Stock markets remain at the mercy of oil moods. After a day marked by sharp declines, Wall Street recovered positions on the wave of the rebound in crude oil prices, the true "risk barometer" as Goldman Sachs analysts have defined it. Hence a disturbing forecast: "In the next few months - reads a note from the broker - we will proceed without a precise direction, in the name of volatility". Since the beginning of 2016, there have been 21 sessions on Wall Street so far with fluctuations of more than 1%.
OIL REBOUND SUPPORTS US EXCHANGES
Yesterday the swing in crude oil closed with a modest rise: Brent +0,4% to 34,27 dollars a barrel, Wti +0,8% above 32 dollars. The unexpected drop in US inventories allowed the rebound. This news was enough to bring US price lists back into positive territory, hitherto depressed by the energy sector and by worries about the stability of the banks. In the final, Exxon shares passed from -1% to +0,36, Chevron from -2,8% to +0,45%. The rally gained strength after the closure of the European markets: Eni closed at -2,4%, Tenaris -4,6%, Saipem -1,5%.
At the end of the session, the Dow Jones index rose by 0,32%, S&P 500 by 0,44%. Better the Nasdaq (+0,87%) thanks to the push of Apple (+1,49%). But since the beginning of the year, the Apple stock has lost 19%.
NEW LANDSLIDE IN SHANGHAI. BRAZIL AT JUNK LEVEL
Asian markets were mixed this morning. Tokyo rises (+0,7%), the yen falls slightly. Conversely, Hong Kong loses ground (-0,7%). The Japanese Sharp drops by 17% after the sale to the multinational of Taiwn Hon Hai. The decline of the Chinese Stock Exchanges was heavier: in the middle of the session Shanghai lost more than 3%, Shenzhen almost 5%.
Meanwhile, the crisis in emerging markets worsens. Brazil has definitely dropped into the junk group. Moody's cut its rating by two steps, to 'Ba2' from 'Baa3', in the non-investment grade area. The Brazilian rating was also recently downgraded by S&P last week and by Fitch in mid-December.
EUROPE TRY TO REACT AFTER THE FALL. MILAN -2,5%
An opening rebound is expected for European stock exchanges. Futures report: London +74 points, Paris +61, Frankfurt +127. Today the agenda will be dominated by a shower of corporate results. The accounts of around twenty blue chips will be announced, including Axa, Deutsche Telekom, Bayer and Lloyd.
Yesterday the price lists of the Old Continent experienced yet another difficult day. At the end of the day, the FtseMib index of Piazza Affari recorded a drop of 2,5%. The Paris Stock Exchange falls by 1,9%, Frankfurt -2,6%, Madrid -3,1%.
The greatest losses are for commodity stocks (European Stoxx index for the sector -6,6%), for the Automotive industries (-3,7%) and for Banks (-3,1%). Mining stocks listed in London continue to decline sharply: Anglo American lost 9,5%, Glencore -10%, Bhp Billiton -8,3%.
IN VIEW OF G20 THE IMF CUTS ESTIMATE
This is the situation on the eve of the G20 in Shanghai from which, according to US Treasury Secretary Jack Lew, we shouldn't expect big news. A forecast that has fueled the despondency of the Stock Exchanges which, again according to Lew, "these days tend to see things worse than they are". Reasonable pessimism, given the data activated yesterday by the US economy: tertiary sector down after 27 months of growth, sales of new homes at their lowest since last autumn.
The Monetary Fund, in the paper in preparation for the weekend meeting, notes that "after an unexpected slowdown in global economic activity at the end of 2015, there was a further weakening at the beginning of 2016". For this reason, the IMF believes a cut in its growth estimates, already reduced to 3,4% (-0,2%) in January, is probable.
ECB, WEIDMANN SHARPENS THE WEAPONS. TODAY THE AUCTION BOT
Meanwhile Jens Weidmann, president of the Bundesbank, is sharpening his weapons in view of the ECB directorate on 10 March: "It is dangerous – he said – to ignore the collateral effects of further accommodating policies by the ECB".
The general uncertainty is obviously reflected in the sovereign debt market. The yields of Italian and Spanish bonds have recovered positions after a difficult morning dominated by the race for the most solid bonds. In the end, the 1,536-year BTP closes at a yield of 139. However, the spread widened to 4 points (+141 bps compared to the day before) after exceeding XNUMX points in the morning. Today the six-month Bot auction is scheduled.
