China will not use the weapon of devaluation in the trade war. The markets take note of this with relief. But the lessened tensions on the tariff front have given way to another concern: the increase in US market rates, in turmoil a week after the Fed's decisions. Sales on bonds are picking up speed: the yield on the 3,09-year Treasury rises from five days, up to 2%. The 2008-year Treasury yield hit its highest level since 2,82, at XNUMX%, driven by the sharply rising housing market. The trend has spread to Europe. The XNUMX-year Bund rate is close to half a point, the BTP weakens much more, at the mercy of the free words of the majority: the game of the spread is increasingly widespread among large investors, quick to exploit the ups and downs of the moods of the executive .
PAUSE IN TOKYO RISE, CHINA DOWN
The Asian markets, busy digesting Trump's latest thrust (yesterday the US president's smartphone remained silent) have marked time.
The Japanese Stock Exchange is on par after four sessions on the rise. The gain since the beginning of 2018 is around +4%. For an Italian investor, the overall balance improves to +6,8% considering the simultaneous revaluation of the Yen against the Euro (+2,8%). It is one of the best performing stocks globally. Shinzo Abe, meanwhile, has dominated the congress of the liberal-democratic party and is on his way to winning the elections on the wake of the economy's awakening.
China's stock markets are down slightly, while the dollar-yuan exchange rate is at yesterday's levels. The slowdown in the Nasdaq weighs on the indices of the region.
SANCTIONS CLOSER, OIL ON THE RISE
Oil on the rise, also following the new drop in crude stocks in the United States: Brent is trading at 79,7 dollars a barrel this morning. There is talk of some concern about the contraction of the foreseeable contraction in supply, caused by the introduction of sanctions by the United States on Iran. At Piazza Affari Saipem +1%.
The euro trades at 1,168 against the dollar.
THE BANKS TOAST ON WALL STREET…
The Dow Jones index (+0,61%), the highest since January, and the S&P 500 (+0,13%) rose on Wall Street. The Nasdaq decreased slightly (-0,08%).
The Wall Street session was conditioned by movements in the bond markets. The banks are appreciated: Goldman Sachs, Bank of America and JP Morgan post increases of between 2,6 and 3,3% in line with the increase in the cost of money. On the contrary, some tech champions are back: Microsoft -1,3% and Amazon -0,8%, affected by the launch of an investigation by the EU.
…AND THE CANNABIS BOOM EXPLODES
Another trend is moving billions on Wall Street billboards these days: the rush for marijuana, triggered by Coca Cola's interest in Canadian Tilray (+47%, after +31% on the eve). The CEO of the producer of medical cannabis, Brendan Kennedy, has again spoken about how wide the possibilities for the use of marijuana are. The company landed on the price list at 17 dollars, today it is worth about 220. Canopy Growth (+6%) and Cronos Group (+23%) also rose. The fund managed by Peter Thiel, the billionaire-philosopher close to Trump, has already accumulated earnings in the sector of 12 billion dollars.
EUROPEAN PRICE LISTS ON CAR TRAILER
The European stock exchanges all closed higher and close to the highs for the day driven by the miners who feel the economic rebound, and by the auto sector, driven by the discounts of the "older" models which risk incurring new, stricter rules. Financials put aside fears of the US-China tariff war for a day, supported by the good pitch of China and Japan. Traders are starting to wonder if the gap between US and European equities is justified. Giuseppe Sersale of Anthilia notes that “the Stoxx 600 and the Eurostoxx 50 are negative since the beginning of the year (respectively by around 2.5% and 4%) and the September Merril Lynch Survey indicates that Investors have cut exposure to the Eurozone share price for 6 of the last 7 months, bringing it to an 18-month low”.
Milan (+0,25% to 21.280 points) closed with a lower rise than that of the other main European stock exchanges.
The other lists are doing better this time. In ascending order: Madrid posted +0,35%, London +0,4%, Frankfurt +0,5%; finally Paris +0,6%.
MS5 KNOCKS FOR MONEY, THE SPREAD GOES UP
Minister Giovanni Tria continues to rally around the manoeuvre, but the siege continues. The economic sherpas of Lega and M5s are negotiating to divide up 9 billion each and ask the owner of the economy to also find the 12,4 billion necessary to sterilize the VAT. Di Maio from China has proposed an exchange to Europe: more deficits in 2019 against the commitment to return to the parameters from 2020, as new spending cuts are implemented. However, the Northern League undersecretary to the Prime Minister Giancarlo Giorgetti says he is "certain" that Tria will remain in his place.
The words of Deputy Prime Minister Di Maio weighed down on the government bond market. The yield differential with Germany on the ten-year stretch remained anchored below 240 basis points.
The spread fluctuated between 2,77% shortly after the opening, and 2,87%. There is a flattening of the yield curve, reflecting the worse performance of the short end.
While waiting for today's medium/long-term auctions in France and Spain on the agenda, yesterday Germany took action on the primary, with the placement of 2,4 billion euros of the XNUMX-year bond, with yields and offers rising.
HIGHLIGHTS OF THE AGNELLI GALAXY, BUT FERRARI HOLDS BACK
Still in evidence the Agnelli galaxy. After the market's excellent response to the Investor Day announcements (dividend payout on the rise, buyback planned), Ferrari slows down (-1,3%) despite JP Morgan raising its target.
However, Exor (+2,12%) and Fiat Chrysler (+1,82%) took off, replicating the trend of the automotive sector in Europe. The group's market share was 6,6% in July and 7,1% in August, an increase of 0,4% over a year earlier.
CARIGE, TODAY THE SHOW OF ACCOUNTS
The banking sector recovered in the afternoon, weak in the morning. The sector index gains 1,15%. Rises around 1,5% for Intesa (+1,34%), Unicredit (+1,43%) and Bper (+1,51%).
Banca Carige in tension (+1,15%) on the eve of the meeting in which he will be appointed the new disputed board of directors between the Malacalza consortium and the one headed by Raffaele Mincione: the vote may not determine the formation of stable governance for the bank.
BUZZI, THE BUY BACK EFFECT CONTINUES
Prysmian retraces (-2,66%, but above the lows of the session), on physiological profit taking after the jump on the eve propitiated by the half-yearly accounts.
Conversely, Buzzi (+2,2%) is confirmed as one of the best stocks after the rally on the eve (+4%).
The stock was moved by the announcement of the launch of the treasury share buyback program for up to 7 million ordinary and savings shares. The program will last 18 months starting on May 10th.
ASTALDI BOUNCES, TREVI DEFLATES
The jolts in the infrastructure sector are not abating. Astaldi (+12,5%) flies by double figures. The violent rebound is linked to attempts to find a solution to the heavy debt, perhaps by resorting to a white knight.
Trevi, world leader in subsoil engineering, was the worst performer with a 7% decline. Yesterday it had rebounded 15%. 93% of the group's financial creditors accepted the proposed standstill agreement, allowing it to enter into force. The agreement allows the group to continue the talks underway with its stakeholders "for the definition of the capital strengthening manoeuvre". The company is defining an alternative manoeuvre, which envisages a capital increase reserved as an option for shareholders and the simultaneous conversion of part of the Group's financial debt into financial instruments.
Digital Magics, business incubator of digital projects and provider of consultancy and acceleration services for startups and companies, was up 5% in the final to 7,06 euros.
