Dear saver, get busy: if not now, when? The Draghi effect comes at an exceptionally favorable moment for the financial markets, which, in the wake of the Asian stock exchanges, are starting to close the week at historic highs. And the prospects are rosy, as demonstrated by various indications.
VACCINES GIVE THE BULL CHARGE
The widening of the yield curve: short-term yields remain low, long-term yields rise (1,932% for the 30-year T-bond, the highest for one year) in anticipation of recovery. The difference between 2 and 10 years rises to 1,02%, the highest since 2017. And the dollar is also growing again.
The real boost to recovery, however, comes from the improvement in the health situation. More vaccines are arriving and around the world (see India) there is a general improvement in the fight against Covid-19.
Johnson & Johnson filed an emergency approval request for its single-dose vaccine with US health authorities tonight. The first pharmaceutical company in the world plans to deliver 100 million doses to the United States by June in the event of a go-ahead.
US BAGS AT HIGHEST, EVERYTHING GOES UP IN ASIA
All the stock exchanges on the planet are going up, without particular distinctions between geographical areas. Yesterday evening the S&P500 (+1,09%) and Nasdaq (+1,23%) reached all-time highs and this morning everything went up in Asia.
Tokyo's Nikkei +1,3% (+4,5% per week). The case of the president of the Olympic committee Yoshiro Mori, 83, who said he was against promoting female executives, explodes. “They talk too much”, he justified himself.
The CSI 300 index of the Shanghai and Shenzen stocks rose (+0,8%, +3% on the week), Hong Kong's Hang Seng +0,5% (+3,5% on the week). Kospi of Seoul +0,8% (+4,6% the week). BSE Sensex of Mumbai +0,3% (+9% per week).
RECORD COLLECTION ON THE HONG KONG STOCK EXCHANGE
The case of Stock Exchange of the day is the shopping boom on Kuaishou, a Chinese video platform that tripled on the day of the landing on the Hang Seng. The stock trades at 312 Hong Kong dollars: +170% compared to the reference value (115 dollars) set in the initial sale of shares which allowed the Tencent investee to raise 5,4 billion dollars.
In the same Hong Kong listing, Alibaba is down slightly after four consecutive days of gains. Its five billion HK-dollar bond, offered during the week, has received requests for eight times the amount offered.
The oil rally continues briskly: Brent is at 59,2 dollars a barrel, +0,5%, the weekly balance is +6%.
For gold, which fell below $1.800 an ounce yesterday, this should be the worst week in the last three months.
In short, the international climate is ideal for starting the Draghi government. A good viaticum, because, as Napoleon said, a good general is a lucky general.
DRAGONS EFFECT, SPREAD AT A HUNDRED QUOTE
The road to government, narrow and winding in the morning, gradually widened during the day. Perhaps too much, given the distances between the various political forces, which until a few days ago were divided between distances that seemed unbridgeable. The openness of former premier Conte, the availability of the League and the support of Berlusconi marked the day. And so the Draghi effect has not betrayed the trust of the markets, which continue to bless the arrival of Super Mario. The spread fell to the threshold of one hundred points, as it hadn't happened for three years (-8% in three days). Equally strong is the impact on share prices: the index, up for the fourth day in a row, is close to 23 (closing at 22.900 points). Optimism is growing for the outcome of the consultations that are getting underway today, even if Draghi himself specified that he will only dissolve the reserve after a second round of consultations, between Monday and Tuesday.
TOP BUSINESS PLACE, DB STARTS AGAIN, FLIGHT OF LUXOTTICA
Milan was once again at the top of Europe yesterday. The plus sign prevails over the other squares. Frankfurt +0,93%. Deutsche Bank remained flat, after announcing its first 2020 profit in six years, thanks to the performance of its investment banking division.
In Paris +0,82% as in Milan, where Essilor Luxottica is making progress (+3,54%), which has entered into a pact with Cooper to buy the American SightGlass Vision, a group specializing in lenses against childhood myopia. Madrid +1,4%.
LONDON GETTING READY FOR NEGATIVE RATES
London -0,02% after Bank of England announcements. The central bank has warned banks to consider negative deposit rates. The institute believes that a rate cut is not very likely or imminent as inflation is expected to accelerate in the second half of the year. The pound, weak this morning (-0,6%), reversed course against the euro (+0,2%).
ECB: STIMULATIONS STILL NECESSARY
The Economic Bulletin of the ECB underlined that the resumption of infections and the new rigid containment measures "are still undermining economic activity". In the manufacturing sector, activity "continues to show good resilience, while it is subject to a sharp contraction in the services sector, albeit to a lesser extent than in the first wave of the pandemic in early 2020". An ample degree of monetary stimulus therefore continues to be “essential. By helping to reduce uncertainty and boost confidence, this will encourage consumer spending."
