Yanis Varoufakis, the new finance minister of the Tsipras government and staunch supporter of the need to cut the Greek debt, is the new bogeyman of the European markets. Angela Merkel reiterated her no to Greek debt negotiation. Meanwhile, Moscow's debt slips into the category of junk bonds after the relegation decreed by S&P.
To complete the picture of investors' concerns are the negative signals of the US quarterly results, the most sensitive thermometer on the state of health of Corporate America pending the indications of tonight's Federal Reserve Monetary Committee. The test had mixed results.
The overall result is a setback that interrupts a long series of increases. Weak Tokyo (-0,1%) and the other Asian lists. Singapore's central bank unexpectedly lowered rates. On Wall Street, back at full speed after the false storm alarm, the Dow Jones industrial index lost 1.65% and the S&P 500 1.34%. The Nasdaq did worse (-1.89%).
MILAN STOPS AFTER EIGHT RISES
He also benefited in Europe after the long series of increases linked to the launch of Quantitative Easing. Frankfurt dropped 1,57%, London 0,60%, Paris 1,09% and Madrid 0,91%. Athens lost 3,7% : after Standard & Poor's warning of a possible sovereign rating downgrade before March, yesterday it was Moody's who defined the impact of Tsipras' victory on creditworthiness as negative. The sector index dropped about 17%, reaching an all-time low. Milan interrupts the long series of meetings with the plus sign (eight consecutive): the Ftse Mib index closes down by 0,53%.
Backtrack for the dollar: the US currency falls to 118,09 against the yen and loses weight against the euro, which rebounded to 1,1333 from Monday morning's lows (1.1098). Oil drops again, conditioned by the increase in US stocks.
CORPORATE AMERICA MISSES. BUT THE "APPLE" LIKES IT
“The increase in US rates will take place. But only between June and September”, is the forecast made by Gregorio De Felice, chief economist of Intesa San Paolo at the AIAF (Italian association of financial analysts) conference. In fact, there are conflicting signals from the US economy awaiting the outcome of the monetary committee of the Fed, which closes tonight. Prudence will be suggested by the slump in investments in December (which, however, is affected by the seasonal drop in defense orders).
But most of all. the strength of the dollar, even in view of an increase in yields, has already put a strain on several leading companies. Microsoft -9% and Caterpillar -7,2% fell, but also Du Pont and Procter & Gamble, confirming that profit expectations no longer justify the prices achieved with a long series of records. The consideration does not apply to Apple, which jumped to 115 dollars (+5,4%) after the accounts driven by the sales of the iPhone, especially in China, by now Apple's first market. The iWatch will hit the market in April.
To console the market, Yahoo! (+7,2%) which has initiated the staged split (for tax reasons) of its stake in Alibaba.
THE TREASURY AND BANKITALIA: A VERY POSITIVE PUSH FROM EQ
The tension over Greece, on the eve of the visit of Jeroem Djissembloem, leader of the Eurogroup, to the new premier Alexis Tsipras also had a modest echo on the debt market. The spread between the BTP and the Bund rose slightly to 115 basis points and the domestic 1,54-year yield rose to 3%, but yesterday morning the Treasury placed all the 2018 billion euro of BTPs indexed to 2041 inflation and 0,2 and Ctz at the rate of 1,16%, 0,281% and XNUMX%.
Today the auctions continue with the six-month Bots. The forecasts are also positive for today's auction of 6-month Treasuries, confirmed the head of Italian public debt Maria Cannata who, speaking at the AIAF conference, underlined that “the QE announcement had a significant effect on all performance levels. However, we need to be cautious: "The volatility on the markets remains high", concluded Cannata.
The deputy general manager of the Bank of Italy, Fabio Panetta, was also optimistic in the same office; the purchase of sovereign bonds announced by the ECB will have a significant impact on Italian economic growth because the purchases of quantitative easing “will contribute significantly to raising growth over the next two years; they offer further spaces to combine reform and development”. The latest official government estimates see a GDP of 0,6% in 2015 and 1,0% in 2016.
RUSSIA WEIGHTS ON UNICREDIT
The nervousness triggered by the Greece dossier and the downgrading of Russia by Standard & Poor's (the ruble's slide resumed) triggered the sell-off in the banking sector. In particular Unicredit, the most exposed on Eastern European markets, dropped 1,7%. After the recent run triggered by the announcement of the reform of the sector, the cooperative banks are down: Bpm -1,31%, Basnco Popolare -0,52%, Ubi -0,55%. Mediobanca goes against the trend (+2,05%).
FCA BRAKES, CNH MILLS AGAINST CATERPILLAR
Fiat Chrysler took profits -3,02% after the long series of hikes in the wake of the dollar's rise. But the positive judgments are pouring in pending the preliminary accounts for 2014 which will be examined today by the Board of Directors in London. Morgan Stanley has raised the target price from 15 to 17 euros (overweight rating), as has Exane (from 10,1 to 13,7 euros, neutral rating).
CNH Industrial slows down (-3,33%) after the negative results of Caterpillar: drop in net profit to 757 million dollars from 1 billion and downward revision of estimates for the current year.
KASHAGAN FLYING SAIPEM
In the energy sector, Saipem increased ++4,40% on the wave of rumors about orders worth two billion for the construction of new gas pipelines in the Kashagan field, in Kazhakstan to replace the existing ones which led to a delay in the start of production.
Weak Finmeccanica on the day of the board called to approve the new industrial plan for the years 2015-2019. The board also gave the mandate to the managing director Mauro Moretti to close the negotiations for the transfer of the transport sector: the Japanese Hitachi was favored.
US JACKPOT PUSHES GTECH
In the rest of the list, the outcome of the Seat PG shareholders' meeting stands out, which approved the 30 million transaction proposed by the former directors to close the liability action against them.
Advance Gtech rises by 1,63% favored by expectations for the prizes up for grabs in the USA. Today's Powerball draw in the United States has a record $260 million up for grabs. Autogrill is also on positive ground, supported by the improvement in the target price of Citigroup. De' Longhi is up more than 4,5% after the publication of preliminary revenues.
