Nothing or almost nothing new on the Covid-19 front. Positive news, from the drop in infections to the reopening of businesses, is multiplying around the planet starting from New York. But the contagion returns to Wuhan, where it all began, and to the White House, where only Donald Trump does not wear a mask. The price lists reflect the uncertainty, fueled by the new bursts of accusations between the US and China on the origin of the pandemic.
Stock exchanges in the Asia Pacific area are down, after the controversial closure of Wall Street, while the world is slowly and cautiously emerging from the pandemic.
HONG KONG IN RED, S&P FLAT
The Nikkei of Tokyo loses 0,1%, the Hang Seng of Hong Kong 1,7%, the CSI 300 of the exchanges of Shanghai and Shenzen 0,4%, the Kospi of Seoul 0,4%.
The Sydney Stock Exchange is down by 1,4%, also due to the fear of the stop on imports of Australian beef. Speaking of meat, US farms are suffering, because the contagion has hit American slaughterhouses very hard. The situation is made worse by the boom in exports of pork and cattle to China, foreseen by the agreements on tariffs.
Last night on Wall Street the S&P500 closed on parity, Dow Jones -0,45%. The Nasdaq gained 0,8%.
Futures anticipate a downward start of about half a percentage point.
FROM TODAY THE FED BUYS ETFS TO SUPPORT COMPANIES
The economy suffers, the stock market holds. As the Wall Street Journal noted this morning, "the disconnect between the stock market and the economy is increasingly evident." Nothing new, because "it has been at least ten years since the Stock Exchange stopped reflecting the trend of the economy", writes the New York Times this morning, underlining the resilience of shares in the face of the collapse of employment. In reality, the markets reflect the ongoing change of values and powers. Central banks, led by the Fed, are displacing private investors, large and small. From today, the US central bank will buy ETFs with underlying bonds issued by companies, a program announced in early March, along with other measures to support the corporate world. In a few days, the credit line that should allow the New York Fed to start buying bonds on the primary market should be ready. It will not be the Central Bank that will operate on the two markets, but a special vehicle sponsored by the Treasury, through an injection of capital: a first tranche of 37 billion dollars has already been paid to get the machine going. Overall, the law passed by Congress last month allocates $454 billion to the Federal Reserve as initial funding to deal with financial market crises.
BLACKROCK MARKET DIRECTOR
This scenario includes the change of assets in BlackRock, the most important capital manager on the planet, to which the Fed has entrusted the task of managing its operations on the market. Last night the Pittsburh bank PNC, which held 22% of the management giant, sold a large part of its stake on the market, partly acquired by BlackRock itself.
Brent Oil, down 4% yesterday, was little moved this morning, at 29,7 dollars. The new change of course by Saudi Arabia weighs heavily and, after having flooded the crude oil market to sink Russia, announces a sharp cut in production.
ITALY, LEGEND INDUSTRY IN EUROPE
Closing below parity yesterday for almost all European stock exchanges. The stocks of the Old Continent are divided between optimism fueled by the easing of the lockdown measures and pessimism justified by the macro data, expected but no less heavy: Italian industrial production it recorded a 28,4% economic downturn in March, much worse than what was recorded in the main European countries (France -16%, Spain -12%, Germany -9%). And so the initial relief at Moody's failure to fail gradually faded away.
ARCELOR MITTAL SINKS IN PARIS (-16%)
Piazza Affari limited the losses to 0,33% in the final, at 17.381 basis points.
European lists close down. Male Paris (-1,31%): ArcelorMittal plunged by 16,2% after announcing a capital increase of about 2 billion dollars. Furthermore, the rating agency S&P Global Ratings lowered the outlook on the rating to "negative" to reflect "continued pressure due to weak market conditions". Stocks in the aviation sector are also under fire: Air France-KLM lost 3,32%, Airbus 2,8% and Safran 3,23%.
A BOND FOR DEUTSCHE BANK, RYANAIR LOSES 7%
Frankfurt -0,74%. Lufthansa left 1,83% on the ground. On the German list, however, Wirecard (+8,33%) stood out after the announcement of the exit of number one Markus Braun. Weak were Deutsche Bank (-2,63%), which announced the issue of a tier 2 bond worth around one billion, and Commerzbank (-1,26%), which renounced the sale of the Polish subsidiary mBank.
