The Stock Exchanges continue to believe that the US-China agreement is very close. Larry Kudlow, Trump's economic adviser, took care of raising hopes last night, confirming that the agreement is "close" away. Beijing's decision to reopen poultry imports from the States goes in this direction.
Tokyo's Nikkei is up 0,7%, Seoul's Kospi 0,9%. The Hong Kong stock market also rose, by 0,3%, despite the fact that the city is in its fourth day of paralysis and the financial district is very difficult to reach. On parity the Shanghai Stock Exchange.
The yuan weakened to 7,00 and the Japanese yen, the Asia Pacific safe haven currency, weakened after five days of appreciation. The slowdown in GDP weighs: only +0,2% in the third quarter.
HONG KONG IN REVOLT, AMAZON SUES THE PRESIDENT
One wonders whether and to what extent the "peace of chicken" (and of pork, doubled in price in China due to the swine fever epidemic) will be able to lead to a broader understanding between the two Big Ones who have ugly fish to fry on their respective domestic fronts.
The revolt in Hong Kong continues, which, despite the rebound, is about to close the week down by about 4,5%. The crisis now threatens to blow up the dialogue between the Big Ones. The Washington Senate is about to approve a law that provides for an annual report by the Secretary of State to evaluate whether the autonomy sanctioned by the 97 agreements on the former British colony is respected. A provocation in Xi's eyes.
Trump, meanwhile, is now under investigation for corruption in the context of the impeachment process for Ukrainegate. House Speaker Nancy Pelosi said so. In the meantime, the long-distance clash between the president and Jeff Bezos continues, who has announced that the complaint is ready for the "incredible and unforgivable errors" that led to the exclusion of Amazon from the Pentagon's cloud contract (10 billion dollars ) then assigned to Microsoft.
FLAT WALL STREET, WALMART ADVANCES
In this climate, Wall Street marks time and safe-haven purchases are back.
Dow Jones -0,01%, S&P 500 +003%. NASDAQ -0,04%. The earnings season is drawing to a close: three-quarters of S&P stocks beat estimates, but earnings are still down on previous data.
Worth noting is the crash of Cisco, -7,3% after the accounts. WalMart also declined slightly, but after the Stock Exchange it showed robust growth in its accounts.
Market rates rise: the US Treasury Note rises to 1,84%, +3 basis points.
Gold down 0,5% to $1.464 an ounce after a three-day rise.
Brent oil rose 0,2% to $62,5 on the release of US crude inventories data. In Piazza Affari money on Saipem (+0,5%), after the announcement of contracts in Guyana for 880 million dollars.
RAIN OF PURCHASES ON THE BUND, THE BTP SUFFERS
The most relevant note, however, concerns the Euroland debt market. The spotlights are once again focused, after a long truce, on the tensions of weaker Europe, Italy in the lead.
Yesterday there was a large return of purchases on the German Bund, which returned to -0,35% yield (+5 basis points) after breaking important technical levels with the futures at 171, which has not been seen for some time.
The BTP returned to suffer: in the final session the BTP slipped heavily, with the spread opening by about 15 points, reaching its highest level since mid-August. The spread between BTP and Bund rates on the 10-year segment settled at 169 basis points after having reached a maximum of 170, from 155 at the end of Wednesday's session. The Italian 1,32-year bond is at 8% (+XNUMX basis points).
On a technical level, the introduction of the regulation on the exemptions reserved for banks that deposit liquidity with the ECB, the so-called tiering, announced this fall by Mario Draghi. Tensions are being created on the "repurchase agreement" market which penalizes Italian bonds, not considered reliable, as collateral in this type of transaction.
