Falling trades, volatility at the top. It will certainly not be a New Year's Eve of fireworks for the financial markets, in search of shelter rather than adventures.
With a final leap, Wall Street limited the losses of an unmemorable 2018. Yesterday, for the second day in a row, US stock markets closed in positive ground, but the performance of the session, which started in the deep red for then reset the initial losses, confirmed the state of uncertainty that dominates the most important financial center, stressed among other things by the conflict between Donald Trump and Congress, divided by the wall that the President wants to erect on the border with Mexico.
The US stock exchanges thus give the impression of wanting to close as soon as possible a mixed and difficult season, dominated by geopolitical stress and by the conflicts between the White House and the Fed. The spotlights are already on the first appointment of 2019: January 4 will speak the president of the central bank, Jerome Powell. This could be the right occasion to reassure the markets on the evolution of interest rates.
In the meantime, for the Eurozone, a muted end of the year is looming, a sad setting for the latest purchase operations of Quantitative Easing, which is about to close its doors with a balance that is undoubtedly positive but without having achieved its objective recovery, especially in southern Europe.
ASIA: INDIA ONLY BRINDA, CHINA -25%
Here is the map of the price lists awaiting the final balance sheets, almost all in red.
The Japanese Stock Exchange is starting to close down by 0,3%: 2018 closed with a drop of 12% (in local currency).
The CSI 300 index of the Shanghai and Shenzhen stock exchanges gains 0,3%; 2018 should end with a 25% drop. The Hong Kong Stock Exchange is on parity, while the annual balance is negative (-10,4%). Seoul is up 0,8%; closed the year with a drop of 17%.
Only the BSE Sensex index of Mumbai has recorded a 6% increase since the beginning of the year (+1% today).
The Morgan Stanley Capital Index Asia Pacific, which does not include Japan, is about to end the year down 17%.
USA AT THE GRACE OF VOLATILITY, JUMPS OF 5% FOR APPLE AND MICROSOFT
Yesterday's tearing trend of Wall Street, which experienced a crazy session: departure in deep red, final in positive ground. The Dow Jones (+1,14%) gained another 260 points after the abundant thousand on the eve. But the index is starting to record the highest loss since 2008. Same script for the S&P 500, +0,88% in closing thanks to a formidable rebound (+3,8%) from the lows of the day. The Nasdaq is also on positive ground (+0,38%).
We need to go back to 2011 to find such a profound reversal in one session. Giants the size of Microsoft, Apple and Amazon suffered falls of between 4 and 5% before recovering into positive ground.
The 3-year T bond rises by 2,773 points to 2,720%, recovering from the low since February (XNUMX%) reached at the beginning of the week.
The dollar weakens: this morning the euro-dollar was at 1,145 (+0,2%), yesterday +0,7%.
The oil market is also volatile, reflecting the uncertain demand of the economies. Brent closed down 4,3% to 52,2 dollars but this morning the barrel gained 2% to 53,2 dollars.
FRANKFURT LIGHT UP, FOLLOWING PLACE OF BUSINESS
In Europe, the Frankfurt Stock Exchange (-2,37%) suffered the most (-1,8%), also slowed down by sales in the auto sector and by news on the Chinese economy: industrial profits -XNUMX%, down for the first time in about three years in November.
Milan suffers, which lost 1,81%, at 18.064 points on volumes just over 2 billion, while the parliamentary process of the Maneuver it gets more chaotic every day. Since the beginning of the year, the main list has been losing 17%. From the point of view of technical analysis the situation is not good. There is a high probability that the 15-point area will be reviewed (based on 2013 and 2016).
Only Paris (-0,6%) limits the damage. Madrid -1,38%; London -1,38%; Zurich -2,46%.
THE ECB: THE ITALIAN ACCOUNTS "ARE PARTICULARLY WORRYING"
The signals coming from the ECB's monthly bulletin also weighed on investors' mood, signaling the level of deviation of the Italian public finances as "particularly worrying", which is causing, among other things, a worsening of the debt prospects of the whole 'Eurozone. This "increases the risk that the countries in question will be forced to tighten their fiscal policies in periods of future economic slowdown".
For now, however, the markets prefer to see the glass half full: after the go-ahead from the European Commission to Italy's budget law, Italian bonds have attracted moderate interest.
THE BTP STRENGTHENS ON THE EVE OF TODAY'S AUCTIONS
The ten-year BTP strengthened to 2,74% yield, from 2,80% at the close, from 2,88%. The spread narrowed to 252 basis points. In the morning it had risen to 267 basis points.
The two billion two-year CTZs auctioned yesterday morning by the Treasury recorded good demand: bid to cover up to 1,78 from 1,56 in the previous auction. The 6,5 billion euro of six-month BOTs were also assigned, albeit at rates rising to 0,215% from 0,163% in November.
Today the auction of five billion euros of five-year and ten-year BTPs is scheduled.
CARIGE SINK, MANAGEMENT WEAK
Among the banks, Unicredit falls by 2,3%. Frédéric Oudéa, CEO of SocGen, has extinguished speculation about a possible marriage between the French and Italian banks. A merger between the two groups “is not conceivable until the banking union is completed. Without the single guarantee on deposits and the European sharing of banking risks, there aren't the conditions to think about mergers between banks in the Eurozone”, declared the manager in an internal meeting with his closest collaborators. According to Bloomberg, Unicredit is looking to sell up to one billion euros of real estate. The bank is working with Cushman & Wakefield on the sale of certain office buildings and bank branches belonging to its HypoVereinsbank unit.
Carige dropped 18,75% at 0,0013 euros, after the shareholders' meeting did not approve the 400 million capital increase. It is increasingly likely that the institution will have to resort to integration with a partner. The market is betting on Ubi (+0,7%). Bper, a candidate for integration with Unipol Banca, drops by 1,35%. Banco Bpm does worse (-2,4%).
Asset management is weak. In November, redemptions exceeded subscriptions by €4 billion. The figure of Banca Mediolanum goes against the trend, however it is back by 5%. Azimuth -3%.
DEEP RED FOR TIM, AUTOMOTIVE IN DROP
Deep red also for Telecom Italia (-3,68%), which has slipped below 50 cents, weighed down by the uncertainties on the governance front.
The list of declines continues with utilities, the most solid sector so far, down yesterday across Europe (-3%): Enel -2,66%, Terna -2,88%.
The automotive industry suffers. Fiat Chrysler loses 3,2%. Ferrari (-3%) and Brembo (-3,55%) are not doing better.
THE AMPLIFON AND JUVENTUS DEBUTANTS GOOD, RECORDATI ADVANCES
Few titles in positive ground. Among these are the novices in the main index: Amplifon +3,52% and Juventus +1,14%.
Also bucking the trend was Recordati (+2,34%) which yesterday completed the acquisition of Tonipharm. For 2019, the company expects to be able to achieve a turnover between 1,43 and 1,45 billion, an Ebitda between 520 and 530 million, an Ebit between 460 and 470 million and a net profit between 330 and 335 million.
Salvatore Ferragamo (+1,56%) and Moncler (+0,94%) also performed well.
Worth noting is the leap of Nice, a home automation company, +40% to 3,47 euros, after the announcement of the delisting. On 24 December, the parent company Nice Group communicated that it had acquired 2,47% of the listed company's capital, at a price of 3,25 euros per share. In this way, the majority shareholder reaches 90,06%.
