The relief rally triggered by the US-China truce has already lost some of its momentum. Asian stock markets are down this morning, while calls for prudence from the big names in finance are multiplying in view of a 2019 that is mixed, as indicated by the drop in government bond yields and the flattening of the interest rate curve. The 2,95-year yield in the United States fell to 13%, its lowest in the last two and a half months, the spread between the two-year and 2007-year yields fell to 3 basis points, the lowest since 5. Meanwhile, the curve between XNUMX and XNUMX year bonds, confirming that operators are taking refuge in the safe haven of bonds rather than the next Christmas rally.
But the clouds, for now, have been driven back by the truce between Donald Trump and Xi Jingping, blessed by the uptick in Wall Street of cars and technology, while the yuan rears its head. The Eurozone could be added to the appeal if the mine of the Italian maneuver and of Brexit were defused. The spotlights, however, in recent days are focused on Vienna, theater on Thursday of the OPEC assembly, the last one in which Qatar will participate, which has announced its exit from the cartel under the control of the "enemies" of Saudi Arabia. Brent crude closed up 5% last night, trading at $62,4 a barrel this morning (+1%).
FLY THE YUAN. CHINESE BONDS, WHAT A DEAL
Caution prevails on Asian stocks after yesterday's jump. After seven consecutive days of rising, the Japanese Stock Exchange goes down: Nikkei -1,7%. The stock markets of China also declined slightly (Hong Kong -0,3%, Shanghai -0,1%).
The recovery of the Chinese currency continues with great vigor: between yesterday and today, the dollar-yuan cross lost almost 2%, to 6,84, such a large change in two days has not occurred for eleven years.
The race for Beijing's government bonds is accentuated: the 3,33-year yield has fallen to XNUMX%.
APPLE AND BOEING BOUNCE
Yesterday Wall Street was in great turmoil supported by the rally of the stocks most linked to exports (Boeing +3,8%, Caterpillar +2,4%) and the rebound of Apple (+3,8%), after the narrow escape (for now ) danger of tariffs on the iPhone made in China.
Increases of more than one percentage point for the main indices: Dow Jones +1,13%, S&P 500 +1,09%. Nasdaq gains 1,51%.
From the Guinness Book of Records the leap of Tesaro, a specialist in anticancer products, by 58,5% after the purchase by Glaxo.
The energy sector also stood out (+2,3%). At Piazza Affari Eni +2,2%, Saipem +6% and Tenaris +3,6%.
BUENOS AIRES AND PEACE WITH BRUSSELS PUSH MILAN
This morning the euro appreciates at 1,137 against the dollar in the expectation of a positive evolution of the hottest dossiers: in London, where the parliamentary debate on Brexit begins today, Theresa May's scans are growing for bookmakers. In Brussels, Ecofin measures the intentions of the Italian government to reach an agreement with Brussels on the manoeuvre.
Meanwhile, the Buenos Aires effect has galvanized the stock exchanges of the Old Continent more than Wall Street itself. The truce on duties is destined to favor the economies most devoted to exports, starting with the German locomotive. Even Piazza Affari took off despite macro indications that were anything but reassuring: the PMI index on the expectations of purchasing managers of manufacturing companies fell in November for the fifth consecutive month, the drop to 48,6 points, from 49,2 Oct. XNUMX was heavier than forecast.
BUT GOLDMAN SACHS SEES RECESSION
Goldman Sachs' “prophecies” for next year are even sadder: the broker foresees a descent into recession for the Bel Paese. "On the budget package - we read - things could get worse before we see an improvement". Italian growth? Only 0,6%. But the key question, continues the report, "is how much pressure will be needed to induce a political backtrack". The times are not yet ripe, judging by the previous ones: in Portugal the turning point came after the spread exceeded 400 basis points.
Milan, regardless of these signs, is once again the queen of price lists. With a leap of 2,26%, Piazza Affari closed at 19.622 points. The start of the general discussion on the budget law has been postponed to Wednesday.
All European lists closed in positive territory: Frankfurt +1,88%; Paris +1%; Madrid +1,16%; London +1,23%.
