No news from the trenches of the war against the coronavirus. For now, the epidemic shows no sign of slowing down, the damage to the economy is growing, but the central banks are vigilant, ready to move, with new robust injections of liquidity, in the event of a worsening of the situation. The contrasted closure of the price lists in view of a weekend still marked by the emergency fits into this framework.
Stocks across Asia were mixed this morning, with Tokyo's Nikkei shedding 0,6% and Hong Kong's Hang Seng and Shanghai Composite both up 0,6% and 0,5%. The stock markets of Australia and South Korea also rose, Taipei and Singapore on parity. The week is closing with gains of just under 3% for major stocks in Asia Pacific, with the exception of the Nikkei, which is flat compared to last Friday. Meanwhile, the epidemic is also claiming victims in the Rising Sun.
The US stock markets are holding back: Dow Jones -0,43%, S&P 500 -0,16%. The Nasdaq dropped 0,14%.
Uncertainty pushes the dollar higher. The dollar-yuan cross, little moved at 6,98, has been below the watershed level for two days: 7. The euro continues to weaken to 1,083, a new low since mid-2017. Money moves towards the USA, considered safer and less exposed to the fallout from a Chinese brake.
TURNOVER IN LONDON, JOHNSON ON TRUMP'S ROAD
Euro pound crosses to its lowest since the beginning of the year at 0,833, on the news of the government reshuffle. British Chancellor of the Exchequer, Sajid Javid, has resigned after calls by Prime Minister Boris Johnson to sack all his advisers. His place is taken by Rishi Sunak, considered to be in favor of an expansionary fiscal policy. Markets are betting on the arrival of Trump-style maneuvers, even in the UK.
Brent oil unchanged at 56,3 dollars a barrel, +1% yesterday. Oil demand will decline year-over-year in the first quarter for the first time since the 2009 financial crisis due to the impact of the coronavirus outbreak in China, according to the International Energy Agency (IEA).
“The consequences of Covid-19 on global oil demand will be significant. According to estimates, demand is expected to contract by 435.000 barrels a day in the first quarter, the first quarterly decline in more than a decade,” writes the Paris agency in a monthly report, using the new scientific name for the virus.
Yesterday Eni -1%. Saipem -1,7%.
Flat gold at $1.575.
WORLD LIQUIDITY TOWARDS 80 THOUSAND BILLION
The latest updates on the Covid 19 epidemic provide partial relief, in the Hubei district there have been 24 new cases in the last 4.423 hours, less than half the increase the day before. It seems likely that the daily peak reached was a one off, due to a change in the system of diagnosis and treatment of the disease. In China, there are a total of 63.581 cases of Covid 19, +5.890. The deaths have risen to 1380, this figure has been revised and is not comparable with yesterday's, as there have been double counts in recent days.
Since the beginning of the epidemic, 6.723 people who have entered hospital have recovered and been discharged.
From the Princess Diamond, the cruise ship quarantined in the port of Yokohama, some passengers who tested negative for the Covid 19 test were allowed to disembark and return home. There are 219 cases on the ship.
World liquidity continues to grow, it has now reached 80.000 billion dollars, which is a level very close to global GDP. But inflation, as the very latest data arriving from the United States and Europe also say, is not moving, a stalemate that throws the economic theories of monetarists into crisis.
For the stock exchanges, if the numbers of the epidemic do not worsen, the problems could arise once the emergency has ended, as the central banks could decide to drain some liquidity.
EUROPE TODAY PRESENTS THE ACCOUNTS
European stock markets in the red with the exception of Piazza Affari which, with a final sprint, returned to positive ground. Today the markets will come to terms, without illusions, with the numbers of the German GDP and with the growth of the Eurozone.
In its winter forecasts, the European Commission underlined the low growth prospects for 2020 both for the Eurozone, at +1,2%, and for the EU of 27, +1,4%. Italy is doing badly, stuck at 0,3% and with a forecast for 2021 of +0,6%.
PROMETHEIA: FASHION WILL SUFFER, BUT NOT TOO MUCH
The Chinese epidemic will weigh heavily on the Italian fashion sector in the first quarter and probably in the entire first half of the year, but it will not affect the growth trend expected in the next two years. according to Prometheia. “We expect a rebound after a first quarter and probably also a first half of great difficulty due to the coronavirus. There will be a long tail when the situation stabilizes because the ports will be congested”, said Alessandra Lanza, senior partner of Prometeia.
