"I don't understand why they don't take out a loan, with tuition so low." The US secretary of commerce, the billionaire Wilbur Ross, thus commented on the problems of the 800 employees without salary because Donald Trump refuses to sign the budget which does not include the funds (5,7 billion dollars) for the wall with Mexico . The president, barring an agreement in extremis, will thus have to give up the speech on the state of the Union. The speaker of the House, Nancy Pelosi, refuses the permit for security reasons: there is no money for policemen's overtime.
Ross himself threw cold water on hopes of a deal with China: "We are thousands of miles apart," he said. But, despite these negative signals, the Stock Exchanges are holding up. Merit of the messages arriving from the ECB, after Mario Draghi, as the Japanese banker Kuroda had already done, yesterday reiterated the expansive policy of the central bank. But also of the resurrection of the chip, recovering after the blow accused with Apple's profit warning. The revenge, which started yesterday with the accounts of Stm, continued in the USA with Xilinx and then spread throughout Asia.
BUT INTEL COOLS THE ENTHUSIASM
But a cold shower arrived last night: Intel, the world's leading semiconductor manufacturer, presented a quarterly report that was far from consensus. Revenues for the last three months of the year amounted to 18,6 billion dollars, 400 million less than expected. The forecasts for the first quarter of 2019 are even worse: revenues are seen at 16 billion, far from the 17,3 billion of the consensus. The stock lost 7% post-exchange.
With this unknown factor on their backs, the markets are preparing to end the week. Stock markets in Asia are rising, also thanks to the push of semiconductor manufacturing companies. Hong Kong gains 1,3%, the giant Tencent gains 3% after the Beijing authorities have authorized the sale of three new electronic games. The silicon boom also drives the other stock exchanges on the Continent: Tokyo 1%, Seoul 1,4%, Shanghai 0,9%.
Chips also protagonists on Wall Street: the Philadelphia Semiconductor index rose by 5,7%. Dow Jones -0.09% held back by difficulties in tariff negotiations, S&P 500 +0,14%. NASDAQ +0,67%.
OIL ON THE RISE, THE STERLING FLY
The crisis in Venezuela weighs on oil prices, more due to the political effects on the balance of OPEC than to the contribution of Caracas' production, now reduced to 700 barrels. Brent crude rose 1% to 61,8 dollars a barrel. In Piazza Affari yesterday Saipem -0,7%. Eni +0,4%.
Euro recovered this morning to 1,132 against the dollar (+0,2%), from -0,6% at the end. But the protagonist of the market is the pound +0,5% against the dollar to 1,3107, the highest since January 2018. The rise is linked to the news that the Ulster unionists have accepted the EU's conditions on the border with Ireland : the hard Brexit drives away.
DRAGONS: RATES STILL ALSO IN 2020
The European Central Bank has taken note of the deterioration of the economic situation, but for the moment Mario Draghi has decided not to touch the "toolbox" available to Frankfurt, which is always ready for use, because it is "unlikely" that the economic downturn results in a recession in Italy or Germany. In particular, the banker at the press conference he referred to the liquidity auctions, the Tltro, an issue that "was raised by several participants in the meeting".
Draghi's words slowed down the run of price lists, euphoric in the morning waiting for immediate measures to deal with the decline in economies confirmed in the morning by the PMI indices, also down in January, for the fifth month in a row. In the end, however, the markets recovered also thanks to the drop in the euro: the ECB confirmed that rates will remain at current levels until the summer of 2019. But, given the situation, it is difficult to talk about increases at least for the whole 2020: “The normalization of monetary policy – said Draghi – will be far from rapid”.
SPREAD AT 252 POINTS, 6 BILLION BOTS COMING IN 6 MONTHS
Milan, the best European market, closed the session up by 0,85% at 19.564 points. More modest earnings for Frankfurt, +0,53%, and Paris, +0,65%. In the Eurozone the most timid Madrid (+0,23%). Lists outside the single currency area are in red: London -0,34% and Zurich -0,15%.
Positive session also for the bond market. The Italian 2,67-year rate closed at 2,754%, the lowest since the end of July, against 252 on the previous day. The spread with the Bund, which fell to 255 basis points, ended the session at 259 basis points from 2 at the previous close. The 0,277-year bond, after a plunge to 0,282%, the lowest since the end of May, closed the session at 0,333% from 29% yesterday evening. In the evening, the Treasury announced that in the January 6,5 auction it will offer six-month Treasuries for 6,45 billion euro (against 2,75 billion maturing). Today the Ctz and Btpei are going to auction for a total amount between 3,75 and 2020 billion. Yesterday on the gray market the November 0,469 CTZ was traded at a yield of 2018%, which if confirmed in the auction, would represent the lowest since May XNUMX.
STM SHOW IN MILAN (+10,6%)
Yesterday was the day of Stmicroelectronics in Piazza Affari (+10,16%), in the wake of fourth quarter data and, above all, the solid outlook that dispelled fears of a slowdown in the semiconductor industry. The fourth quarter of 2018 closed with an operating income of 443 million euros, up 7,9% year on year, slightly better than expectations (425 million).
THE FEE RISES, THE AZIMUTH TAKES FLIGHT
Another protagonist of the session was Azimut (+7,60%), after the start down by 1,5% following the cut of the target (11 euro from 15,20) by Mediobanca. The change of course is linked to the announcement in the afternoon of a new commission structure with a 50-point increase for performance commissions. Banca Generali also rose (+1,2%). FinecoBank +0,3%.
The banking sector was mixed: a minus for Banco Bpm (-1,69%) and Ubi Banca (-2,04%), Intesa was also down (-0,54%). Instead, Bper Banca (+0,30%) and Unicredit (+0,78%) advanced.
Since the beginning of the year, the Eurostoxx index of European banks has recorded an increase of 8,0% and is the second best sector after that of Basic Materials (+11%). Among the brightest stocks are the German Commerzbank (+20%) and Deutsche Bank (+15%). The leading Italian bank is FinecoBank (+12,5%).
Also noteworthy among the blue chips are Poste Italiane (+0,24% at €7,61) and Atlantia (+1,15%) both rewarded by Mediobanca's rating increase to outperform.
UBS PROMOTES MONCLER, NEW STOP FOR TOD'S
Moncler advances in luxury (+1,93%): UBS has raised its rating from neutral to buy, with the target price going from 39 to 36 euros. Bad Ferragamo with a loss of 0,2% and Tod's which paid with a -5,94% for the announcement, yesterday evening, of fourth quarter sales below expectations.
Still worthy of mention is the leap of Sias (+6%), promoted by Mediobanca.