CHINA EFFECT ON CARS AND LUXURY. FCA -36% IN 2016
The risk of a possible recession coming from China has contributed to worsening the mood of the manufacturing industry, starting with the auto and luxury sectors. German manufacturers sold, conditioned by the economic slowdown in China: Volkswagen fell by 4,5%, Daimler -4,1%, BMW -4,1%.
Fiat Chrysler also held back (-4%). The Italian-American group has thus increased the loss since the beginning of the year to 36% and is the worst European automotive stock (Eurostoxx index -21%). Morgan Stanley has decided to resume coverage of the FCA stock with an Overweight recommendation and a target price of 10 euros. Ferrari also fell (-2,3%).
Rain of sales also in luxury. After the warning of the German Hugo Boss, minus signs multiplied yesterday. The Lvmh colossus loses hits (-2%). In Milan, Ferragamo lost 4,73%, among the worst blue chips in Piazza Affari. Yoox fell by 5,6%, but Tod's (-3,3%), Moncler (-2,6%) and Luxottica (-2,3%) also suffered.
Only Brunello Cucinelli (+0,8%) moved slightly up. During the presentation of the autumn/winter 2016 women's collection, the president said he was satisfied with the orders received so far and that he saw an acceleration of sales in Italy up to +5/6% in 2016.
MOODY'S SIZE STM IN JUNK, PRYSMIAN CONFIRMS COUPON
A day to forget also for other big names in the industry. StM downgrades (-4,9%): Moody's cut its rating to 'junk', bringing it to 'Ba1' from 'Baa3', with a stable outlook.
Finmeccanica -3,9%: the government of Panama and the company have reached an agreement which puts an end to the disputed contracts awarded in 2010 to the subsidiaries Selex and Telespazio, says a company note. The Panamanian government announced the cancellation of a 125 million dollar contract with Selex, involved in a dispute over an alleged corruption case.
Prysmian -1,28%: The world leader in the energy and telecommunications cable systems sector closes 2015 with revenues, margins and profit growing, confirming the dividend compared to the previous year.
BANKS STILL IN SUFFERING. THE EBA STRESS TESTS ARE HERE
Once again the banks were at the center of the sales. The Italian index of the sub-fund dropped over 3% in line with the European Stoxx. The Bigs retreat: Unicredit -1,6%, Intesa -3,4%, MontePaschi -5,6%. Ubi lost 3,6%. Banco Popolare also down -4,8%. It is increasingly probable that the merger plan with Bpm will not be submitted for approval by the decision-making bodies of the two banks by the end of February. In fact, the two institutes are awaiting the informal go-ahead from the ECB. The wedding is thus moved to the weekend of March 5th.
The results of the 2016 stress tests launched yesterday by the Eda will be published at the beginning of the third quarter. In a note, the institute confirmed that no rejection is foreseen and that no capital thresholds have been defined for individual banks. The results will feed into the ECB's SREP, within which decisions on the appropriate levels of capital will be taken. There are 51 banks involved, of which 37 from the euro area, for a coverage of 70% of the EU sector.
Among the insurance companies, Generali fell by 1,1%, UnipolSai -0,8%.
ONLY EXOR ADVANCES, THE HUVENTUS COMES BACK IN PROFIT
Exor escapes the general decline (+1,34%): the holding company completed the sale of 17,1% in Banijay, as part of its merger with Zodiak Media, a television production company controlled by the De Agostini group. Exor will receive 60,1 million in cash, recording a capital gain of 24,8 million.
Telecom Italia falls (-2,3%). Mediaset fell 6,1%, despite Citigroup upgrading its recommendation to Neutral from Sell. Enel closed the session down by 2,6%: the subsidiary Endesa closed 2015 with a net profit of 1,09 billion, below the expectations of analysts who on average expected 1,19 billion.
Finally, Juventus (-1,71%) revised the profit in the first half of the 2015/2016 financial year: 30,3 million euros compared to the loss of 6,7 million in the same period of the previous year. Thanks to the higher income from player management, equal to 30,2 million, and to the general increase in recurring revenues of 18,1 million, of which 6,8 million for the sale of products and licences. Added to these are non-recurring net revenues of €10,6 million.