THE BAGS FLOAT, THE GERMAN GDP SUPPORTS EUROPE
The stock exchanges floated around parity in Europe for almost the whole day and then deteriorated slightly in the end. But the publication of German GDP for the third quarter (first estimate) partly supported the mood of the markets. The 0,1% rebound saves the economy beyond the Rhine from the shame of recession, even if in reality it is only the effect of an accounting trick, i.e. the downward revision of the second quarter (to -0,2 %) which offers a lower base. “Thus – comments the Anthilia strategist Giuseppe Sersale – European equities remained roughly in the range, even if the risk risk latent has manifested itself through the strength of core bonds and safe-haven assets, versus the weakness of peripheral bonds”.
Piazza Affari leaves 0,41% on the ground and drops to 23.481 points. The other markets are also in pale red: Frankfurt -0,37%; Paris -0,1%; London -0,76%. Madrid -0,2% also fails to rebound after recent post-election losses.
DE GUINDOS: EVEN THE CLIMATE IN THE NEXT STRESS TESTS
European Central Bank interest rates are close to their lows but need to stay low. Raising them now, as some would like, would in fact be a mistake, said the governor of the French central bank Francois Villeroy de Galhau, probably aligning himself with Christine Lagarde's line: "The markets expect, reasonably in my view, that short-term rates are to hit the bottom – he said – These low short-term rates must remain and will remain so: it would undoubtedly be a mistake to raise rates now”.
The European Central Bank is considering including climate change risks in future bank stress tests, Vice-President Luis De Guindos said yesterday. “We are paying much more attention to the phenomenon, especially in terms of financial stability”.
"Volumes are scarce - commented an operator to Reuters - but we are witnessing a return to the past, with peripherals, including Italy but also Spain, which have disengaged from the 'core', sunk by internal political problems" .
Meanwhile, the Bund is trading at -0,34% (+4 basis points) after breaking important technical levels with the futures at 171, which has not been seen for some time.
BANKS IN BRAKING, BUT UBI RISES
The tension on the spread had an immediate impact on the performance of Italian banks. Weak the Bigs. Unicredit sells 0,82%, Intesa -0,81%. Mediobanca flat (-0,07%). Only Ubi rises (+0,92%) which recovers part of the recent decreases.
Asset management highlighted, waiting for good results in the fourth quarter: Azimut rises by 2,6%.
ONLY TIM, HERA AND DIASORIN SPOTLIGHT
Among the few movements worth mentioning is the upward trend of Telecom Italia (+0,99%) pending developments on the network company.
Diasorin continues to rise (+2,35%) due to rumors about the possible launch of a takeover bid on the German Qiagen by Thermo Fisher Scientific.
Weak auto sector, after US President Donald Trump yesterday said he would soon make a decision on any tariffs. Flat Fiat Chrysler (-0,07%), Pirelli drops by 1,27%. The European Stoxx loses more than 1%.
Sales in the regulated activities sector, such as Snam (-0,86%) after The bills. Italgas also down (-1,51%). But Hera is making progress (+0,83%) on the wave of results.
UNIEURO, GUALA, GIGLIO GROUP: SMALL CAP UNDER STRESS
Fila (-6%) closed the first nine months of 2019 with 541 million euros in revenues, up from 443 million euros in the same period of the previous year. Strong growth in net profit, at 25 million euro, with good cash generation.
Unieuro was also bad (-9,82%) which sold to institutional investors, with a procedure accelerated bookbuilding, 3,25 million ordinary shares, corresponding to 16,25% of the share capital, at the price of 12,95 euro per share.
Datalogic -1,8% after closing the third quarter with 155 million euros, down 1,4% year on year, but slightly better than expected. On a comparable basis, sales are down 3,7%. Ebitda 25,6 million euros, -4%. At the end of September there are 19,5 million euros in cash, more than expected.
Guala (-6%) made a net profit of 1,5 million euros in the first nine months of 2019, against a pro forma loss of 11,5 million in the same period last year.
Giglio Group -5%. The e-commerce group has announced a capital increase of up to 10% reserved for institutional investors. The controlling shareholder, Meridiana Holding, will subscribe at least 30% of the new shares.
