The dollar rises, raw materials fall, including gold. The signs of deflation are multiplying, but the Stock Exchanges, trusting in the intervention of the central banks, remain at their maximum. Hence the attention for the key event of the week: the ECB summit on Thursday 4, but also for Janet Yellen's speech tomorrow, which will be followed on Wednesday by the publication of the Beige Book on the state of health of the US economy.
The situation is the same in China: the Dragon's economy continues to slow down, reports the HSBC PMI index (from 50,4 to 50,3, just above the boundary between growth and recession). Above all, the state of health of SMEs is worrying, unable to repay the debts contracted with shadow finance. Hence the market's belief that the central bank will soon intervene again.
Hence the boom of the Shanghai Stock Exchange +0,73%: since the day of the rate cut, the rise is close to 9%. Tokyo also rose (+0,68%) favored by the decline in the yen.
Gold falls -2% to 1242 dollars an ounce after the victory of no (77%) at the Swiss referendum in which the central bank was asked for the obligation to increase the gold reserves to 20%. Oil starts the week at its lowest level since the beginning of 2009. Copper is also down, hit by the decline in Asian demand.
Even the start of the European session will be conditioned by the publication of the PMI indices, based on business purchases. Istat will publish the final data of the Italian GDP for the third quarter this morning. But the most awaited appointment for the Bel Paese is scheduled for Friday: S&P, with the Stock Exchange closed, will update the rating on Italian debt.
THE BUNDESBANK INSISTS: EUROPEAN QE IS NOT USED
“Despite the drop in inflation, I don't believe that the large-scale purchase of sovereign bonds will be effective in the Eurozone: financial innovation must not be a taboo, but neither must it be an end in itself”. Four days after the ECB meeting, the German member of the directorate, Sabine Lauterschlaeger takes sides against the innovative measures floated by Mario Draghi.
Thus the road ahead for the president of the ECB is looming uphill in view of the key event of the week: the last meeting of the European Central Bank of 2014, the first to be held, after the move from the Eurotower, on the 41st floor of the new, prestigious headquarters in Ostend, formerly a bad neighborhood, today the financial center of Europe: 45 floors, 185 meters high, two towers that will host 2.600 people in a structure heated by solar energy and equipped with fitness rooms.
The predictions are open: the new drop in inflation suggests the arrival of expansionary measures, already anticipated by the fall in interest rates and the weakness of the euro. Therefore, the markets are expecting Draghi on Thursday to go so far as to confirm QE as early as the first quarter of 2015, as demonstrated by the drop in government bond yields: The 10-year BTP closed the week at an all-time low of 2,04% (spread at 133).
But there is no shortage of objections: a new cut, given current levels, will bring little benefit while it will aggravate the problems of pension funds and savers, bringing new arguments to the front of German Eurosceptics.
ILO, THE ARAB EXCHANGES ALSO COLLAPSE. ENI HUNTING FOR A REBOUND
OPEC's decision not to reduce production has turned out to be a boomerang for the Arab Stock Exchanges: the market of Riyadh loses 4,8%, Dubai 4,7%, Abu Dhabi 2,6%. Oman (-6,2%) and Qatar (-4,3%) also collapsed.
After last week's crash, many analysts believe a (modest) rebound in oil stocks is possible, even if the markets have yet to assess the consequences of the earthquake that hit the energy world: -40% in crude oil prices since June; a transfer of wealth from producers to consumers in the order of 400 billion dollars; the cut of investments in the order of 100 billion dollars; the domino effect on the junk bond market, in which the energy sector accounts for 16% of the total.
Exxon lost $16,3 billion in capitalization on Friday. From June's quotations, the loss of the US giant is in the order of 60 billion dollars. In Milan, Eni lost 2,7% on Friday. During the week, the drop was 6,5%. Things went worse for Saipem -5,4% and Tenaris -4,3%. Both stocks have fallen by 13,8% in the last five sessions.
AIRLINES TO THE RESCUE. AT THE TOP AUTOGRILL AND WDF
Positive notes instead for stocks related to the travel sector. Air France +5,5% and Lufthansa +4,4%, Easy Jet +1,8% rose on Friday. In Milan Autogrill +1,4% (+12% in November) and World Duty Free +1,2% (+15% in the month) rose.
BITTER CHRISTMAS FOR US CONSUMPTION
In addition to the decline in oil stocks, today Wall Street will have to deal with the negative start of Christmas sales: on Black Friday, the traditional start date for year-end purchases, 50,9 billion dollars were spent against 57,4 .XNUMX billion a year ago. The fall has involved both traditional commerce and online sales. The large commercial chains, from Wal Mart to Macy's, but also Amazon and e Bay are under fire.
POSITIVE NOVEMBER FOR THE STOCK EXCHANGES: FED INCREASE FURTHER
Against tradition, this time November turned out to be a positive month for the stock exchanges. Wall Street and Mumbai have touched previous all-time highs. Frankfurt and London brought them closer together.
Shanghai has pushed to the new records of the last three years: yesterday the Chinese Stock Exchange surpassed the Tokyo Stock Exchange for total capitalization, becoming the second world stock exchange. November was the seventh consecutive positive month, with an 11% increase.
The Nasdaq +3,4%, S&P500 +3%, Sensex (India) +3%, Bovespa (Brazil) +0,8% also grew significantly. Despite the drop in the Energy sector (-5,75%) on Friday and the disappointing macroeconomic signals, Wall Street remains at its highs. The slowdown in the economy strengthens those who predict that the next meeting of the Fed, the last one in 2014, will confirm that the rate hike is still a long way off.
As far as the Old Continent is concerned, here too the balance is positive, but with very different performances between individual markets. Leading the race is Frankfurt (+6%) followed by Paris (+3%), London and Madrid both +2%. In November, the stock exchanges of the old continent achieved an average rise of 3,1%, the highest since February. Compared to the June highs, the Eurostoxx index narrowed the decline to 0,7%.
Piazza Affari is satisfied with a monthly increase of 1%. Between November 24 and 28, the FtseMib gained 0,3% to 20.015 points. As a result, the index has gained 2014% since the beginning of 5,5.
YOOX, MEDIASET AND FERRAGAMO AT THE TOP
Among the 10 best stocks of November, Yoox +28% stands out (however reduced from a drop of 60% since the beginning of the year), Mediaset +21% and Salvatore Ferragamo +16%. Followed by Wdf +15%, FCA +13% and Autogrill +12%. Stm +12%, Buzzi +11%, Atlantia +8% and Finmeccanica +7% complete the list. In the last place of the worst is Tenaris -14%. At the bottom of the ranking also Saipem -7% and Eni -5,5%. Black month also for the Popolari: Bper -6%, Banco Popolare -4% (Blackrock dropped from 6,1 to 4,9%) and Ubi -3%. Weak Enel -5%, paying for the revision of the regulatory framework Terna and Snam. Campari -3%.
TELECOM-VODAFONE DUELING FOR METROWEB
In the spotlight the tug of war around the fate of Metroweb, the subject of an offer from Telecom Italia (+1,6% on Friday). Vodafone, while engaged in the acquisition of Liberty Global and in sports rights at European level, does not intend to give way: with a tough letter to the Antitrust, it anticipated legal initiatives in the event Metroweb's shareholders proceed with the sale of the fiber company to the competitor Telecom Italy. Meanwhile, the Brazilian dossier dedicated to the possible marriage between Tim Brasil and Oi is coming to life.
