The American team turned the Davos meeting into a preview of the Superbowl. Treasury Secretary Stephen Mnuchin, the architect of tax reform, and Commerce Secretary, billionaire Wilbur Ross have wreaked havoc on European defense with broadsides in support of competitive dollar devaluation ("a cure-all for the economy"). and threats of trade war on China (“they started it”). The two thus prepared the ground for Donald Trump, today engaged in a series of talks with the leaders, tomorrow ready to hurl his anathema against globalization. The European fray package, Merkel-Macron-Gentiloni, has already reacted. Today it's Mario Draghi's turn who will probably limit himself to pointing out that the appreciation of the euro slows down the recovery of inflation, but does not change its direction. But Trump's strategy also raises the first concerns in stock market circles.
“It seems to me – comments Giuseppe Sersale of Anthilia – that there are all the characteristics of a policy devoted to trading short-term successes for long-term problems: the ideal conditions for the formation of a new speculative bubble in the next 18/24 months”. Ray Dalio, the founder of the Bridgwater fund, one of the largest in the world, said in an interview with Bloomberg that he expects a decline in bonds the likes of which have not been seen for 40 years.
HOLDING DOWN ASIA, OIL ABOVE 71 DOLLARS
The weakness of the dollar weighs on the financial markets of Asia this morning. The Bloomberg dollar index, based on the comparison between the US currency and the main counterparts in the world, closed the day yesterday down 1% at 89,2 points, the lowest since the end of 2014. This morning we are at 89 points . The euro is traded at 1,2439 against the dollar, the highest since 2014. The Chinese renminbi at 6,32 is the highest against the US currency for 27 months.
Oil prices are also flying, breaking through the 71 dollar barrier this morning. The WTI trades at 66,31 dollars, the highest since 2014. US inventories continue to fall, last week there was a drop of 1,07 million barrels, the tenth consecutive decline.
The Japanese Stock Exchange is starting to close down 1%, while the yen rises to 109,2 against the US currency, from 109,9 yesterday. The sales hit mainly exporting companies, which are more vulnerable to the appreciation of the yen.
China's stock markets are also down. Hong Kong -0,4%. CSI 300 index of Shanghai and Shenzhen stock exchanges -0,6%. Taipei -0,1%.
FALLING THE CHIPS. THUD OF TEXAS INSTRUMENTS
Contrasted Wall Street: modest rise for the Dow Jones +0,16%, slow down S&P -0,16% and Nasdaq +0,61%. Bonds under pressure. The yield on the 2,64-year Treasury Bill is at 2,61%, from XNUMX% the day before.
Semiconductors (-2,3%) are under pressure after the collapse of Texas Instruments – 8,50%. New drop for General Electric -2,66% after the launch of an investigation into irregularities found in the accounts passed by the Sec. IHighlights in the pharma sector Abbott Laboratories +4,20% after the excellent quarterly performance.
ALSO EUROPE IN RED. BUT THE ECONOMY IS PULLING
The marked appreciation of the euro conditioned the European session in the afternoon, already tense due to today's meeting of the central bank directorate. In this context, the weakness of the Old Continent's price lists was taken for granted, despite new positive data arriving from the PMI indices.
- In Piazza Affari, the Ftse Mib index finished trading with a drop of 0,9% to 23.622 points.
- The other markets were also in the red: Frankfurt -1,07%, Paris -0,72% and Madrid -0,44%.
- The worst stock exchange was London: the US currency also loses impact on the pound.
- In evidence at the City the London Stock Exchange title +5%. According to Sky News, activist fund Tci is planning a £15bn takeover of the company that controls 100% of Borsa Italiana.
- Economic data continues to point to strong growth in the European economy. The eurozone's preliminary January composite PMI, compiled by IHS Markit, rose to 58,6 points — the highest figure since June 2006 — over December's 58,1 and 57,9 estimated by economists. “There's nothing wrong with it, it's really strong data. The start of the year is impressive for the eurozone” comments the chief economist of IHS Markit Chris Williamson, adding that if the PMIs remain at these levels, growth of 2018% can be expected for the first quarter of 1. “These data will contribute to (the ECB) restrictive rhetoric.
BTP AT 1,90% ON THE DAY OF THE ECB. 6,5 BILLION BOTS AT AUCTION
A climate of caution yesterday on government bonds in view of the ECB's monetary policy meeting, conditioned by the rise in the euro. Draghi, in a letter to a member of the European Parliament, said that the ECB's 'quantitative easing' has not triggered "statistically significant" movements in the exchange rate: the trend in the currency is "a side effect, certainly not the objective of the Qe purchases".
