The German Stock Exchange has gained 68% since November 2005, i.e. since Angela Merkel took over as Chancellor. Over the same period, the Euro Stoxx 50 index recorded a loss of 15%. So far, in the Merkel era, holders of Bunds have accumulated overall interest for 40%, accepting on more than one occasion a negative yield on two-year bonds in order to remain within the safe haven of governed by Frau Angela .
Given this premise, it is probable that the markets will today pay Merkel the homage of a new absolute record of the Dax, even if the German index, thanks also to the stimuli of the Fed, had already celebrated in advance the obvious victory of the CDU/CSU. But the surprise lies in the dimensions of the success, such as to reduce the weight of the possible small partner of a Grand Coalition. The vote sweeps away the dreams of those who hoped for a less "rigorist" Germany but also the fears of a Eurosceptic wave. Thus the risk of a squeeze by the German Constitutional Court on the Draghi plan decreases.
In the meantime, there have been no significant changes on the currency markets. The euro remains strong, well above 1,35 against the dollar and 134 against the yen: one more problem for Mario Draghi, who is more than skeptical of the strength of the eurozone's economic recovery.
THE DRAGON SPEED UP
With the Tokyo Stock Exchange closed, it's up to China to kick off the week with a rising session. The Shanghai Stock Exchange is up +0,6%, Hong Kong does even better +1,7%. The rise is, in part, the delayed effect of the Fed's decisions: the Chinese stock exchanges remained closed last Thursday and Friday.
But the Bull picked up speed when, in the open Bora, the preliminary data of the PMI index were communicated, which rose to 50,9 from the previous 50,1. It is the confirmation that the Chinese economy has now picked up speed, just a few weeks after the meeting of the CCP on the economy, which should give the go-ahead for reforms to liberalize credit and services. Meanwhile, on Sunday the life sentence of Bo Xilai, still one of the points of reference of the party's left, was pronounced.
BUDGET AND FED ON THE WALL STREET AGENDA
With the German vote archived, the markets' attention returns to Washington, where the battle over the budget and the financing of current spending is raging: in a week's time, the Treasury may have run out of cash, but there is no agreement between the political forces to avoid a stoppage that could have serious consequences on consumption and employment. Indeed, the Republicans have passed a law that significantly cuts benefits for the jobless.
The political stumbling block convinced the Fed to postpone tapering. In the event of an agreement, the cut will become topical again: James Bullard, a Fed member, said on Friday that the tapering could kick in at the end of October. Speaking of the Fed, President Barack Obama has promised to nominate Ben Bernanke's successor in early autumn: starting today, every day can be good.
HOT DOSSIERS IN THE BUSINESS PLACE
There is no shortage of strong themes while the government ship, increasingly fragile, faces the difficult navigation of the Def.
a) Last week's black jersey went to Telecom Italia -6%. The share was more affected by the hypothesis according to which Telco could postpone the maturities by a few months causing the speculative appeal on the share to cool down. Telefonica is looking for the most painless and least expensive solution to secure control of the company. The Italian shareholders of the holding are trying to prevent the retreat from turning into a new wave of capital losses. According to Kepler Cheuvreux experts, the best thing for the company would be a reserved capital increase for around 3 billion euros. The request that the president Franco Bernabè is about to launch to the shareholders, not only of Telco, could be much higher.
b) Banca Mps also ended the week in the red -1,1%, so crucial days are announced on the judicial front (the Alexandria case goes to trial) and on that of the review of the industrial plan. Tomorrow CEO Fabrizio Viola will illustrate to the board of directors a robust territorial restructuring which provides for the closure of another 200 branches in addition to the 400 already announced. The new plan, necessary to get the green light from the EU to access the Monti bonds (without which the institution's Tier 1 drops to 6,5%), also includes a cut in exposure to derivatives and the invested portfolio in Btp.
c) Great attention to Ansaldo Sts, as Enrico Letta's road show in the USA kicks off to solicit investments in the Bel Paese. The Finmeccanica subsidiary is the first suspect on the privatization front. On Friday, the title was the most bought + 2,54%. The stock gained 4,6% for the week. Representatives of the main trade unions and the management of Finmeccanica meet today, whose debt for a long time has been demoted by Moody's to junk status.
d) During the week, Chrysler should deliver the documents to the SEC for the start of the IPO process to be held by the end of the year. A scenario not appreciated by Fiat but made necessary by the distance between Sergio Marchionne and the union's Veba fund, owner of 41,5% of the package. According to Philippe Houchois, an authoritative UBS analyst, the IPO process will serve the parties to set a price for the shares but will not necessarily result in the listing.
e) Board battle today for Parmalat two days before the decisive hearing in the civil proceeding relating to the acquisition of Lag. On Friday, Parma prosecutor Gerardo Laguardia said that next Wednesday the public prosecutor's office will reiterate the requests for revocation of Parmalat's board of directors and cancellation of the operation, on the strength of the latest report by ad acta commissioner Angelo Manaresi.
BEHIND THE WEEK OF RECORDS
The S&P 500 index rose 1,3% in New York to 1,709.91. Since the beginning of September, the increase has been 4.7%. The Dow Jones Industrial Average also rose 75.03 points or 0.5 percent. Both indices surpassed the all-time record set on August 18 on 2 September, on the occasion of the announcement of the Federal Reserve on the postponement of the tapering. From the lows of March 2009, the increase is 153%. The 2,76-year T-bond is in arrears of up to XNUMX%.
Very strong fluctuations for gold which closed the week at around 1.330 dollars an ounce (-33 dollars on Friday) on similar values to seven days earlier but after having risen to a maximum of 1.380. Week of increases also in Europe. The Stoxx Europe 600 index rose by 0,9% to 314.2 (+12% from the beginning of the year) to the highest since June 2008: September (+5,7%) was the best month in the last two years.
The Eurostoxx50 index completed a week with a gain of 2,2%, Madrid, our direct competitor, rose by 2,4%, Frankfurt (+2% approximately) presented itself at the electoral appointment on Sunday with the visiting card of the new historical record. During the week, the Milan Stock Exchange +2,4% managed to keep up with the other markets in the euro area.
MILAN UNDER THE SIGN OF BANKS
The weekly balance of Piazza Affari, limited to our blue chips, is brilliant with 36 shares up and only 4 shares down. The excellent performance of financial stocks catches the eye: Ubi Banca is the best stock of the week with +7%, second in Europe only to Banco de Santander +9,1%. Mediobanca also takes the podium +5,1%, rewarded by the results. The top ten also include Azimut +4,5%, Intesa Sanpaolo +4,4% and Banco Popolare +4,3%.
Good results also for Exor +4,8%, Snam +4,6%, Buzzi +4,6% and Tenaris +4,2%. Profit-taking instead penalized Mediaset (-2,8%), returning from a stellar performance since the beginning of 2013 (+110%). BUT on Friday the stock rebounded +1,73% thanks to Morgan Stanley which raised the target price from 2,15 euros to 3,65 euros (equalweight) underlining that Italian television advertising is more than 30% below the levels medium. Enel Green Power is also in negative ground, -1%.
