The euro rises, despite the fact that the ECB has not taken a single step towards tightening monetary policy. For now, at least. But it was enough for Mario Draghi, after acknowledging the progress of the economy in the area, to say that we can start talking about tapering in the autumn, to trigger the markets rush towards the Eurozone. And so, after an initial slip, the euro strengthened this morning to 1,1630 dollars, the highest level since August 2015. Meanwhile, the dollar, hit by the Russiagate developments, is also slipping to its lowest level in 11 months against the yen .
The new balances of the currency markets are reflected in the performance of other assets: the prices of shares calculated in euros are slowing down, but the debt market gains confidence. Investors believe in the future of the euro zone enough to push all peripheral spreads downwards, including Greece, already accustomed to dramatic scenarios this season. And Italy, instead of the expected and feared rise in the cost of debt, runs the risk of living a midsummer dream: lower rates, a recovering economy, banks that are no longer scary. A favorable situation that is as welcome as it is unexpected: let's hope that the awakening in the autumn will not be too abrupt.
TOKYO BRAKES, AMAZON PUSHES SEARS (+10,6%)
Russiagate and central banks are also holding court this morning. Contrast Asian price lists. Tokyo drops 0,3%, the other markets also slow down: Sydney -0,6%, Hong Kong fails its goal of a tenth consecutive day of gains. Shanghai -0,2%, Seoul +0,2%. But the balance of the Asia Pacific index (+5% in the last two weeks) is largely positive.
The misadventures of Russiagate did not distract Wall Street's attention from the earnings campaign which is shaping up better than expected (profits up 8,7% against 8% expected).
New jobless claims in the US were 233, down from 247 a week earlier, below consensus estimates, which had expected 245. The super-index rose by 0,6% in June, accelerating from +0,3% in May and against the +0,4% estimated by analysts.
The Nasdaq remains at record levels (+0,08%). Stable the S&P 500 index (-0,02%), Dow Jones -0,13%. Amazon +0,2% under fire from the Antitrust which disputes the discount mechanisms practiced by the e-commerce giant, marks a new blow: Sears (+10,6%) has decided to sell its products through the company of Jeff Bezos, using the digital assistant Alexia, promoted by the giant. Home Depot is in free fall (-4%), the chain besieged by Amazon itself. Positive accounts for Microsoft (+0,9%), thanks to the growth of the cloud and some tax benefits: revenues have risen to 24,7 billion (against the 24,2 billion expected).
Sharp decline for Qualcomm (-4,9%) after lower than estimated results and, above all, after the news that several Apple suppliers have launched a lawsuit against the chip supplier, accused of asking for an additional commission for the assembly of the iPhones.
OIL AT 50 DOLLARS WAITING FOR THE SUMMIT IN RUSSIA
Oil trades at 49,27 dollars after having exceeded 50 dollars during the session. The market awaits the outcome of Monday's meeting in St. Petersburg between OPEC and non-OPEC producers. Exxon (+0,5%) advances despite the conviction (2 million dollars) for having circumvented the sanctions against Russia in 2014: at the time the company was led by Rex Tillerson, current secretary of state. At Piazza Affari Eni +0,1%, Saipem +0,2%. Tenaris goes against the trend (-1,2%).
THE EU HOLDS BACK THE EU EXCHANGES. SALT LONDON
The rush of the euro slowed down the growth of share prices. Milan closed in the red by 0,19% at 21.438 points. Down Paris (-0,32%), Madrid (-0,22%), Frankfurt (-0,04%). The trend in London (+0,77%) was quite different due to the weak pound against the single currency and the dollar.
Consumer confidence in the eurozone drops unexpectedly in July after a sharp rise the previous month. The flash estimate for the euro area fell by 0,4 points to -1,7, the EU Commission said without providing further details on the decline.