SPREAD FALLS, TREASURE IN MOVEMENT WITHIN THE YEAR
While awaiting enlightenment on the Eurogroup meeting, the Italian bond market bet on a possible compromise between Rome and Brussels on a reduction of the deficit/GDP target envisaged in next year's Italian budget law.
The spread between 280-year BTPs and Bunds fell in the session to 11 basis points, XNUMX bps below Friday's closing level, to then widen marginally in the final.
The ECB will reduce Italy's incidence within the Eurosystem to 11,8%, from the current 12,31%. The new quotas will enter into force from 1 January 2019. The decision depends on the five-year adjustment in relation to the data relating to the population and the GDP of each individual country provided by the European Commission.
The Italian Treasury is considering carrying out government bond repurchase or exchange operations by the end of the year to reduce the peak maturities of 2019, among which September stands out, when securities for over 40 billion will have to be repaid.
Next year the Treasury will have to refinance bonds for 400 billion.
BANCO BPM STRENGTHENS THE AXIS WITH CREIT AGRICOLE
Bank stocks are prominently displayed in Piazza Affari. Banco Bpm leads the race (+6,29%), rewarded by the buy rating from Ubs, Deutsche Bank and Equita Sim (target at 2,90 from 2,40). There are two significant changes: the strengthening of the partnership with Crédit Agricole in consumer credit (positive effect of 80 points on the capital ratios); the negotiations for the sale of non-performing loans for 7,8 billion.
NPL, INTESA RATIFIES AGREEMENT WITH INTRUM
Also in evidence was Intesa San Paolo +3,15%. The bank yesterday signed an agreement with Intrum which marks the reduction of around 11 billion euro in the stock of non-performing loans.
The other institutions also toast: Bper +4,61%, Unicredit +3,02%. Splash Mps (+9,94%).
THE MARKET PROMOTES BANCA GENERALI'S TARGETS
Banca Generali up sharply (+4%) which it presented the targets for the two-year period 2019-2021, appreciated by the market. In particular, net funding in 2021 is expected to be equal to or greater than 14 billion euros, with assets around 76-80 billion. The dividend policy was also confirmed with a 70-80% payout (floor in line with the 2017 coupon).
FCA WANTS A US BANK. JEEP AND RAM BOOM
The news that China has agreed to reduce and remove tariffs on cars manufactured in the USA has given wings to Fiat Chrysler (+3,5%), already supported by Fitch's choice to promote the company to investment grade (from BB to BBB-). According to Fidentis analysts, S&P and Moody's could also adopt the same decision. However, the rally was mainly favored by the increase in sales on the US market in November: +17% thanks to the excellent performance of the Jeep and Ram brands, which achieved the best November in history with an increase of 44% to 57.970 vehicles.
In Italy, however, the group recorded a drop in registrations of 9,9% to 35.444 vehicles, but the market share rose to 24,12% from 23,4% in the previous month.
The group has decided to speed up the time to acquire its own banking division in the US. According to Bloomberg, Exeter Finance, a company that offers financial services related to the auto sector, could be acquired, or the option on Chrysler Capital managed by Bance de Santander could be exercised. The landing in US finance, approved by Mediobanca, will involve the disbursement of one billion dollars.
The truce on tariffs also galvanized CNH Industrial +6,4% and other automotive stocks, such as Brembo and Pirelli, both +3,6%, and Ferrari +1,7%, as well as tech stocks: Stm +6,02% , Prysmian +5,1%. Leonardo rises by 2,66%.
D'AMICO IN THE RALLY, PARMALAT SAYS FAREWELL TO THE STOCK EXCHANGE
The only stocks to close negatively on the main basket were Tim (-0,03%) and Atlantia (-0,94%).
Of note in the rest of the D'Amico list (+14,39%): Kepler Cheuvreux has raised the recommendation from hold to buy, with the target price rising from 0,11 to 0,2 euros.
Parmalat is preparing to leave the Stock Exchange. Sofil, the holding company controlled by Lactalis, took over 6,175% of the capital thus rising to 95,8% and announced that it "does not intend to proceed with the restoration of a free float sufficient to ensure the regular trading of ordinary shares".