The think tank estimates that Italian fashion revenues will grow to 80 billion euros in 2021 from 71,7 billion in 2018. The calculation is based on the 173 Italian companies in the sector that have a turnover of more than 100 million euros.
BUT PIAZZA AFFARI IS THE ONLY POSITIVE
Once again Piazza Affari (+0,12%) performs better than the other markets. The main list, at 24, has taken another small step towards the top of 892 points.
Frankfurt (-0,04%), Paris (-0,19%) and Madrid (-0,3%) also recovered in closing. Only London (-1,08%), affected by the political crisis but even more by the decline in raw materials, recorded the most significant decline.
BTP IN RALLY THANKS TO JAPANESE PURCHASES
The momentum of grace of the Italian secondary, which today acted as a driving force for the entire secondary of the Eurozone, eased slightly but did not interrupt.
The Japanese are buying Italian (but not only) paper. As stated by the maxi-pension fund GPIF at the end of 2019, purchases of foreign bonds hedged against exchange risk are treated in the same way as domestic bonds. At the moment, also considering the exchange rate hedge, a Japanese investor receives around 1,10% by purchasing a 0,03-year BTP at a hedged exchange rate, compared to -XNUMX% of the equivalent domestic government bond.
After a brief dip below 130 basis points - the lowest since the end of October - the gap between the ten-year BTP and the Bund rates ends at 131 cents. The yield of the BTP falls below the threshold of 0,9% and closes at 0,89%.
The placement in the morning of 2,75 billion 7-year BTPs with interest rates at the historic low of 0,48% and 2,25 billion 3-year BTPs with a negative yield (-0,1%) was positive.
THE ARRIVAL OF THE KKR FUND GIVES TELECOM WINGS
Banks plus Telecom: this is the mix that supported the rise in Piazza Affari.
Tim +4%, boosted by the news that the private equity fund KKR is negotiating its entry into the new landline company. The same source, quoted by Bloomberg, reports that the telephone operator is preparing to approach Open Fiber to talk about a merger. The increase in the subsidiary Tim Participacoes + 17% after the accounts also favored the increase. Banca Imi confirmed the buy rating with a target price of 0,62 euro, Mediobanca Securities reiterated the outperform recommendation and the target price of 0,79 euro per share, while for Equita Sim the rating is Buy, target price at 0,64, XNUMX euros.
STM BOOM REVIEWS 2002 PRICES
Stm also stands out (+2,69%) with the share reaching a new high of 29,39 euros, returning to the levels of July 2002. Since the beginning of the year, the French-Italian joint venture has gained 22,4% .
UBI AND BPM DRIVING CREDIT, POP SONDRIO SUPERSTAR
Banks return to positive in the final. Ubi +1,86% still in the wake of the results and awaiting the presentation of the new business plan next week. Banco Bpm also runs (+1,7%). The big Unicredit (-0,67%) and Intesa (+0,10%) are slower.
Still on the shields Popolare Sondrio (+2,6%, but +15% in the last three sessions) after the advocate general of the EU court on Monday gave a favorable opinion on the 2015 reform which requires the transformation of popular companies into joint-stock companies: Sondrio is the only listed company to have retained its cooperative statute.
MEDIOBANCA PROMOTES NEXI, PIRELLI CUT BY BANCA IMI
Nexi +4,5% following the results of the fourth quarter. Mediobanca Securities confirmed outperform rating and target of 13,8 euro. Société Générale raised its target price from 11,8 to 14,3 euros (hold).
The industrial sector is under pressure, with Fiat Chrysler down by 1,2% and Pirelli down by -2,15%. Banca IMI reduced the rating to hold from add with a revised target price of 5 euro from 6,1 euro,
The luxury sector was in the red, affected by the recent news on the increase in coronavirus cases in China: Ferragamo -1,49%, Moncler -1,68%.
TINEXA SURPRISES ANALYSTS: +14%
Of note is the leap of Tinexta (+14,34%), after the 2019 accounts, which showed an Ebitda of 4% higher than expected. Mediobanca Securities confirmed the outperform recommendation and the target price of 14,5 euro, while for Banca Akros the rating is neutral with a price target of 12,50 euro. Molmed is also on the rise (+7,3%), after the company received the documentation from Aifa (Italian Medicines Agency) in recent days certifying the authorization of new Gmp areas of the Bresso site, which further increase its production capacity.
