The minutes of the latest meeting of the Federal Reserve Select Committee, released yesterday at 20 pm Italian time, showed that the central bank is preparing to open its protective umbrella. The so-called "minutes" contain the word "patience", a magic word for the markets, a term already used last Friday during an event by Governor Jerome Powell; however, that word was missing from the statement released at the end of the FOMC meeting on December 19th.
The central bank "can afford to be patient" on further normalization of its monetary policy, the minutes said. Meanwhile, three regional central bank presidents reiterated their caution ahead of new rate moves. Indeed, the president of the Atlanta Fed, Raphael Bostic, declared that the next move by the central bank of the United States could be upwards or downwards, a stance that opens the door, or rather opens it wide, to rate cuts. Now the ball passes to chairman Jerome Powell who will speak tonight after the stock market is closed.
CHIPS AND APPLE PUSH WALL STREET
Also cleared on the tariff front, after the return of the US delegation from Beijing. Donald Trump, engaged in a clash for now with no outlets with the Democrats on the Wall on the border with Mexico (tomorrow 800.000 civil servants will not receive their paychecks) wants to reach a closure of the agreement as soon as possible, in order to help the rebound of the stock exchanges. Even China seems to want to tighten and in the meantime announces stimulus measures, including the introduction of incentives for the diffusion of the private car.
The US markets are on the rise: Dow Jones +0,39%, S&P +0,41%, Nasdaq +0,87%.
Back to rise Apple (+1,7%) together with the chip sector.
DIVORCE OF THE CENTURY AT AMAZON HOUSE
Little move Amazon (+0,17%). Jeff Bezos and his wife MacKenzie have announced the divorce of the century. After 25 years of marriage (4 children) the two separate. And MacKenzie is about to become one of the richest women on the planet.
The oil rally has subsided, pushing in the last few hours to the highs of the last month and a half: Brent crude is traded at 60,9 dollars a barrel, down 0,7%, yesterday, also due to the decrease in inventories strategic markets, closed up nearly 5%.
The oil and oil service sector performed well in Piazza Affari: Saipem +3,42%, Tenaris +2,98%.
Eni +0,92%. Berenberg raised the rating to buy from hold, cutting the target price to 17,6 euros from 18,5 euros, while Morgan Stanley confirmed the underweight rating by reducing the target price to 14 euros from 14,6.
THE DOLLAR HOLDS UP THE YUAN RISES
After the mini rally at the beginning of 2019, the stock markets could allow themselves a break in the face of the slowdown in the dollar which fell to 1,155 against the euro, its lowest since October.
In fact, the Japanese stock market is holding back, down by 1%, after three straight days of gains, while the dollar weakens against the yen.
The Chinese yuan, on the other hand, strengthened to 6,79 against the US currency, a level it has not reached since this summer, even if data released tonight by the Institute of Statistics of China signal a sharp slowdown in economic growth. Consumer prices rose in December by 1,9% year on year, against the +2,2% in November and the +2,1% expected by economists. Producer prices recorded the weakest positive change since the end of 2016: +0,9% year on year: economists expected +1,6%.
The Shanghai Stock Exchange, reassured by the successful outcome of the first round of tariff negotiations between Washington and Beijing, is up 0,1%. Hong Kong is on par after four consecutive days of growth.
EUROPE IN RALLY, CLOUDS ABOUT BREXIT
The European stock exchanges extended the streak of increases in 2019, snubbing the alarm signals on the slowdown in the economy and on the clouds that are gathering on the political horizon starting, in chronological order, from Brexit. Yesterday the British Parliament inflicted a new defeat to Theresa May: if, as is probable, next week the exit plan agreed with Brussels is rejected by the Municipalities, the prime minister will only have three days to present a new one. The City, apparently, does not care: the Stock Exchange marks the maximum for five weeks.
To comfort the optimism, however, in addition to the car incentives promised by Beijing, better-than-expected employment data arrived: the jobless rate fell to 7,9%, the lowest since October 2008.
THE STAR INDEX Flies: +8,3% IN JANUARY
Milan participates in the race: the main index rises by 0,94% to 19.179 points. Since the beginning of the year, Piazza Affari has risen by 4,6%, against 3,8% in Frankfurt.
The rally extended to the Ftse Star index, yesterday +1,5%, up 8,3% from the beginning of 2019 +8,3%. Plus signs also for the other markets: Frankfurt +0,81%; Paris +0,84%; London +0,67%. The exception is Madrid -0,25%.
