The signing of the agreement between Washington and Beijing is set for 17 pm, Italian time. But the controversies are already raging on the real scope of the agreement, on who benefits from it and, above all, on its concrete effects. So many doubts that had the effect of curbing the rise in stock prices, despite the fireworks of JP Morgan, which opened the quarterly season with spectacular earnings.
Asian stock markets are down this morning: in Tokyo the Nikkei drops 0,6%. Hong Kong (-0,9%), Shanghai (-0,6%) and the Korean Kospi were also weak. Only Sydney's S&P ASX200 (+0,3%) bucked the trend.
Yesterday evening on Wall Street, the three main stock indexes closed mixed, after reaching all-time highs in the afternoon: Dow Jones +0,1%, S&P500 -0,15% in the red and Nasdaq -0,24%.
Sale JP Morgan (+1,2%), which recorded rising quarterly profits by 21% to $8,52 billion. For 2019, profits rose to 36,43 billion (+12%).
Citi's quarter (+1,6%) was better than expected, also in this case thanks to the bond trading activity.
Wells Fargo splash (-5,4%). $1,5 billion in legal fees for fake checking account lawsuit
DELTA AIRLINES +3,4% AFTER COUNTS. TESLA SUPERSTAR
Delta Airlines jumped 3,4% after reporting better-than-expected results for the quarter. Adjusted earnings per share came in at $1,7, above expectations at $1,4.
Still new records for Tesla, up 3,5% after +9% on Monday.
DUTIES WILL ONLY DROP IN NOVEMBER, SPARKS ON 5G
Today in Washington, Trump and Chinese Deputy Prime Minister Liu He will sign a first trade agreement between the US and China which will include Beijing's commitment to increase purchases of US goods by 200 billion over the next four years, to open up its financial services market and prohibit theft of technology or intellectual property. But the news that a significant part of the tariffs on Chinese imports could remain in effect until after the US presidential elections is curbing the enthusiasm. The confrontation therefore remains hot, also because there are many doubts about the actual commitments undertaken by the Chinese in matters of imports, from energy to cars. The political significance of an agreement remains which, for now, has the flavor of a truce. But the confrontation, especially on technology (5G and artificial intelligence in the lead) promises to be hot. And this explains the caution of the US Stock Exchange: "With a p/e of 18 times - explains an expert to Reuters - it is natural that the market avoids enthusiasm".
US INFLATION AT LOW, GOLD RECOVERS
On the foreign exchange market, the dollar is once again appreciating against its major counterparts in Asia Pacific.
Bond yields down, 1,80-year to XNUMX% after the weak data on US inflation released yesterday afternoon in line with the recent estimates of the Fed: the hypothesis of an intervention by the central bank is further away.
Gold at 1.553 dollars an ounce, +0,5%.
Brent oil fell by 0,3% to 64,3 dollars, after rising by 0,5% at the close yesterday evening. At Piazza Affari Eni -1,2%. Saipem -1%, Tenaris -2%.
TRUMP PULLS SWITZERLAND'S EARS
The European stock exchanges wandered yesterday without a precise direction, waiting for signals on the tariff front. Not even the indications coming from the first US quarterly reports have shaken the markets from the climate of uncertainty to which the news that Switzerland, together with Germany, has been included by the US Treasury in the list of countries accused of manipulating the exchange rate to favor the competitiveness of the own export. It is a sign, argues State Street, that Donald Trump, once the peace process with Beijing has started, has chosen a new enemy to engage in battle with, the government strategy that is most congenial to him. Hence a climate of expectation, accompanied by the partial recovery of the bond markets. To find a more choppy trend, it was necessary to go to the borders of Europe: the Istanbul Stock Exchange closed up for the sixth consecutive day, arriving close to the historical highs.
Milan closed with a slight increase: +0,13% at 23.928, recovering from the lows of the morning (-0,6%).
Similar trends for the other markets: Frankfurt, Paris and London show minimal variations. The EuroStoxx 50 index closed at -0,1%, from the initial -0,7%.
GREEN EUROPE TAKES OFF: 1.000 BILLION AGAINST CO2
In the meantime, the European Union is taking its first steps on the green economy front: the European budget commissioner Johannes Hahn yesterday illustrated a trillion euro plan to eliminate net C02 emissions by 2050, favoring the transition of dependent countries from coal.
The Green Deal, approved in the plenary session of the European Parliament, will leverage EU financial instruments to mobilize public investments and private funds for 300 billion euros, an effort necessary "to avoid a climate crisis", said Hahn. Of the trillion in the ten-year plan, about half should come from the EU's long-term budget, over one hundred billion will have to be co-financed by governments.
PLACED 6,75 BILLION BTPs
The Italian Treasury announced last night the launch of a 30-year BTP issue which will be placed today through a syndicate. The operation, already mooted in recent days, comes at a propitious moment: yesterday the new 10-year Spanish 10 billion euro received orders in excess of 53 billion.
The Italian Treasury has placed 6,75 billion euros, the maximum of the range offered, in the reopening of 3, 7 and 20-year BTPs.
Yields on the two longer-maturity bonds saw yields rise – especially the 20-year – to the highest levels since July and June 2019.
The spread closed at 160 basis points against 159. The ten-year rate settled in the 1,39% area, unchanged from the previous closure.
The yield on the 0,17-year Bund moved little at -XNUMX%, on a seven-month high.
UBS PUNISHES PIRELLI, RECOVERS PRYSMIAN
Modesti in movement in Piazza Affari. Worth noting is the plunge of Pirelli (-3,12%), affected by the rating cut by Ubs. Ferrari still rises (+0,4%), weak FCA (-0,5%).
Prysmian, on the other hand, recovered (+1,38%): yet another setback recorded by Western Link, the cable that connects Scotland, Wales and England is less serious than expected.
The brightest blue chip was Moncler (+1,94%).
ATLANTIA TOWARDS THE REVOCATION OF THE CONCESSION
Atlantia continues to suffer (-0,6%). According to "La Stampa" the Government has now chosen to revoke the concession granted by Autostrade per l'Italia: this will be discussed at the Council of Ministers on Friday. S&P has downgraded the short- and long-term ratings on the holding company and ASPI to 'BB-/B' due to the "increasing risk" of concession revocation.
In terms of banks, Banca Mps is back on the rise (+4,91%) which is getting closer to the values recorded on Friday with a leap of 19,7%. Rise from the Guinness Book of Records for Banca Intermobiliare (+31,36%), suspended for most of the session. Banca Ifis was also positive, but below the highs recorded after the announcement of the business plan. In managed business, Azimut shines (+1,5%). Nexi also rose (+1,3%).
ACEA AT THE HIGHEST SINCE 2000
Acea (+3,7%) rises to the highest level since 2000. Raiway weak (-0,5%): Morgan Stanley raises the target price to 6 euro, from 5,6 euro.
Casta Diva (+18,36%) and Agatos (+18,7%) fly to Aim Italia. Saicef, the second company by market capitalization, rose by 2,68% in the wake of the news that the group companies signed contracts in the last part of 2019 for around 73 million euros, relating to work to be carried out in 5 countries : Austria, Germany, United Arab Emirates, Switzerland and Norway.