The ECB confirmed the QE (quantitative easing) guidelines, leaving rates unchanged. Surprisingly, there is no mention of a future change of course in the vial press release. “We simply said that the discussion should take place in the autumn,” Mario Draghi said, adding that “patience and perseverance are needed because it is not yet the time” to start tapering. The formal commitment – inserted in black and white in the press release – was thus reaffirmed to maintain the stimulus program for Qe purchases, which in the event of a worsening of the scenario could be increased in terms of amount and/or duration.
BTP HEALTHY, GREECE BACK ON THE MARKET
Closing up for BTPs, which take advantage of the accommodating message that emerged from the ECB meeting, with the spread falling back to its lowest level since the beginning of the year. In the afternoon, the rate on ten-year BTPs fell to 2,10%, the lowest since the beginning of July: today's is the fifth consecutive positive closing for the Italian bond.
The spread on the Bund narrowed to below 160 bps, reaching an intraday low of 157, the lowest level since early January. France and Spain placed a total of just under 14 billion in medium-long term paper, indexed included. With the markets closed, however, the Treasury's announcements will arrive on next Wednesday's Ctz and Btpei auctions, the first appointment of the round of placements at the end of July. Next week could trigger Greece's return to the bond market; Athens has commissioned a group of banks to manage the issue (indicatively over 5 years with an amount between 2 and 4 billion) even if the timing of the operation is still uncertain.
“RED” SUPERSTAR. EXANE DOES NOT WAKE UP FIAT CHRYSLER
The drop in the dollar contributed to a new record for Ferrari (+2,4%). In the evening, the stock of the Reds exceeded the 100 dollar wall on Wall Street, reaching the new all-time high. In October 2015, the stock was placed on the US Stock Exchange at 52 dollars.
FCA drops by 1,3%, despite the increase in the target price (from 7,2 to 7,4 euros) by Exane (rating underperform). Experts have increased the company's EPS estimates by 3% for 2017 and by 8% for 2018. The holding company Exor is in sharp decline (-2,2%).
BUZZI, FERRAGAMO AND MONCLER AWARDED BY BROKER
The dollar effect does not hold back Buzzi Unicem (+1,64%). The stock reacted well to Bernstein's report in which analysts increased the share target price to 27,4 from 27 euro (outperform) in view of the half-year results which should show strong growth in Ebitda. Experts are not ruling out an improvement in full-year guidance.
The luxury is also positive. Salvatore Ferragamo +2,97%: HSBC confirmed the buy recommendation and the target price at 32 euros pending the half-yearly accounts. Analysts also point out that in recent meetings with investors they have noted a great deal of interest in the group's restructuring story.
Moncler also increased (+0,56% to 21,46 euros): Jefferies (buy, Tp 24 euros) expects solid growth in revenues in the first half of 2017 (the accounts will be published on 26 July).
MORGAN STANLEY RAISES THE INTESA TARGET
Banks worsened in the final, on the day in which Quaestio Capital Management Sgr raised the white flag announcing that it is evaluating the hypothesis of liquidation of the Atlante I fund after the zeroing of the value of the investee Venetian banks in which approximately 3,5 billion.
Intesa San Paolo resisted, +0,4% thanks to the judgment of Morgan Stanley: the broker raised the target price on the stock from 3,2 to 3,4 euros, confirming the overweight rating. According to analysts, the Bank could announce a 12% ROTE target for 2020, while EPS estimates rise by 10% and the expected 2017 dividend of €0,20 is now seen by the investment bank as a floor. The valuation of the security in the best scenario goes from 4 to 4,2 euros, in the worst one from 2 to 2,5 euros.
UniCredit +0,1%. Banco Bpm closed in parity at 3,1 euro (it was +1% in the early afternoon).
PARIS PROMOTES FINCANTIERI. CREDIT SUISSE GIVES WINGS TO RECORDATI
Brilla Recordati (+3%): Credit Suisse has raised the target to 37 euros from 33 euros, however confirming the Neutral rating.
Turnaround for Fincantieri (+3%) still engaged in the landing in the French Stx. French Economy Minister Bruno Le Maire said that Italian investors are "welcome": a two-party governance is looming. Meanwhile Fincantieri has signed a collaboration agreement with Mapei.