BOT AUCTION TODAY, BTP 15 IS APPROACHING
Two-sided session for the bond market. After an initial part in negative territory, penalized by the rumors about the launch of a new 15-year BTP, the question reared its head in the second part of the session.
The yield of the Btp 10 closed at 2,892%, with a spread of 262 points.
Today the auction of the 12-month Bot will be held, offered for 7 billion. But the real test will come tomorrow, when between 5 and 6,5 billion euros in 3, 7 and 30-year BTPs will be made available to operators.
Also on Friday, but with the US markets closed, the Dbrs pronouncement on the Italian sovereign rating, currently BBB high, with a stable outlook, will arrive.
FITCH: ITALY, POSITIVE SURPRISE
Meanwhile James McCormack, rating manager for the Fitch agency, said he was "positively surprised" by the improvement recorded by Italy.
In anticipation of the 15-year Italian bond, offers of debt securities multiplied. Ireland placed a 4-year syndicated bond for 813 billion. Portugal also placed a 2029-year syndicated bond. And Greece placed XNUMX million euros in thirteen-week bonds. Germany is also on the move, placing the new ten-year contract in February XNUMX, with a declining yield.
According to the Bundesbank, thanks to the low rates made possible by the ECB, Berlin saved 368 billion euros in interest thanks to QE, followed by France with savings of 350,3 billion euros and Italy with 261,5 billion.
CHINA PUSHES FIAT CRYSLER AND STM
Day of bulls for the European auto sector, supported by the news that China intends to support internal demand, favoring the purchase of four-wheelers and household appliances.
In Piazza Affari, Fiat Chrysler shone (+3%), close to an agreement with the US Department of Justice on charges against the software installed on 104.000 US diesel vehicles. In October, the group set aside €713 million to cover potential costs related to the case.
Brembo did even better (+6%). According to Equita, the group derives 11% of its turnover from China (against FCA's 4%). Pirelli (+3%), Cnh Industrial (+1,7%) and Ferrari (+2,8%) were also positive.
The boost to semiconductors on the US market and Beijing's incentives relaunched STM (+5,36%). According to Equita, 15% of the turnover is linked to the sale of semiconductors linked to the automotive and household appliances segment. Yesterday the meeting appointed Giuseppe Notarnicola as president.
TRIA: A MARKET SOLUTION FOR CARIGE
Banks in fractional rise. Unicredit +0,7%: Morgan Stanley has reduced the target price to 15,7 euros from 16 (overweight). Banco Bpm also rises +0,49%. Mediobanca (-0,5%), Ubi (-0,35%) and Intesa (-0,15%) are down.
For Carige, a market solution is "preferable" through the merger with another bank rather than the precautionary recapitalization already adopted with MPS. Economy Minister Giovanni Tria said so.
In the financial sector, the leap of Anima Holding stands out (+7,13%). After the announcement of the treasury share buyback program to service incentive plans and any extraordinary operations.
DoBank also shines (+5,2%): Kepler Cheuvreux raises the rating to Buy.
GENERALI, DEL VECCHIO'S ADVANCE CONTINUES
Leonardo Del Vecchio's advance in Generali continues +0,9%: the industrialist is up 4,19% of the company, up for five weeks. Kepler Cheuvreux raised the target to 17,50 euros, confirming the Buy rating. SocGen instead reduced the target price from 20 to 18,5 euros, confirming the buy.
Of note in the main basket is the advance of Amplifon +5,5% and the pause of Campari -2,4% due to profit taking, after countless records.
FINCANTIERI SETS OUT
Safilo +3,6%. He signed a licensing deal with Levi's.
Fincantieri -3,4% after France and Germany appeal to the EU antitrust to block the purchase of the French Stx. But the Italian group has achieved a great coup: the signing of a contract with Norwegian Cruise Line for the construction of two ships under the Oceania Cruises brand. The value of the order exceeds one billion euros. The order collection in 2018 should have exceeded the amount of 11 billion euros. In 2019, the forecasts are, at the moment, for a further increase of 5,9
Somec (+1,9%) could also benefit from the contract, listed on the Aim: the group specialized in the development and construction of large naval and civil projects relating to glazed enclosures, is up by 2% to 16,1 euros .
Astaldi did well (+4,92%) after the go-ahead from the Rome court for the 75 million euro loan from Fortress aimed at pursuing the objective of going concern.