"The recent strength of the euro will reduce the ECB's core inflation projections by about 0,1-0,2 percentage points," predicted Abn Amro strategist Kim Liu.
After a morning in which the declining BTP showed a slight widening in terms of the spread over Germany on profit taking after the recent rises, a decline in the Bund led to a further narrowing of the spread.
The yield of the 10-year BTP rose to 1,90% (from 1,87%), while the spread with the German 0,59-year, 132.10%. it contracted to 0,45 basis points (-XNUMX%).
The Ministry of the Economy will offer 6,5 billion euros of 6-month BOTs, maturing on 31 July 2018, in the auction next Monday 29 January against a similar quantity maturing.
BANKS, THE ADDENDUM IS LATE, THE FORMER POPULARS ARE BREATHE
Final braking for the banks (index of the sector. 0,48%) after a lively day, marked by the statements of Danièle Nouy, head of Supervision of the ECB: the ECB addendum on bank non-performing loans will be finalized in the first quarter of this year but Frankfurt could delay its application.
The news gave a boost to the former Populars: Bper+2%. Kepler-Cheuvreux strengthened the Buy rating, adjusting the target price to 5,40 euros from 4,70 euros with an upside potential of around +30%. Positive too Ubi +1% and Banco bpm +0,1%. Brake Understanding -1,2%. Unicredit+ 0,3%.
MALACALZA ON THE ATTACK AGAIN IN CARIGE
It bounces Creval+5%, after having touched the historical minimum yesterday. Carige+3,4%. The Malacalza family has returned to the attack on the recent capital increase, moving, in a letter to the president Giuseppe Tesauro, a long series of criticisms in relation "to the overall management, legal and communicative conduct of the operation by the guarantor banks, of Carige , its legal advisors and its communication officers”.
The managed was little moved. General Bank -0,2%: Kepler Cheuvreux confirmed the buy recommendation and the target price at 33 euros. Analysts are expecting a strong fourth quarter 2017 (accounts to be released on February 9). Also FinecoBank -0,60 to 9,88 euros, it closed down just under 10 euros after reaching a new all-time high of 10,09 euros.
The insurance sector is lively. Advance Generali +1%: according to Reuters, Edizione Holding intends to double its stake to 2%. Salt too Cattolica Insurance +1,2% pending the forthcoming presentation of the 2018-2020 business plan.
THUD OF STM. TONFO THE ACCOUNTS OF THE QUARTER
The crash on Wall Street by Texas Instruments -5% is at the origin of the heavy decrease of stm -8,7%, weighed down by the slowdown of the dollar. In the morning JP Morgan had reduced the company's target price to 23 euros from 26 euros, confirming the Overweight recommendation. Results for the quarter will be announced tonight,
UTILITIES WEAK: ENEL, TELECOM AND ATLANTIA IN RED
Weak utilities: Terna-1,93% Snam -1,54% Italgas -1,27% Enel -1,15%. Back off A2A -0,9% on the day the reorganization of Acs-Agam, the public utility company in Northern Lombardy of which A2A will be the first shareholder after the takeover bid with 38,9%.
Brakes Atlantia -0,4%: pressure from part of the Madrid government continues on the first Abertis shareholder to join the takeover bid launched by ACS Hochtief and not the Italian group's offer.
Tim – 0,8% denied the press rumors relating to the departure of the managing director, Amos Genish, even if several sources confirm the growing tensions between the manager and the main shareholder Vivendi.
MONCLER AT THE TOP. JP MORGAN CUTS AGAIN FERRAGAMO
Worth noting is the leap in luxury Moncler +2% to 27,50 euros, just a breath away from the recent historical record. Jefferies raised the target price to 31 euros from 27,50 euros, confirming the Buy recommendation.
New target filing of Salvatore Ferragamo -0,1% by Jp Morgan analysts who lowered the target price on the stock to 20 euros. Only last Thursday, the analysts of the brokerage house had reduced the target from 21,5 euros to 20,5 after a note from the group which postponed the time frame for the implementation of the industrial plan.
Pause for Fiat Chrysler -0,3% on the eve of today's board meeting. According to Auto News, a mini Jeep is on the way for the European markets and will be produced in Pomigliano. Cnh Industrial -2,3%.
RIFFESER'S TITLES FLY, TREVI BOUNCES
In the rest of the list:
- leap of Polygraphics, suspended with a theoretical increase of 21,26% to 0,25 euro and its parent company Monref with a theoretical 17,65%. The share was driven by the start of coverage by Banca Finnat of Poligrafici with a "buy" rating and a target price of 0,69 euro.
- Continue the run Trevi, up 4,11%, which yesterday closed up 19,8%.
