In the Traders' Stock Almanac's secular statistics, September appears as the worst month of the year for stocks. The sharp rise in the markets on Friday demonstrates a willingness to disprove tradition but Pyongyang's atomic bomb, five times more powerful than the one that destroyed Hiroshima, not only caused an earthquake equal to 6,3 degrees of magnitude but also curbed the stock markets, today devoid of the Wall Street reference point closed for Labor Day.
The Asian markets reacted this morning in the most obvious way: safe-haven assets rose (yen, Swiss franc, gold, US bonds), share lists slowed down. In Seoul, obviously the market most affected by Kim's threats, the Kospi index opened down 1,7%, only to recover part of the losses afterwards. In red in Tokyo the Nikkei -1%, Hong Kong -0,5%. The CSI300 index of the Shanghai and Shenzen lists rose slightly: +0,1%. The BSE Sensex index in Mumbai fell by 0,2%. Futures on the S&P index -0,2% also traded lower between modest trades.
The dollar trades at 1,1880 against the euro, the special observation of the week ahead of the ECB meeting. The yen trades at 109,22 (+0,6% against the US currency). The Swiss franc starts to rise again (0,9610) . Gold shot up to 1.333 dollars an ounce, the highest in ten months. European stock exchanges are also expected to open in the red (-0,3%). Brent oil was down 0,5% to $52,3 a barrel.
On the diplomatic front, a meeting of the United Nations Security Council has already been convened. But South Korea has meanwhile already simulated an attack on the nuclear bases of the enemy of the North. In the meantime, Chinese President Xi Jinping opened the BRICS summit (Brazil, Russia, India, China and South Africa) yesterday by saying that the emerging economies they must resolutely oppose protectionism and ensure that Beijing will continue to invest in international markets and welcome foreign investments on the domestic front.
SPOTLIGHT ON THE ECB BOARD, THE BEIGE BOOK USA ARRIVES
The alarm raised by the Korean nuclear test shifts attention away from the key appointment of the financial week, ie the ECB meeting next Thursday. The markets await indications on the strategy that Mario Draghi intends to adopt to gradually pilot the exit from the securities purchase program on the market. The decision is complicated by the weakness of the dollar, which has fallen by 13% since the beginning of the year against the single currency. But Frankfurt's choices will also be linked by the inflation forecasts that the ECB will reveal at the press conference. In the background weighs the approach of the German vote. On the macro front, the PMI services indices in the Eurozone should also be recorded.
The Beige Book, the most comprehensive indicator on the state of the American economy, will be published in the US on Wednesday. In the meantime, tomorrow the parade of central bank governors will begin: Lael Brainard, Robert Kaplan and Neel Kashkari will intervene, all three voting members of the Fed board which will meet in two weeks. An increase in rates, after the modest increase in employment in August (158 units) is considered unlikely. But it will be interesting to know the opinion of Bill Dudley of the New York Fed, the most powerful, and Patrick Harvey (Philadelphia) who will speak tomorrow. Dudley has repeatedly called for a new increase within the year which for now he believes only 29% of FedWatch members.
ITALY, CONFERENCE WITH TRADE UNIONS UNDERWAY
On the internal front, once the showcase of the Ambrosetti meeting in Cernobbio is over, attention is focused on the meetings between governments and trade unions: tomorrow the appointment on work is scheduled, Thursday it will be the turn of the social security issue.
"The budget law must do no damage and strengthen the government's strategy on growth and employment," said Economy Minister Pier Carlo Padoan yesterday. “These two elements – he added – are in the work we are doing and which we will complete in a very few days. In our choices we have in mind a multi-year vision that identifies the urgencies”, including “credibly and effectively supporting youth employment”. “Italian GDP growth higher than expected . he added – it has two components. The first "is a strong cyclical component", which is accompanied by "a component of structural growth that is increasingly large".
OFFER OF PIRELLI SECURITIES UNDERWAY
Pirelli announced this morning its forthcoming return to the Stock Exchange. The sale offer, presented on the Stock Exchange on Friday, provides for the placement of up to 40% of the shares currently held by Marco Polo International.
FCA, MARCHIONNE ONLY CONFIRMS THE SPIN OFF OF MAGNETI
Last week's balance saw the FtseMib gain 0,5%, better than the Euro Stoxx50 index, up 0,1%. Spotlights still on in Piazza Affari on Fiat Chrysler, after the stock market ride that brought the stock above the 13 euro threshold, for a capitalization of more than 20 billion euro (+54,6% since the beginning of the year) in the wake of the report by Goldman Sachs which set a target price of 25,9 euros for the company and the promotion of the outlook from stable to positive by Standard & Poor's.
Sergio Marchionne, in Monza for the Italian GP (Ferrari third behind the two Mercedes), confirmed that FCA has not received any Chinese offers for the group or for the Jeep alone: Beijing consoles itself with the purchase of Lotus from part of Geely's. Instead, the manager confirmed the spin-off of Magneti Marelli and the components. More cautious on the luxury front: "Alfa Romeo and Maserati are still immature" to leave the group and walk on their own feet, as Ferrari did in the recent past. “I fully understand the fact of detaching from the mass market, as a concept it doesn't make sense – he explained – But the moment is wrong, we are not in a position to do it”. When asked if he is working on a 'big deal' for FCA he replied: "No". The Italian-Canadian manager also replied "I don't know" when asked if he thinks a "big deal" could happen for FCA before April 2019 (when Marchionne is expected to leave his position at FCA). "It's a good question, I don't know, you can't make predictions for the next two years."
ITALY-FRANCE, TESTS OF AGREEMENT ON THE HOTTEST DOSSIERS
Relations between Italy and France are also in the limelight, pending the summit of 11 September in Rome between the transalpine minister Bruno Le Maire and his Italian colleagues Pier Carlo Padoan and Carlo Calenda. In the meantime, the time is running out for a possible solution for Fincantieri-Stx. A compromise is looming which could pass through the contribution of Saint Nazaire and a share of Naval Group in a holding held in equal shares with the company led by Giuseppe Bono. On this occasion, the position of Vivendi in Telecom Italia will also be discussed. At the Ambrosetti workshop, the vice president Giuseppe Recchi argued that the sale of the network "should not be considered a taboo".
