THE BAGS BET ON THE OPTIMISM OF THE WILL
MILAN RECOVERS IN WAITING FOR THE EUROPEAN WEEKEND
The optimism on the agreement at the European level which allowed Wall Street to rebound in the final yesterday is confirmed by the Old Continent's price lists. Milan, yesterday the worst market, made the greatest progress: the FtseMib index rose by 1,15% to 15.861, driven by the strong recoveries of the banks, yesterday harassed by sales. Frankfurt +0,6%, London +0,8%, Paris +0,7%, Madrid +1,5%. The markets thus reacted to the joint Franco-German note from Thursday evening: the "global and ambitious" agreement worth 940 billion (440 from the bailout fund, the rest in 2012 thanks to the stability mechanism) is possible.
According to a German government spokesman, the summit of heads of state will take place in two phases, Sunday and Wednesday, because full agreement on some details has not been found. The decisions will be communicated only on Wednesday. The markets are indifferent to the Ifo index released in the morning on the confidence climate of German entrepreneurs in October, down for the fourth consecutive month. Not even S&P's warnings have scared investors: just now the rating agency S&P's said it could downgrade the sovereign ratings of five eurozone issuers (France, Spain, Italy, Ireland and Portugal) by a notch or two if the economy of the seventeen slipped into recession and further increased the cost of public funding. The euro is stable against the dollar at 1,3774.
BANKS RECOVER HALF OF LOST LAND
BUT THE SPREAD WITH THE BUND REMAINS NEAR 400 BP
However, the bond market is not improving: the Btp/Bund spread jumped yesterday to 400 points (yield of the Btp at 6%) remains in the risk zone: ten-year Btp at 5,97%, the spread at 397 basis points. On the other hand, banks are running (the Stoxx sector index marks +2,1%) followed by insurance companies +1,7% and cars +1,2%. Industrials also recovered: Fiat +1,7%, Fiat Industrial +1,6%, Pirelli +0,7%. Prysmian +2,6% and Finmeccanica +1,8% improve. Unicredit +5,5%, Intesa +5,2%, Monte Paschi +4,4% and Banco Popolare +3,4% rose in Milan. Generali (+1,3%) and Fondiaria Sai (+2,5%) also performed well. After the discovery of the large gas field in Mozambique by Eni (+0,2%). Nomura has started hedging with a buy recommendation and a target price of 20 euros. Among the minor stocks, Pierrel is suspended due to excessive increases with a theoretical +11%. The Libya effect is still valid: Maire Tecnimont +2,5%, Saras +1,4%.