THE BTP AT 0,54%: THERE IS MARGIN TO FURTHER DOWN
Closing date for the bond market. In addition to the shower of purchases on the Italian paper, there were profits taken on the Bund.
The yield spread on the ten-year stretch narrows to 100 basis points – the lowest since the first ten days of January 2016 – ending at 101 basis points.
The April 2031 BTP rate is indicated at the close at 0,545%, without reaching the historic lows of mid-December in the 0,48% area.
This last element shows that investors and insiders look at developments on the political scene more with prudence than enthusiasm, for fear of getting burned.
MANAGED IN RALLY: FINECO +6,2%
In Piazza Affari, the banking sector lengthens, as does asset management.
FinecoBank shines (+6,21%), on the new all-time high after the January funding data, which rose to 891 million (+175% compared to 323 million a year ago): the managed component stands at 470 million, over twice compared to 217 million in January. Azimut (+4,6%) was also in the light.
SUPERSTAR BANKS BEHIND THE SPREAD: BPM AND BPER FAVORITES
Among the best banking stocks Banca Bpm (+4,36%) and Bper (+4,17%), on which Kepler Cheuvreux has raised the recommendation on the stock from hold to buy, with the target price rising from 1,7 to 1,95 .3 euros. Intesa +3%: today the Board of Directors on the accounts. UniCredit +XNUMX%.
Intermonte analysts point out that the improvement in the spread can only encourage a rebound in the securities of the sector. The narrowing of the gap will allow banks to strengthen capital ratios. A 100 basis point decrease in the spread translates into an average increase in CET1 ratios of 15-20 basis points. Creval, Bpm and Credem are currently the banks most exposed to Italian government bonds.
As for the acceleration of the consolidation process of the Italian banking sector, Unicredit, Banco Bpm and Bper are the players in the field to play the M&A theme. Among the best picks there is also Mediobanca, on which the pressing of Leonardo Del Vecchio continues.
BOFA MAKES PIRELLI FLY
Among the best performances was that of Pirelli. The stock closed trading with an increase of 5,72%, at 4,66 euros, returning to the highs of last December, after the positive opinion of Bank of America analysts arrived in the morning, who raised the price target from 4,4 to 5,6 euros, confirming the buy recommendation.
FOOTBALL: INTER IS LOOKING FOR MONEY, DELL ENTERS SPEZIA
The rumors about the transfer of the package (0,37% of the capital) of Inter shares which will be sold together with the Suning package have not been confirmed. The Financial Times confirms that the Chinese owners of Inter are accelerating the search for at least 200 million to fix the club's finances.
Speaking of football, the financier Gabriele Volpi (with a Nigerian passport) has decided to cede control of La Spezia to the tandem of overseas investors made up of the Alk Capital and Msd Capital funds. The first financial operator refers to Alan Pace, the businessman who has recently defined the purchase of Burnley in the Premier League (170 million pounds for 84% of the capital), while the second investor is the family office of Micheal Dell , the founder and CEO of the US computer giant Dell Technologies (58,7 billion dollars of capitalization).
ALFA AND DS: THE STELLANTIS LUXURY CENTER AT THE START
CNH Industrial (+2,6%) could consider alternatives to the spin-off plan if this creates value for customers and shareholders. This was stated by the new CEO, Scott Wine.
Stellantis (+0,8%) will create a hub with the DS, Alfa Romeo and Lancia brands to better operate in the premium segment. This was stated by Beatrice Foucher, head of the DS brand at a press conference.
Fiat Chrysler will launch the ordinary redundancy fund, from 8 to 14 February, for the 7.174 employees of the Melfi plant in Basilicata. It is a question, explains the company, of "normal production management, which must respond to the flexibilities imposed by Covid, by the supply chain as well as by market needs".
Time +1%. The BoD has examined the criteria for selecting the candidates to be included in the list it intends to propose in view of the renewal on 31 March next. It was also disclosed that Vivendi and market representatives have given support to the initiative, while CDP "reserved itself", explaining that it must submit any decision on the matter to its Board of Directors.
PRYSMIAN TOWARDS SHOPPING IN THE USA
Prismian +1,5%. In an interview with Bloomberg, CEO Valerio Battista hopes to find a good company to buy in the United States at a reasonable price. However, the CEO rules out an interest in rival Southwire. The Board presented the list for the renewal of the board, confirming the current CEO Valerio Battista and the president Claudio De Conto. Furthermore, Massimo Battaini, currently CEO of Prysmian Group North America, assumes the new role of Chief Operating Officer.
Among the worst of the day are Interpump (-0,98%) and Recordati (-1,12%). Stable A2A, on which today Kepler Cheuvreux confirmed the buy recommendation and the target price at 1,8 euros.
