The Fed's outcry against political inertia, paralyzed by the clash between the parties, has produced a result. Yesterday the political confrontation restarted, with immediate benefits for Wall Street, also supported by the good data arriving from the real estate market: the S&P 500 closed up by 0,3%, the Nasdaq by 0,4%. Dow Jones +0,2%. Futures are up 0,5% this morning.
AMERICAN BRICK WELL, RISK OF CRASH IN HONG KONG
In this way, the Asian lists recovered positions, even if they started to close the week in the red. Tokyo's Nikkei gains 0,5% in the final session. Sydney's S&P ASX 200 +1%: the Australian Stock Exchange is one of the few on the planet to end the week with a positive balance.
Hong Kong's Hang Seng is down 0,3% on the day of yet another arrest of Wang, one of the best-known activists. Slight rise for the Chinese Stock Exchanges, which close the week with a drop of around 4%. It worries Evergrande, the real estate development giant, which with 120 billion dollars of debt on its shoulders has been struggling for a few months to avoid ending up under water. One of its five-year bonds was suspended from trading tonight.
DEMOCRATICS OFFER 2.400 BILLION STIMULI
What is Washington's breakthrough? Democrats have announced a new bill with $2.400 trillion in stimulus measures. Times are short, but it is possible to reach an agreement before the last phase of the electoral campaign. However, the mere resumption of dialogue offers a precious space for action by the Fed, which, before moving, awaits the go-ahead from Congress to use the programs launched and used very little in the last three months. As Jerome Powell said and reiterated in recent days, monetary aid must be accompanied by fiscal aid.
THE OPTIONS ALREADY DISCOUNT TRUMP'S NO TO THE RESULT
Meanwhile, the race to vote is increasingly turbulent. Right now, the options market incorporates a year-end turmoil on the financial markets, as it assumes that, in the event of a defeat by narrow margins, Trump will contest the result and seek the intervention of the judges. Yesterday the party leaders, even those closest to Trump, said that the electoral result will be accepted for what it is: once the polls are closed, there will be an orderly rotation.
Brent-type oil trades at $42,2 a barrel, up 0,5%. The euro/dollar cross was stable at 1,1666. Gold archives its worst week in more than a month at 1.865 dollars an ounce.
“WE SERIOUS PEOPLE”: MATTARELLA BOJO SYSTEM
“We too love freedom, but we also care about seriousness”. President Sergio Mattarella responded in kind yesterday to Boris Johnson's latest gaffe, which justified the ruinous policy on Covid-19 with an alleged British "free spirit". Even the chief economist of the ECB Philip Lane, much appreciated by Mario Draghi, was very clear: no one is under the illusion of being able to let his guard down. “Without our measures – he tweeted yesterday – production would be lower and we would have to deal with more severe disinflation or even deflation”. The ECB's economic bulletin underlines that Covid -19 has represented a triple shock for both company and public accounts: the budget deficit for the Eurozone rises from 0,6 to 8,8% of GDP.
THE IFO INDEX CONFIRMS THE GERMAN RECOVERY
But there is also a happy note: the German Ifo index is increasingly optimistic about the possibility of recovery of the economy beyond the Rhine. The data on the business climate rose to 93,4 in September from 92,5 in August.
MILAN IN THE RED: S&P IMPROVED GDP ESTIMATIONS
After a mixed session, the Milan Stock Exchange closed slightly lower: -0,12% at 18,906 points. Standard & Poor's has raised its GDP estimates for Italy for 2020 to -8,9% from the previous -9,5%. In 2021 the rebound should be 6,4%; before it was +5,3%. The analysts of the rating company, which this month have to express themselves on the merits of the Italian debt, estimate -7,4% for the Eurozone.
BREXIT: THE EU WILL NOT CUT OUT LONDON
The other lists of the Old Continent are in the red, at their lowest for three months: Frankfurt -0,31%; Paris -0,83%; Madrid -0,14%.
London -1,25%. The EU has anticipated plans to strengthen the EU's capital market and reduce the bloc's dependence on the UK in anticipation of the country's exit from the Union in late December. The City will not be completely excluded, assured the EU Commissioner for financial services, Valdis Dombrovskis.
BRUSSELS PREPARES SECURE BITCOIN
The European Commission has unveiled a plan to create what EU officials have described as the world's most comprehensive set of crypto-currency regulations and blockchain technology. Service providers will be able to request a "passport" for access to the single market at EU level. Issuers of significant asset-backed cryptocurrencies, such as global 'stablecoins', will be subject to stricter capital requirements, investor rights and oversight.
ITALIAN AUCTIONS OK, BTP A 0,87%
The bond market loses a few beats compared to German paper. The BTP trades at a yield of 0,87%, from 0,85% yesterday. The Btp/Bund spread is at 138 points.
The Treasury placed 3,75 billion Ctz and 750 million Btp-i at auction yesterday with falling rates. The new Ctz maturing September 2022 was placed with a negative yield of -0,118% and recorded a demand equal to 1,59 times the amount offered. The inflation-linked BTP, maturing in May 2030, was assigned with a yield of 0,37% (-0,09%) and saw demand equal to 1,70 times the amount offered.
SHOCK START FOR OILS
The day got off to a decidedly bad start for Milanese equities, due to a large sell order on some oil blue chips which initially scuttled the list. At the end of the session, Tenaris -2%, Saipem -4%, Eni -1,6%.
EQUITA LIKES A BPM/UNICREDIT MERGER
Fireworks on the banking sector, muted in the previous sessions. Attention was triggered by a meeting between the top management of Unicredit and Banco Bpm, possible protagonists of a potential merger. The operation would have a strong industrial motivation, as it would significantly strengthen Unicredit's competitive positioning in Italy both in absolute and relative terms, especially in the North. Also on the shields Bper (+5,31%).
CREDIT AGRICOLE SENDS MEDIUM BANKS INTO ORBIT
In the spotlight is Popolare di Sondrio (+3,91%), but Creval (+11,6%) is going into orbit. The rumors of Crédit Agricole's interest in acquisitions in Italy among medium/small sized banks contributed to fueling the enthusiasm of investors in the banking sector.
Asset management is doing well: Finecobank +2,9%.
ATLANTIA STARTS THE SALE OF ASPI, CDP'S ULTIMATUM
Again on Atlantia (+1,5%), which even rose by more than 4% during the session, immediately after the decision of the extraordinary board of directors to launch a “dual-track” process for the disposal of the stake in Autostrade per l'Italia, which envisages the sale of the entire 88% stake in the capital through a competitive auction or the partial and proportional demerger with the contribution of ASPI's share capital to a newco to be listed on the Stock Exchange. Surprisingly, CDP sent an opening letter to the holding company, but set a time limit for the counterparty and reiterated its conditions on the indemnity.
DIASORIN IN THE SIGHT OF THE PROSECUTOR, AUTOGRILL'S REVENUES -56%.
Diasorin went against the trend (-0,95%), after the Milan Public Prosecutor's Office asked to copy all the chats on the cell phone of the president of the Lombardy Region, Attilio Fontana, a member of the League, as part of the investigation involving both the top of Diasoin and those of the San Matteo hospital.
Heavy Autogrill, down 2,8% after the data for the first 8 months which showed a drop in revenues of 56% due to the negative impact of Covid-19 in the travel sector.