The big banks push Madrid downwards (-1,58%): Banco de Santander -2,93, BBVA -2,82%.
Only London was saved (+0,06%), despite the cold shower on the airlines: travelers arriving in the United Kingdom will have to face a quarantine. Easyjet lost 5,91%, Ryanair 6,97% and IAG 2,89%.
THE SPREAD RISES, TODAY THE AUCTION BOT
The collapse of industrial production also weighed on the bond market on the eve of the mid-month auctions and the launch of the next Btp Italia next Monday.
Despite a recovery in the final, the spread closes at 241 against 233 on Friday. The ten-year rate stood at 1,89%, against 1,8% in the previous session.
In the meantime, the ECB continues to buy securities on the market: last week Frankfurt bought bonds for about 44 billion euros (34 under the Pepp programme), about double the 22 billion of the previous eighth.
Attention is now focused on auctions. Today the Treasury will make 10,5 billion euros available between annual BOTs and flexible BOTs. Tomorrow will be the turn of 4 BTPs offered for 7,5-9 billion.
CANNITA: BTP ITALIA WILL AWAKEN RETAIL DEMAND
“The planned issuance of Btp Italia aims to stimulate retail demand, which has weakened over time also due to the extremely low level of yields”, explained Maria Cannata yesterday, president of Mts but for many years manager responsible for the Treasury for the public debt. "In moments of high political conflict - he said speaking at Milano Capitali 2020 - Italian families behave like foreign investors, as happened in the case of the Btp Italia issue at the end of 2018, which frankly went badly due to the controversy over the budget between the government and the European Commission".
PHARMA TITLES FLY. THE FT INTERVIEW PINK (DIASORIN)
In Piazza Affari, pharma stocks lengthened their pace: Recordati +6,28%, to a new all-time record. Diasorin +4,03%. On the eve of the results, CEO Carlo Rosa illustrated to the Financial Times the possible advantages of the coronavirus test the Saluggia-based company is working on, which has won supply contracts in Belgium, Germany and Israel, but not in Italy, where the Abbott was preferred. Since the beginning of the year, capitalization has risen by a third, to 8,7 billion euros.
FINECO STRETCHES, LEADING THE EUROSTOXX BANKS
In the spotlight too Finecobank (+3,22%), which closed the first quarter with a net profit up 45,4% compared to the same period of the previous year. The institute thus confirms itself as the best stock in the Eurostoxx Banks index since the beginning of the year with a loss of 7%, which compares with the dramatic -46% recorded by the sector average.
The sector's trend was mixed: Mediobanca (+3,35%), Banco Bpm (+1,05%) and Unicredit (+0,53%) rose. In red instead Ubi (-1,25%), Bper (-1,12%) and Intesa (-0,33%).
Out of the main basket, Banco di Sardegna Risp shares leap (+22,66%) on the decision of the bank's Board of Directors to convene a meeting for 30 July to propose the mandatory conversion of savings shares into preference shares with a ratio of 1 to 1.
CAR IN RED, CHEVREUX BRAKING PIAGGIO
The industrialists are bad: Leonardo sold 3,11%, Stm 2,22%.
Cars are down: FCA (-1,76%) and Pirelli (-1,69%) are losing blows. Brembo (-2,94%) closed the first quarter with a net profit down by 53,8% to €29,8 million, and revenues down by 13,7% to €575,9 million. Pininfarina -0,94%.
There was also a sharp slowdown for Piaggio (-5,13%): Kepler Cheuvreux reduced the recommendation from hold (maintain) to reduce (reduce), with a target price of 1,5 euros.
MADE IN ITALY BUSINESS: SALINI IN CANADA, MAIRE IN EGYPT
Some made in Italy spacecraft are on positive ground. Salini +1,46%: Webuild has entered the shortlist for the design and construction in Canada of the 1,15 billion project for the second section of the Valley Line, 27 kilometers long.
Maire Tecnimont has announced the agreement for the construction of an ammonia plant in Egypt.
RISANAZIONE CELEBRATES IN MILAN
Risanamento celebrates with a +11,56% the proposed urban variant of the Milano Santa Giulia project published by the Municipality of Milan.
