A "historic" agreement according to Donald Trump. A truce in a conflict destined to last, according to the most skeptical commentators. In any case, after 18 months of conflicts, the US and China have signed an agreement on "phase one" of the trade war. Beijing pledges to purchase $197 billion worth of American goods over the next two years. In return, the US loosens its grip on Chinese imports, refraining from triggering duties on the last tranche of goods left free as of Sunday 19 January. “Now Trump will hit Europe,” warns Lawrence Summers, former Democratic Treasury secretary. And this fear explains at least in part the uncertainties of the European markets, where there is a return of attention to bonds.
Even the Asian markets are not showing particular enthusiasm: the CSI index of Shanghai dropped 0,3% this morning. Little moved in Tokyo the Nikkei (+0,14%), as well as the Asia Pacific index.
BOFA AND GOLDMAN SACHS SET THE PACE
Why so much caution? According to critics, the 86-page agreement says nothing about the hottest chapters in the confrontation between the two giants, from the "theft" of technology to industry subsidies that Beijing will continue to practice on a large scale. Even so, the agreement, celebrated by Trump with an interminable speech/rally in front of an exceptional audience (Henry Kissinger was also there) really has a historical flavour, as witnessed by the jump in the Dow Jones (+0,31%) which it broke the 29.000-point barrier for the first time. Overall, however, Wall Street's reaction was tepid: the S&P 500 limited the increase to 0,19%; the Nasdaq (+0,08%) limited itself to reiterating Monday's progress.
Quarterly reports have taken care of curbing the bull's impetus: Bank of America -1,8%. The forecast of low rates compensated for the good results. Weak Goldman Sachs (-0,2%): the robust provisions for legal expenses that the bank will have to bear to deal with the banking scandal in Malaysia practically absorbed the profit for the quarter.
The US economy grew modestly in the last six weeks of 2019, the outlook remains "moderately favourable" in the short term, with consumption rising at a rate between "modest and moderate". The Fed explained it in the usual Beige Book, the report on the state of the economy which will form the basis for the decisions of the central bank at the next meeting.
OIL RECOVERY, BEIJING WILL REFUEL IN USA
Oil recovering: Brent and Wti rise by almost a percentage point. The EIA (Energy Information Administration) announced yesterday that inventories in the United States decreased by 2,55 million barrels last week, against estimates of an increase of about 0,4 million barrels. The API had anticipated a growth of 1,1 million. On the other hand, gasoline inventories increased by about 6,7 million barrels, on the highest levels for 12 months.
China has pledged to buy more crude oil, liquefied natural gas (LNG), liquefied petroleum gas (LPG) and petrochemicals.
GERMAN GDP HOLDS DOWN, LESS INFLATION IN THE UNITED KINGDOM
Futures on European stock exchanges anticipate a slightly higher start. Stock lists did not find great reasons to celebrate yesterday.
November industrial production in the euro area grew by 0,2%, slightly below expectations at +0,3%, and the figure for the previous month was revised downwards to -0,9% from -0,5 %.
Worse than expected, Germany's GDP grew by 2019% in 0,6, down from +1,5% in 2018. The German economy expanded at the slowest pace in the last six years. For 2020, the consensus of economists expects growth of 0,7%.
Meanwhile, the pound weakened against the euro to 0,857 on the effect of inflation data from Great Britain. In December, consumer prices rose by 1,4% year on year, from +1,7% in November, against the +1,7% expected by economists. Last month, core inflation in the UK hit a three-year low. Price developments provide further leverage for the Bank of England to cut interest rates.
The strength of the euro against the dollar at 1,115 contributed to slowing down the market.
IN PIAZZA AFFARI IT'S TOUCH THE BLACK JERSEY (-0,69%)
Piazza Affari is the worst stock exchange: -0,69% to 23.763 points. In the rest of Europe: Frankfurt -0,22%; Paris -0,14%; Madrid -0,24%; London +0,27%.
Moscow +0,09%. Change so that everything remains as before. The Leopard recipe was adopted by Vladimir Putin, the undisputed tsar of Russia for twenty years. The president yesterday announced the changing of the guard between Prime Minister Dimitri Medvedev and the unknown Mikhail Mishustin, colorless head of the Revenue Agency. Putin has also anticipated a revision of the Constitution that will allow him to remain in the saddle after 2024.
FEVER EXPLODES FOR THE BTP 30: YIELD AT 2,5%
Eurozone bond prices rise. The yield on the 0,21-year German Bund falls to -0,17% from -164% yesterday. In closing, the spread stood at 160 basis points from XNUMX yesterday.
But the Italian Treasury securities were especially in the spotlight. The placement of the new thirty-year BTP was successfully closed. Orders have arrived for over 47 billion euros. The new 30-year BTP launched via syndicate will have a yield of 2,50%, reads a statement from the Treasury: "The bond was placed at a price of 99,280, corresponding to a gross annual yield on issue of 2,50% ”.
ATLANTIA SUFFERS. THE COMPANY OFFERS RATES CUT
In Piazza Affari the negative notes prevail. The most out of tune concerns Atlantia (-2,6%), at the mercy of the uncertainties about the motorway concession. The thesis that the government intends to proceed with the revocation takes hold. In that case, writes Equita, a legal dispute with the government is likely which "could be very long and with significant risks for Atlantia". An Autostrade per l'Italia board meeting is expected today on the new industrial plan to 2023, while a board meeting of Atlantia will be held tomorrow. According to sources quoted by Reuters, the holding company is ready to reopen negotiations with the government to discuss a reduction in motorway tolls in an attempt to avoid the revocation of the concession.
WEAK TELECOM, BANKS ALSO SUFFER
The trickle of sales on Telecom Italia continues (-1,8%), in the absence of news. Suffers Pirelli, which yields 1,2%. The decline adds up to the -3% charged on the eve of the downgrade of Ubs to 'neutral' from 'buy'.
Salvatore Ferragamo loses shot in luxury (-2,37%) after Main First lowered the judgment to hold from buy. On the contrary, the advance of Moncler continues (+2,72%) rewarded by Deutsche Bank.
The banks are also weak: Unicredit -2,6, Intesa -1,15%, Ubi Banca -2%. The company has signed an agreement with the unions regarding the voluntary exit of around 300 employees. Charges of 70 million euros gross (50 million net) are expected to be recognized in the fourth quarter of 2019. Moody's has assigned a B2 rating to the 400 million subordinated bond.
Nexi +0,9%. Barclays raises the target price to 14 euros, from 10,7 euros.
INVESTMENT OK FOR BANCA GENERALI, TERNA AT HIGHEST
There was no shortage of asset management purchases, starting with Banca Generali (+2,1%), awarded by the results of the December harvest, equal to 614 million euro, of which 388 million in management products. Poste Italiane flat (+0,05%, to 10,065 euros): Goldman Sachs improved its target price to 13,5 euros (rating buy).
Unipol loses hits (-2%). Nexi +0,9%. Barclays raises the target price to 14 euros, from 10,7 euros.
Terna achieved a rise of 0,86%, thus reaching a new all-time high, at 6,1 euro per share. Furthermore, both Intermonte and Bernstein have raised the target price of the company led by Luigi Ferraris by including Terna among their favorite stocks in 2020.
Txt e-Solutions loses 4%. Shareholder Alvise Braga Illa placed 1,2 million shares, equal to 9,23% of the share capital, at a price of 9 euros each: countervalue, 10,8 million euros. Braga Illa remains a shareholder with 4,79%.
