On the eve of the Fed meeting, US finance updated two Guinness records. The dollar basket, ie the quotation of the US currency against the main currencies, rose to 103,72, the highest level since 2002. The euro, in particular, fell below 105, the lowest level for five years. But against the yen, the quotation is that of the beginning of the millennium, and the ascent against the yuan continues, well below quota seven.
Student debt and mortgages are seriously suffering
The second record is even more significant, even on a symbolic level: the yield on the 3,008-year Treasury bond has risen to 2018% for the first time since 2021. A historic blow for US paper holders, if one considers that at the end of 1,496 the yield (inversely proportional to market value) was XNUMX%. A figure with a particular political flavor, given that the value of mortgages or student loans is calculated on the ten-year basis, a dangerous mine for Joe Biden, who will have to face the knot of university debts by November.
In short, even before the official announcement of the half point increase in the cost of money and, even more feared, of the start of the cuts to the Bank's balance sheet, the markets signal that a complicated game is opening, with an uncertain outcome. But Wall Street, after Friday's disaster, took it well. Asia appreciates export support. Europe as well, but it has no illusions: the embargo on Russian energy will have a very high price, is the message coming from Berlin.
Asia on vacation, fake news about Jack Ma scares Alibaba
Few squares are open today in the East. The financial markets of China, Japan, Singapore and India are closed for holidays. The Golden Week also limits trading on bonds.
Hong Kong rises (+0,2%), Taipei loses 0,5%. Seoul gains 0,3%. Sydney S&P ASX200 index unchanged ahead of Reserve Bank of Australia rate announcements.
Alibaba's shares lost 9% after state television announced Ma's detention in a correspondent from Hangzhou. The correction came only a few hours later: the detained is not Jack Ma, the founder of the Internet giant .
In Beijing, you can't go to a restaurant or gym until tomorrow.
Meta leads the recovery of the Nasdaq
Wall Street futures are up slightly following a very eventful session; thanks to a final surge, the Nasdaq closed up 1,6%, S&P 500 +0,6%. Dow Jones +0,3%. The future of the EuroStoxx 50 index is up 1% this morning.
Nvidia and Meta led the tech rally with more than 5% gains. About half of the 500 companies in the most popular index presented data showing average earnings growth of just over 7%, better than estimates.
WTI oil down slightly to $105 a barrel. Brent at $107. Gold moved little at 1.863 dollars an ounce, on the lows of the last two and a half months.
A flash crash over Stockholm sinks the markets. You quote: the fault is ours
The twist occurs shortly after 10 in a mixed session: the index has come to lose almost 4% for a few moments in what the operating rooms define an "air pocket" caused by a series of incorrect orders on the Stockholm list (-8% in a few minutes) already agitated by the news of a Russian air raid in the Scandinavian skies. The wrong order was sent from London by a Citi operator who admitted the mistake and limited the consequences. The flash crash soon subsided but contributed to worsening the climate of a session dominated by several negative factors: the sudden slowdown in China, the expectation of a US rate hike, the bad news from the Ukrainian war front.
Confidence in Europe is falling. Italy at its lowest since June 2020
Macro data is not helping either: the PMI index of purchasing managers in the German manufacturing sector drops to 54,6 points in April (from 56,9). The numbers for Italy (54,5 points against 55,8 in March, to their lowest since June 2020) and for the entire eurozone (55,5 against 56,5) are also slowing down, albeit less. The higher-than-expected decline in operator confidence (105 points from 106,7) is also not surprising.
The spread rises, Btp records at 2,85%
The rush of US T-bonds, which broke the 3% barrier on the eve of the FOMC meeting, also put pressure on Eurozone bonds.
The Btp secondary market is tense in the late afternoon. The ten-year bond hits a maximum at a yield of 2,85%, a record since March 2020. The spread widens up to 188 points. The Bund trades at its highest since 2015 at +0.96%. Investors are eyeing the Fed meeting, but also the Bank of England policy meeting on Thursday, which is likely to raise rates by 25 basis points.
Milan -1,63%, 200 euro bonus on wages
In this context, Piazza Affari falls by 1,63% and slips again below the psychological threshold of 24 points to 23.857.
The government has decided to extend the cut in excise duties on fuel and natural gas until 8 July. A second provision, with a value of 14 billion euros, provides for a one-off bonus of 200 euros for incomes under 35 thousand euros and subsidies for businesses. The tax on extra profits from gas and oil reaches 25%.
Employment rate at highest since 2004
In March the employment rate in Italy has reached 59,9%, a record since 2004, when the historical series began. Unemployment, at 8,3%, is back to 2010 levels. But it is above all fixed-term contracts that are growing.
A real estate scandal shakes Frankfurt (-1,11%)
Deep red also for the other price lists. Frankfurt dropped 1,11%, an acceptable result given the earthquake in the real estate sector. The Adler Group plunged 40%, for a sixth consecutive sharp decline and shares at historic lows, after announcing a loss of 1,18 billion euros over the weekend which auditor Kpmg refused to certify. Bafin, the German Consob, has turned on a beacon and has made it known that it is analyzing the movements of the share before Saturday's announcement. The entire board of directors has tendered their resignations. Adler - which owns a real estate portfolio of about 10 billion - has issued bonds for 4,5 billion. The company was sued for fraud by the Viceroy fund, for the valuation of some assets.
Paris records a loss of 1,66%. The fashion stocks lose ground: Kering -2,3%, Lvmh -2%, Hermès -3,4. Madrid -1,69%. Amsterdam's budget is heavier: -2,33%.
The dividend cut weighed on the STOXX 600 (which is down about 8,5% year-to-date) with automakers such as Mercedes-Benz, Bayer, auto parts maker Continental and chemical group Basf becoming less attractive. Outside the lockdown area, London remained closed for public holidays.
Only Mediobanca runs, the Generali challenge continues
Mediobanca stands out among the few stocks bucking the trend (+2,16%). Not only because the quarterly report of the subsidiary CheBanca shines! (net profit in the nine months + 28%) or for the buy of Equita (buy recommendation and the target price at 12,8 euros). The attention for the institute led by Alberto Nagel can also be explained by the climate of battle that still surrounds Generali (-0,83%) after Friday's shareholders' meeting. Yesterday evening the Leone board of directors confirmed Philippe Donnet as CEO with 10 votes in favour, against the 3 directors on the Caltagirone list.
Losing blows Unicredit (-2,8%) and Intesa (-1,7%)
In April less than 100 cars in Italy. Stellantis -3,02%
The auto sector is down in line with the slowdown in the sector in Europe (-2,7%). In Italy, less than 100 cars were sold in April (97.339 -32%). Worse is Stellantis (-3,02%) which sold 41% less. Cnh is also down (-1,20%) despite the sale of Raven Engineering acquired a year ago for 350 million dollars. Pirelli -2,76%.
In red Stm and Prysmian. Black jersey in Tenaris
Stm was also heavy (-2,53%) on the wave of the decline of the Nasdaq and the news that Apple is studying a system to avoid the use of chips. Down Prysmian (-3,75%).
Sharp declines in the oil sector. The black jersey for the day belongs to Tenaris (-3,85%); Eni, Maire (-2,6%) and Saipem (-1,4%) were also weak.
Diesel makes Saras fly: +70% since January
Against the trend, Saras (+5,7%) continues its rally (+70% since January) thanks to the increase in refining margins on diesel. Italgas is in positive territory (+0,16%) after the results of the first quarter.
