The Fed is ready to provide the markets with all the necessary liquidity. The promise was confirmed last night by the Fed's minutes, which fueled confidence in the US: protection measures against contagion have been relaxed in all 50 states. Donald Trump, between one attack on China and another, said that the more than 1,5 million infected in the country are a source of pride, because they "indicate a very large number of tests". And on the back of so much confidence, the Nasdaq and S&P 500 are recovering their pre-pandemic levels. But the rain of liquidity is also a sign of the depression that threatens economies started at zero growth rates.
US TREASURY AUCTION FOR 20-YEAR BONDS AT 1,22%
The US Treasury had no problem yesterday placing $20 billion of 20-year Treasuries, just as it hadn't had them in recent days with other issues: requests for the new bond had reached $50 billion. Final yield at 1,22%, twenty basis points below the thirty-year level. It was the first 1986-year auction since 54 and will soon be followed by new offerings totaling $XNUMX billion. The UK has also joined the increasingly crowded club of sub-zero stocks. Meanwhile, the data coming from the real economy, starting from Asia, are helping to curb enthusiasm.
TRADE IN JAPAN AND KOREA SUFFERS
In Tokyo the Nikkei is almost unchanged. Japan's exports fell 22% in April, the worst figure since 2009, down from -11% in March but in line with consensus expectations. Hong Kong's Hang Seng on parity. South Korea's import/export is also in free fall +0,4%.
SHANGHAI WAITS FOR LI KEQUIANG'S WORDS
Little moved the Shanghai Composite (+0,1%). Attention is focused on the speech that Premier Li Kequiang will give at the plenum of the Chinese People's Congress. The alarming levels of the number of jobless in cities, estimated by Fitch at around 130 million, should prompt the authorities to announce some measures in the next few hours.
The US markets were positive, galvanized by the recovery of technology: the Dow Jones index +1,52%, S&P 500 -1,67%. Nasdaq leap: +2,08%.
The airlines are also restarting: the sector index is up 5,35% after Delta Airlines announced the resumption of flights.
TODAY THE DATA (EXPECTED BAD) OF US LABOR
Futures anticipate a bearish start on Wall Street, where they expect more bad jobs data. New jobless claims should have come in at 2,4 million last week, down half a million from the previous week. The jobless who have turned to state assistance have risen to 39 million since the outbreak of the pandemic. Continued claims, a good indicator of the number of people currently out of work, should have risen to 24 million, from 22,8 million a week earlier.
OIL AT THE TOP FOR A MONTH
Brent oil up 2%, to 36,5 dollars a barrel, the highest in the last four weeks. Goldman Sachs reports that, starting next year, the contribution to production growth provided by non-OPEC countries will begin to decline, gradually reaching zero between 2021 and 2025. To keep the market in balance, OPEC should increase the production of at least seven million barrels per day.
Even the European stock exchanges are starting to open slightly down: futures of the City mark -0,7%.
EU PRICE LISTS RECOVERY UNDER THE EURO SIGN YESTERDAY
Yesterday the euro rose above 1,10 against the dollar, to a seven-month high, on the wave of market approval for the Merkel/Macron plan. But the game is far from closed. Austrian Chancellor Sebastian Kurz said he wanted to present a counter-proposal on the Recovery Fund to the plan devised by the Franco-German axis. Among the central points is the use of loans, and not non-repayable loans, to be granted in exchange for reforms. A point of view also shared by the Dutch premier Mark Rutte, who together with Austria, Denmark and Sweden forms the quartet of so-called "frugal countries".
Meanwhile, the negotiations between the United Kingdom and the European Union for a post-Brexit agreement are likely to run aground again on the question of the Northern Ireland border. The European chief negotiator, Michel Barnier, has warned his British counterpart, David Frost, that the EU will not automatically grant the United Kingdom any favorable conditions during the negotiations.
MILAN ABSORBS THE SHORT EFFECT
Piazza Affari, after a troubled morning (-2%), recovers 1,05% and rises to 17.13 points: the short effect, after the resumption of short selling decided by Consob, has been completely absorbed.
