The victims of the epidemic that hit China are increasing. But don't panic. Unlike what happened on the occasion of SARS in 2003, the Chinese authorities are reacting quickly and efficiently to the emergency. And the Asian markets, after the initial slip, are responding.
The Shanghai Stock Exchange, after an initial drop of 1,4%, more than halved the loss this morning, to -0,5%. The Asia Pacific index rises by about half a point. The response of the main stock exchanges in the region was even more robust: Hong Kong's Hang Seng index rose by 1,1%, after closing yesterday with a loss of almost 3%. Japan's Nikkei 225 index advanced 0,7%.
South Korea's Kospi gained 0,7% after the central bank said the country's economy grew 1,2%, the fastest expansion since the third quarter of 2017. Australia, a one of the favorite destinations for Chinese tourists for the Lunar Year holidays, even sets a new record.
PLANES AND CRUISES SUFFER, LUXURY IS WEAK
The effect of the crisis, at least for now, has been limited to a few sectors: the airlines index is losing ground (-2,8% on Wall Street), as are cruises (Carnival -2,3%) and Macau casinos. But most tend to consider the emergency as an opportunity to be exploited for good purchases, strengthened by the precedent of the rebound that occurred in 2003.
Yesterday evening Wall Street finished down with the three main indices, intimidated by the reporting of the first case of contagion in the country: S&P 500 -0,26%, Nasdaq -0,19% thanks also to the boost from Tesla (+7,2 % after exceeding the $800 threshold).
NEW REFERRAL FOR BOEING, GOOD NETFLIX. FLY IBM
The Dow Jones suffered the most (-0,52%), weighed down by the decline of Boeing (-3,3% after announcing a new postponement, this time in June, of the resumption of Maxi 737 flights).
Good news coming from the quarterly. Intel advances (+1,6%), IBM explodes (+4,4% on the wave of growth in cloud services). Netflix +2,2% after the Stock Exchange: subscribers rose by 8,76 million, above analysts' expectations but down 0,9% on the previous year.
The dollar is almost unchanged this morning: cross with the dollar at 1,109.
Gold is changing hands at yesterday's levels, at $1.550.
Oil prices are down by 0,4%: according to Goldman Sachs, the drop in consumption caused by the epidemic will amply compensate for the stop to production in Libya.
EUROPEAN FUTURES GROWING, MILAN ALSO RECOVERING
Futures on the Eurostoxx index anticipate a positive start.
Some tension is expected on the BTP (ten-year at 1,37%), following the rumors according to which Luigi di Maio is ready to resign as head of the M5S before the elections in Emilia Romagna.
In addition to the epidemic, to curb the price lists yesterday, despite the proclamations launched by Donald Trump in Davos, the fears about the economic slowdown expressed by the Monetary Fund's Outlook contributed, as well as the news that, for the first time since 2013, in Euroland the demand for new loans to banks by businesses is declining. The credit engine is running at full speed only on the mortgage front, supported by low rates, but the economy, despite the comforting signals coming from the Zew, is still traveling at low speed. This will be one of the key themes of tomorrow's ECB directorate.
RISK OF US DUTIES ALSO FOR ITALY
Piazza Affari closed down by 0,65%, halving the losses from the morning, stopping at 23.845.
US Treasury Secretary Stephen Mnuchin has warned Italy and Great Britain: if they introduce the tax against the giants of the Web, they will have to face the imposition of new tariffs by the US.
LVMH HALS LOSSES, ZEW RELAUNCHES FRANKFURT
Similar script in Paris (-0,54%): Lvmh, the luxury flagship, halved its losses to 1,12% in the final, Kering -2,07%. Reductions in the order of half a percentage point also in Madrid and London.
Frankfurt was stable, eliminating the initial loss of about one point after the publication of the Zew index which amply confirmed the signs of improvement in the economic situation beyond the Rhine. The figure relating to expectations on the trend of the German economy was at the highest level since 2015, at 10,7. If the index gets a score above zero, it means that the interviewees are overall optimistic about the future of the German economy; if the index is less than zero it means that they are pessimistic instead.
The Zew revived the banks. Deutsche Bank closed at +1,5% from the initial -2%.
Different music for Ubs (-4,5% in Zurich). The institute doubled its profits, but the performance was not enough to hit the target.
SPREAD IN RECOVERY WAITING FOR THE VOTE
Bad day for Italian assets, with spreads widening from 162 to 166 points and Piazza Affari in the dark, for no apparent reason other than the looming elections in Emilia Romagna.
The 0,22-year German bund trades at a yield of -1,36%, Btp closing at 3%, +XNUMX basis points.
RACE TO MPS IN VIEW OF THE EU VERDICT
Luxury stocks are also under fire in Piazza Affari, in view of a decline in Asian demand. Moncler loses 2,2%, Salvatore Ferragamo -0,77%. More accentuated reactions for less liquid stocks: Brunello Cucinelli -4,05%, even if it has less exposure to Asia than its competitors.
The epidemic effect also affected Autogrill (-2,85%), penalized by fears of a drop in tourist travel.
Among the banks, MPS outperformed with a leap of 9,4%, returning to the levels of the beginning of October 2018. The bank placed a 5-year senior preferred "long" bond for 750 million euro, for which orders exceeded the 1,35 billion euros. The rally is linked to the wait for the EU decision on the Treasury's de-risking plan which could arrive on 7 February to coincide with the bank's accounts and concern 11-12 billion euro of non-performing loans.
TONONI BPM BENCH CHAIRMAN (+2,4%)
Other stocks in the sector did well: Banco Bpm (+2,38%) announced that the board will propose the former president of CDP and Montepaschi Massimo Tononi as the new president of the institute. Bfor +1,27%.
Nexi -1,6%: Moody's changes the outlook to stable from positive.
The industrialists were weak: Cnh -2,45%, Prysmian -2,24%. Ferrari leaves 1,4% on the ground.
LANDSCAPE DE LONGHI. MEDIOBANCA PUNISHES SAFILO
Among the mid-caps, De Longhi down 3,56%: Banca Akros has lowered its rating to veteran.
Safilo -3%: Mediobanca cut its recommendation from neutral to underperform.
On the rest of the list, strong purchases on Trevi Finanziaria (+24,2%), after the Court of Appeal of Bologna approved the restructuring agreement already rejected in the Court.
