterday, after 11 years of growth, the world is officially in recession. And the Stock Exchanges take note of it.
This morning, Tokyo's Nikkei is down 4,41%, Hong Kong's Hang Seng is down 3,8%, the Shanghai Composite is down 1,6%, Seoul's Kospi is down 4%, S&P ASX 200 is down Sydney by 6%.
WALL STREET COLLAPSES, EUROPEAN FUTURES DISRUPT
The situation on Wall Street is no less serious: Dow Jones -5,86%, S&P 500 -4,89%. NASDAQ -4,7%. Markets have lost more than 20% since their highs, thus officially entering a recession.
The trend of futures pending the opening of the session suggests a further deterioration in the lists. Contracts on the Eurostoxx 50, the most representative of the Eurozone, are losing 8,3%. Even the US ones are getting worse.
THE US CLOSES THE BORDER
Donald Trump gave yet another jolt to confidence, who, after days of reckless underestimation of the crisis, made an unprecedented decision: with a live televised speech from the Oval Office of the White House, the president communicated the blockade of all flights from Europe (with the exception of Great Britain) starting tomorrow and for the next 30 days. The president said the US will do everything to "deal with the foreign virus".
On the contrary, they have disappointed the "formidable" economic aid promised by the White House. The president said he has asked Congress to approve a payroll tax relief measure as soon as possible. Meanwhile, the Fed is preparing to cut the money price once again. Too little to stop the descent.
In a few hours, the word will pass to the ECB. Yesterday, while awaiting his moves, Italian banks reacted to the rise after days of passion, bringing the Piazza Affari index into positive territory (+0,33%).
The rest of Europe is in the red: Frankfurt -0,37%; Paris -0,57%; Madrid – 0,33%.
THE FIRST SIZES ARRIVE FROM ITALY AND THE UNITED KINGDOM
The worst Stock Exchange was London (-1,52%). The Bank of England has cut the discount rate from 0,75% to 0,25% and launched a four-year loan plan for businesses. At the same time, the British government announced a £30 billion economic stimulus package.
Even Italy, which from today has adopted even more restrictive measures for social life, has launched a plan of 12 billion euros to be made available immediately, plus another 13 to be withdrawn if necessary. In practice, the government is asking Parliament to be able to resort to debt of up to 20 billion, which could take the deficit beyond the 3% threshold.
Oil drops again: -4% to 34,4 dollars a barrel.
The dollar-yen exchange rate lost 0,5%, to 104. The US currency appreciated against the Korean won and the main currencies of the Asia Pacific area.
THE ECB READY FOR HELICOPTER MONEY
The euro appreciates slightly, at 1,129 against the dollar, awaiting the decisions of the ECB. Christine Lagarde has already anticipated in a teleconference with EU leaders that today the Bank will evaluate the use of all the monetary policy tools at its disposal. The ECB president warned EU leaders that, without coordinated action, Europe will find itself facing a scenario similar to the 2008 financial crisis. But the Old Continent seems ready to move. Angela Merkel has said that Germany is ready to do "whatever is necessary".
TLTRO LOANS AT BARGAIN PRICES
What will the measures be? Christine Lagarde could announce a conventional maneuver on rates, plus an expansion of QE, plus an intervention to be conducted together with the Supervisory Authority inspired by helicopter money. It could be a new TLTRO at rock-bottom costs, indeed, with a super gift: a liquidity offer with a negative spread in the order of 50 basis points, so that the beneficiary (the commercial bank that draws on this resource) is able to reach at -1% spread, against a maximum advantage that today reaches -50 basis points. In short, the ECB is ready to pay the banks a 1% yield, as long as they take the money and transfer it to the system.
Not only businesses should be the recipients of the operation which could also involve households, through the consumer credit channel. There could be a public guarantee, provided by the European Investment Bank. The Supervision of the ECB could temporarily reduce some regulatory obligations on the subject of the regulatory capital of banks.
Meanwhile, the epidemic is raging: there are 10.590 coronavirus patients in Italy, 2.076 more than yesterday, while the total number of infected people, including victims and recovered, has reached 12.462. The data, however, is vitiated by the fact that 600 patients were transmitted one day late. A total of 827 died: compared to Tuesday there are 196 more people.
And the illustrious patients multiply: the quarantine for Juventus and Inter starts after the news that among the infected there is the black and white Daniele Rugani. The NBA is not spared, which closes its doors, as well as Hollywood: among the sick is the wife of Tom Hanks.
THE SPREAD FALLS, THE BTP AUCTION TODAY
A day of strong recoveries yesterday for the BTP, awaiting the Frankfurt measures. The 15-year yield falls by 1,16 basis points to XNUMX%.
German Bund down -0,74%. The spread narrows to 191 basis points from 220 yesterday.
The Treasury yesterday placed all 6,5 billion euro of 12-month Treasuries with yields rising to the highest since August.
Today is the turn of the medium-long auction in which up to 7 billion will be made available to investors in the new 3-year BTP and in the reopening of 7, 10 and 20-year bonds.
CEDOLA AND BRAZIL GIVE TELECOM WINGS
The expectation of a maneuver by the ECB to help the banks has allowed a rebound in the sector, starting with the most targeted securities. Banco Bpm was thus the best blue chip with an increase of 7%. The Bigs also run; Entente +4,12%, Unicredit +2,72%.
However, it was Tim's day (+4%), who presented the 2019 data and the new industrial plan. Thanks to the robust cash flows of the last months of the year, the company has decided to return to pay the dividend ordinary. But the increase was also supported by the announcement that Telefonica Brasil and Tim Participações have expressed interest in negotiating a joint offer to acquire the mobile network of the bankrupt Brazilian operator Oi.
Positive industry sector: FCA up 2%, Pirelli up 3,1%. Ferrari (+2,91%) was promoted to buy by HSBC.
DIASORIN AND FINCANTIERI ADVANCE
Diasorin's flight continues (+8,24%). The CEO Carlo Rosa said that the potential for the business of the molecular test for the rapid identification of the coronavirus is equal to 5-10 million euros per month.
Among the best also Fincantieri (+5,5%). The EU will make a decision on the offer for Chantiers de l'Atlantique by the end of April, explained the number one of the European Antitrust.
Analysts promoted Terna's plan (+2,21%): Banca Akros and Banca Imi raised their opinion on the stock to accumulated and add respectively.
Among the negative notes, Atlantia, down by 4%, returns to levels it hasn't seen since 2013. Contrasted with luxury. Salvatore Ferragamo +1,2%. Under pressure Moncler, which drops by 2,59%.