BERLIN HELPS LUFTHANSA
Frankfurt is confirmed as the most tonic market: +1,4%. The German government has agreed the final details of the rescue package for Lufthansa.
PARIS SAVE RENAULT
Followed by Madrid +1,1%. More timid Paris +0,87% where Renault shines (+6,16%) which obtained a loan of 5 billion guaranteed by the state.
London +1,13%: Marks & Spencer, the historic British department store chain, jumped by 7,6% after announcing that it would speed up the restructuring process. The coronavirus caused a 21% drop in profit.
BTP MAKES BINGO: 14 BILLION INCOME. CLOSE TODAY
After three days of growing demand (4 billion euro on Monday, 4,7 on Tuesday and 5,2 on Wednesday), the placement of the sixteenth Btp Italia to retail investors concluded with great success: the Treasury raised almost 14 billion euro in awaiting the response today from institutional operators. The minimum coupon at 10 will be confirmed at 1,4%.
The secondary stable (spread 210 basis points, -0,03%).
EVEN GREAT BRITAIN OFFERS TITLES BELOW ZERO
Britain placed a government bond at a negative rate for the first time. The country thus joins the list made up of Japan, Germany and other European states that sell bonds with yields below 0%. The auction saw the sale of £3,75 billion in Gilt maturing July 2023 allotted at an average yield of -0,003%.
ELKANN: “THE AGREEMENT WITH PSA IS WRITTEN IN STONE”
"The terms of the agreement with PSA are set in stone and binding," said John Elkann in the afternoon conference call that followed at the Exor assembly (-0,85%), speaking of the 5,5 billion extraordinary dividend envisaged by the agreement for the merger with the French company. The shareholders' meeting approved the 2019 financial statements and the distribution of a dividend of 0,43 euro per share (yield of approximately 1,0%), for a total amount of 100 million.
The shareholders' meeting also approved the extension of the board of directors' authorization to buy back treasury shares on the market for a period of 18 months from the resolution. The maximum amount to be used for share buybacks will be 500 million. Also approved the possibility of canceling ordinary shares held or purchased in the future in the buyback plan in order to optimize the capital structure.
“EXOR HAS 1,5 BILLION FOR SHOPPING”
As far as Partner Re is concerned, the chairman specified that, after the failed attempt to sell the reinsurance company to Covea, no other merger hypotheses will be considered for now. The next goals? “We are patient – was the answer – We can wait for the right opportunity. We had 1,9 billion euros available and after the Gedi and Via operations we have 1,5 billion left". Among the cheapest objectives, the travel and hospitality sectors have been indicated.
DIASORIN RUNS AGAIN, NEW THUMP FROM TIM
After a short break, Diasorin's star shines again (+5,58%) to a new all-time high in the wake of the boom in requests for serological tests to intercept the presence of antibodies.
In the meantime, sales on Tim continue (-7,86%) after the results of the first quarter. Banca Imi writes that "following the disappointing results, most of yesterday's conference call was dedicated to understanding the dynamics of the business rather than extraordinary transactions". The landslide of Mediaset (-4,2%) does not stop.
Among industrialists, Pirelli is well received (+2,2%). Prysmian shines (+2,92%) which has finalized the contract with one of the main European producers of electricity in the Netherlands. Stm +1,31%. Leonardo closes in positive ground (+0,89%), opening in deep red after Fitch's decision to cut the outlook to negative from stable (BBB- rating).
UTILITIES AT FULL SPRINT. AKROS PROMOTES A2A
The utilities are in great evidence: Enel +3,56% ahead of Terna and Hera, up by 2%. A2A +1,25%: Banca Akros reiterated the buy recommendation and the target price of 1,6 euro.
UNDERTONE BANKS: THE RETURN OF THE DISCOVERY WEIGHTS
Heavy banks despite the contraction of the spread. Still down Banco Bpm (-0,42%) and Bper (-1,7%). On the other hand, the big Unicredit and Intesa are holding, both +0,6%.
Ferragamo (-4,3%) and Safilo (-5,6%) suffer.
Fila (+2,59%) should be mentioned among the mid caps: Banca Imi confirmed the buy rating.
