The shock of the Paris massacres hangs over the markets. The opening of the Asian lists coincides with the news of the French air raids on Raqqa, the capital of ISIS. But let's start again without giving in, for now, to the risk of panic selling.
The forecasts for European openness are not dramatic. Paris: Cac 40 index down 111 points to 4697 points. London: Ftse 100 -45 points to 6.073. Frankfurt: Dax index -145 points to 10.563. The danger of a psychological meltdown seems to have been averted, but the problems associated with the slowdown in economies, the fear of a rise in US interest rates and the crisis in raw materials remain.
Oil records a slight gain: +1,2% to 44,98 dollars a barrel after the massive losses (-8%) last week. The rebound of gold was also modest (+0,8% to 1.092 dollars an ounce). The Asian stock markets were negative, but recovering after the first prices: Hong Kong -1,6%, Tokyo -0,9%. Chinese markets contain losses to half a percentage point. The most affected sector is that of airlines: Virgin Australia loses 7%, China Airlines -3,2%. Cathay Pacific -2,3%.
YUAN WEAKER AFTER IMF GO-Ahead
Market performance is conditioned by Tokyo's GDP data. Japan is officially back in recession. In the third quarter, the Japanese economy fell by 0,8%, more than expected by official estimates. It is the second consecutive drop (-0,7% from April to June), largely due to the drop in investments (-1,3%). The data on consumption is more encouraging (+0,5%). The news is unlikely to prompt the Bank of Japan to promote new expansionary measures.
The rate of the yuan was fixed this morning at 6,3750 against the dollar, down in the first session after the IMF's decision to include the Chinese currency in the club of currencies that make up the special drawing rights. General manager Christine Lagarde declared that the Chinese currency fully meets the two fundamental requirements: widespread circulation at a global level and compliance with market criteria for determining the price. The official decision is scheduled for November 30. It is a great success for the policy of President Xi Jinping, who is determined to accelerate China's transition from a manufacturing economy to a more service-oriented model.
INFLATION DATA TODAY. TALK DRAGONS
Geopolitics breaks into the economic agenda. The attention of the markets is now focused on the G20 in Turkey where the big names will discuss the Syrian crisis. Eurozone inflation data will be released this morning. At 11 in Madrid it will be Mario Draghi's turn to give an initial response to the anxieties of the markets for the attacks, which have in any case inflicted a severe blow on consumer confidence: the president of the ECB could provide new indications on the measures that the ECB is about to launch December 3rd. Before that date Draghi will speak on Friday at the German bank assembly in Frankfurt- A speech by the president of the Bunderbank Jens Weidmann is also expected.
Meanwhile, the Robin Hood Investor Conference opens today in New York, the current appointment for the great hedge fund managers. It has traditionally been the forum where the investment ideas of market players, from Third Point's Daniel Loeb to Greenlight Capital's David Einhorn and Kase Capital's Whitney Tyson, are compared.
MILAN STARTS AGAIN AT -3%. THE BLACK JERSEY AT MEDIASET
The Parisian drama has plunged into already stressed markets waiting for the rise in US rates. On Friday on Wall Street, the S&P index closed down 3,6% for its worst week since August. The worst sector was that of energy stocks (-7,1%). Retail stocks are also down sharply: Macy's, Netflix and Priceline have lost 5,2% in the last five sessions. There is great anticipation for Wal-Mart's quarterly report which has declined by more than 30% since the beginning of the year. European squares are also bad. The other markets of the Old Continent did worse: the worst was Paris (-3,5%). The overall index of the Stoxx 600 European Stock Exchanges lost 2,6%, gaining 7,8% from the beginning of the year.
Milan left 3% on the ground. Year-to-date gain tapers to 14,8%. At the top of the performance rankings Banca Popolare di Milano (+6,55%) and Bper (+4,12%) stand out ahead of Campari (+3,70%). Enel also did well (+2,24%). Long list of losses. Among the banks Monte Paschi falls (-7,40%) ahead of Unicredit (-5,57%). The worst stock, with a double-digit drop, was Mediaset (-10,27%), ahead of Ferragamo (-10,05%). The quotation returned to the January levels at 21,94 euros. The fall of Exor (-8,50%) after the placement of 5% of the capital was also heavy.
S&P CONFIRMS ITALY RATING. HELLRNIC BOND IN RECOVERY
On Friday evening Standard & Poor's confirmed Italy's long-term sovereign rating at BBB-, with a stable outlook, at the bottom of the so-called 'investment grade' and is the lowest among those of the four agencies followed by the ECB. S&P had demoted Italy one step in December last year.
Meanwhile, the Canadian agency Dbrs has confirmed the B rating for Portugal, which will thus be able to avoid exit from the ECB's securities purchase programme. Good news on the eve of the center-left government appointment. Improve Greece. The yield on the ten-year Greek bond, which jumped to 18,7% in July, returned below 7%: for those who dared to take risks, it was the deal of the year. u
FIAT CHRYSLER PROMOTED BY MOODY'S
Fiat Chrysler took note of Moody's promotion of the outlook from stable to positive on Friday evening. The decision reflects the expectation that FCA will continue to benefit from favorable sales trends in the NAFTA and EMEA regions over the next 12 months which, together with the expected launch of new models and measures to increase pricing power, they will underpin its profitability.”
ENEL AND TELECOM LEAD THE BROADBAND
New test on the market for Enel, after the green light from the board for two "extraordinary" operations: the merger with the subsidiary Enel Green Power and the establishment of a newco to invest in broadband, the new generation telecommunications network.
Enel's entry into the telecommunications game is also linked to developments at Telecom Italia, which already owns the current copper network. The Italian leader in the sector has launched a 700 million investment plan for the cabling of the 100 major cities, but has no intention of participating in a "condominium" network company. In the spotlight Vivendi's moves: Vincent Bolloré aims to strengthen the position in view of the dilution due to the conversion of savings.
UNIPOL: COOP SHORTEN THE CHAIN OF CONTROL
Also awaited for the reaction of the markets to the anticipations of the weekend on the reorganization plan of the Unipol planet. There will be no merger between Unipol Gruppo and UnipolSai but a strong simplification of the chain of control upstream of the holding company. Finsoe, the box in which 31,4% of Unipol is kept, will be dissolved and distributed to the newly formed Coop Allenza 2.0, which will own 21,45%, while Holmo will have 7,48%. The Unipol shares are held by Finsoe at a price of 9,95 euros, well above the current quotation of 4,48 euros, a difference which, according to the hondin, is justified by the majority premium.
