The desire for revenge animates the markets at the start of a short week: the stock exchanges of China, Thailand and India are closed today. On Friday, in view of Easter, the price lists in Europe and the Americas will stop. In the meantime, a probably premature optimism prevails, favored by the drop in infections in Italy and France, as well as by the imminent end of the security measures in Wuhan, the cradle of the epidemic, which will reopen its doors on Wednesday.
Tokyo's Nikkei gains 2,7% despite the fact that this morning Prime Minister Abe decided to close Tokyo and Osaka to prevent the resumption of infections. Japan's Ministry of Health plans to triple stockpiles of Avigan, an antiviral in late stage development at Fujifilm laboratories, to be able to treat two million patients.
Hong Kong recovered (+1%), shaken by the decision of the British authorities to impose the renouncement of paying the dividend to the shareholders of HSBC, the most popular stock among savers in the former British colony.
Seoul's Kospi also rose sharply (+2,5%), awaiting Samsung's accounts.
FUTURES FLY IN THE USA AND IN THE CITY
Futures of the S&P 500 index (+3,3%) and the London Stock Exchange (+2,7%) are flying, not at all disturbed by the hospitalization of Boris Johnson.
The indications arriving from the USA justify the euphoria. The president of the Federal Reserve of Saint Louis, James Bullard, said on TV that there is good news about the restart of the United States economy: thanks to a comprehensive diagnosis of the entire population, it will be possible to gradually get activities back on track. Every citizen tested will receive a document that will certify his condition with respect to the virus, the negatives to the test will thus be able to return to work. Meanwhile, Donald Trump spoke of the need to start thinking about a return to normalcy, including the recovery of US sport. The President met the top management of the club in view of a return to the field of the teams around this summer.
OPEC SUMMIT SLIDES, TRUMP THREATS DUTIES
Brent oil opened sharply down tonight, around 30 dollars a barrel, five less than Friday evening's close, but within a few hours the loss was reduced and this morning North Sea crude was at 33,4 dollars, -2%. The volatility is justified by the postponement of the OPEC + summit, scheduled for today, to Wednesday or Thursday, in the hope that the agreement between Saudi Arabia and Russia will mature. To avoid a collapse in prices, in free fall together with consumption, the aim is to cut production by 10-15 million barrels, but there is wide disagreement on the distribution of sacrifices. And Big Oil, according to the Financial Timesraised $32 billion in bonds and investment cuts to tackle the price war. Trump, meanwhile, threatens tariffs on oil imports, in order to protect American producers.
DECISIVE EVE FOR THE EUROBONDS
"Here you make Italy or you die," said Giuseppe Garibaldi to Calatafimi. And we, before the battle to stop the coronavirus, say: either we make Europe here, or Europe will die!". Luigi Zingales, an esteemed professor in Chicago, did not mince words to underline the importance of the decisions that the EU will have to take to deal with the emergency between tomorrow, on the occasion of the meeting of finance ministers and the Eurogroup summit. On the one hand there is the request for Eurobonds, supported by Italy and Spain, on the other the offer of loans subject to (more or less rigid) conditions and guarantees that could come from Germany and the Netherlands. In between is French mediation: recovery bonds, i.e. a one-off loan, in the face of a once-in-a-lifetime situation, which must not sound, in the eyes of hawks, like giving in to the reasons of the weaker countries.
ECB AND FED MINUTES, TODAY THE CONFIDENCE INDEX
At the same time as the Eurogroup on Thursday there will be the publication of the minutes of the recent ECB directorate in which the 750 billion bond purchase plan was launched.
The calendar of stock exchanges – today orphaned of Chinese price lists, closed for holidays – provides for various appointments for the week which will probably only confirm the situation of absolute emergency. The minutes of the last Fed meeting will allow for a more precise picture of the impact of the coronavirus on the US economy.
The data on orders from German industry will be released this morning. The data on Italy and France will follow during the week. The Sentix, the eurozone confidence index, is also out.
THE LIQUIDITY DECREE HAS BEEN LAUNCHED
The government has developed the liquidity decree, which should soon result in various guarantee funds for small and medium-sized enterprises. But a political clash took place over the measure: Minister Gualtieri wants to entrust the management of the funds (200 billion of leverage effect) to Sace, the Five Stars have arisen to protect the CDP.
Meanwhile, the executive is speeding up the time to extend the golden power, i.e. the executive's power to block operations or transfers of ownership and control relating to companies considered strategic, which will also concern the food, financial, insurance and health sectors. The rule will also be applied to operations within the EU.
“THE CURVE OF THE CORONAVIRUS BEGINS TO FLEX”
According to data from the Civil Protection, between Saturday and Sunday the number of people currently positive for the coronavirus in Italy increased by 2.972 people. The new deaths in Italy were instead 525, the lowest increase since last March 19th. The president of the Higher Institute of Health, Silvio Brusaferro, explained that “the curve has begun to descend. If these data are confirmed, we will have to start thinking about phase 2".
HIGHWAYS, ALLIANZ
There is no lack of space for financial maneuvers favored by the emergency. Atlantia remains in the spotlight. The market takes for granted the descent of the Benetton holding into Autostrade per l'Italia. The most probable solution is the one that passes through Cdp and F2i, but the alternative of the transfer to a consortium led by Allianz takes shape, however contested by the League. Il Carroccio will be the godfather of the forthcoming marriage between A2A and the Veneto utilities of Verona and Vicenza.
TOWARDS THE MANDATORY TAKEOVER OFFER ON GEDI, THE LEVI'S ACCOUNTS
Exor has completed the process for the purchase of the Gedi shares held by Cir. The transfer of the package, equal to 43,87% of the share capital (0,46 euro per share equal to a countervalue of 102,4 million), will be completed on 23 April. Subsequently, reads a note, "Exor will proceed, through a newly established joint-stock company, to promote a mandatory takeover bid on outstanding shares not held, at 0,46 euro per share".
To follow in the US the quarterly of Levi's Strauss, a sample of the damage caused by the breakdown of the production chain in China in recent months.
