Asian stock markets rallied this morning following yesterday's message from Fed Chairman Jerome Powell. It is easy to predict that the long wave is destined to reach even the European lists, which were cold yesterday in the face of the signals coming from Wall Street. Yesterday, for the first time in its history that began in 1957, the S&P 500 index exceeded the 3-point barrier during the session, reaching a maximum of 3.003,98 points. Optimism was fueled in the evening by the publication of the minutes of the last FOMC meeting, yet another confirmation of the imminent rate cut.
THE USA READY TO HIT THE WEB TAX
But the tension on the front of relations, not only commercial, between the powers remains high: Donald Trump has ordered an investigation into the tax on digital services that France is preparing to approve with significant effects on the giants of the web, an initiative similar to the one assumed at the time to the detriment of China, at the origin of the war on tariffs. Also for this reason, the Stock Exchanges appreciate but do not go crazy in the face of a prospect of a first cut of a quarter of a point already taken for granted.
CHINESE PRICE LISTS RISE, KOSPI +1,2%
Overnight, however, the Asian Stock Exchanges received the message and aligned themselves. This is the situation this morning: Hong Kong's Hang Seng +1,1%, Shanghai and Shenzhen CSI 300 +0,3%, Seoul's Kospi +1,2%, Tokyo's Nikkei +0,5%, Sydney +0,4%.
The S&P 500 index corrected lately to 2993,07, +0,8% on the previous day but three points below the record set last week. The Nasdaq also advanced by 0,8%, better than the Dow Jones (+0,3%).
COMCAST SHINES ON WALL STREET, THUMP OF LEVI'S
Comcast shone on the list (+2,3%): the largest cable operator in the United States received a positive opinion from Goldman Sachs, which raised its recommendation to Buy from Neutral, bringing the target price to 54 dollars from 44 dollars. Levì's Strauss instead dropped sharply after the quarterly (-11%).
But Powell's words above all had the effect of restarting the decline in market rates.
BONDS DOWN, GOLD AND OIL ADVANCE
The 2-year bond, the barometer most sensitive to Fed decisions, trades at 1%, down seven basis points. The 8277-year bond slipped to 2,0630, only to recover this morning to 2,04%.
The decline of the dollar also resumed, traded at 1,1263 against the euro.
Cheaper money also drives up the price of gold, which this morning reached 1.424 dollars an ounce, up 0,3%: +1,5% yesterday at the close.
Powell effect also in the +4,4% recorded yesterday for Brent oil, but we must also consider the drastic drop in stocks in the United States, which fell by 9,5 million barrels last week, three times more than consensus. While waiting for the first hurricane of the season, about a third of the plants in the Gulf of Mexico were shut down. North Sea oil rose 0,3% to $67,2 a barrel this morning.
SAIPEM SHINES AFTER CONTRACTS IN ASIA
In great evidence in Piazza Affari Saipem (+3%) after the signing of two contracts in Saudi Arabia for an amount of 3,5 billion dollars. Eni +1,2%, Tenaris +1,8%.
POWELL CHALLENGES TRUMP: I WON'T LEAVE EVEN IF HE ASK ME
Nonetheless, Fed Chairman Jerome Powell sent out a loud and clear signal: rates must come down. Not because Trump is asking for it, but because, despite the growth in employment, the health of the economy has been deteriorating in recent months. “If you ask me – he said answering questions from MPs – how much the latest job increase weighs on our assessments, I'll answer zero”. He is more concerned with the slowdown in the global economy, with Asia and the Eurozone in the lead, but also with inflation fading and, not just a sign, the growing inequalities in the labor market.
No less drastic is the judgment on pressure from Donald Trump. “How would he react if one day Trump said that pack your bags, you are out?” Republican Maxine Waters asks him. "Simple, I wouldn't do it." "Sorry, I didn't hear," the parliamentarian replied, treacherous. “My answer would be no,” Powell confirmed. The gag didn't end there because Miss Waters insisted. "Dear madam - the banker cut short - I have to repeat myself: I have a four-year mandate and I want to respect it". And the scene ended with the applause of the Democrats but also of the majority of Republicans, not at all convinced by Trump's interference.
POSITIVE BUSINESS PLACE, THE REST OF EUROPE IN RED
The wind from the Fed in Europe is only good luck for Piazza Affari, which reaps the benefits of the relief brought to bank accounts by the race for Italian government bonds. The other markets, on the other hand, are slowing down, weighed down by profit-taking on the Bund which has returned to over -0,30%, after falling below this threshold for the first time since 24 June. The European Commission's growth estimates confirm Italy's problems, only +0,1% this year, +0,5% next- But alongside this sore but well-known note, comes an even more bitter novelty: the Germany, irreplaceable locomotive of the Old Continent, rises by only 0,5%, an Italian pace.
Piazza Affari (+0,73% to 22.044 points) is the only list to close in positive territory thanks to oil and financial markets.
The other markets were in the red: Frankfurt -0,48%, Madrid -0,28%. Paris (-0,08%) and London (-0,07%) are almost flat.
BOT RATES DOWN. BTP AUCTION TODAY
Yesterday the Treasury placed 6,5 billion annual BOTs with a yield down by 13 basis points, to -0,061%, the lowest level since May 2018, before the Conte government took office.
The yield of the German Bund yesterday rose by eight basis points to -0,32%, allowing the spread to decrease with the BTP below 200 basis points. The ten-year German government bond, offered yesterday morning in the new zero-coupon version, had little success, the ratio between supply and demand dropped to its lowest level in the last year and a half.
The spread between the Spanish and Italian 128-year bonds drops to XNUMX basis points, a level not seen since March.
Today last appointment with the mid-month auctions. 5,5 billion euros will be offered in 3- and 7-year BTPs. The performance of securities on the gray market anticipates a further decline in yields.
In particular, the three-year BTP rate closed at 0,581%, well below the 1,05% of the mid-June placement.
The rate of the seven-year BTP was set at 1,367% also in this case, down from the 1,96% of the placement in mid-June.
THE DECLINE IN THE SPREAD PUSHES ITALIAN BANKS
In evidence in Milan the banks (+0,2% the sector index, better than the rest of Europe) supported by the drop in yields and the reduction of the spread.
Positive Unicredit (+1%), Ubi Banca (+1,8%) and Banco BPM (+1%). Banca Monte Paschi's rally continues (+5%).
EQUITA: THE STOCK EXCHANGE DOES NOT EVALUATE PROGRESS ON NPLs
A report by Equita shows that in the last 12 months, Italian banks have lost 22% on the stock market, even if they have cut NPEs by 36% and the spread has fallen by 30 basis points, with obvious benefits on the balance sheet.
Optimism returns also on Deutsche Bank +2% which lost almost 10% in two sessions following the announcement of the maxi recovery plan.
Generals +0,2%. It has entered exclusive negotiations to buy Portuguese insurance company Tranquilidade, reports Reuters.
SNAM ADVANCES, TERNA AND ITALGAS WEAK
In the main basket, the good performance of Snam (+1,1%) should also be noted: Exane Bnp Paribas raised the recommendation to "outperform" from "neutral" and the target price to 4,9 euro from the previous 4,8 euro. Sign instead for Terna and Italgas, both -0,4%.
Sale Atlantia awaiting confirmation of interest in participating in the Alitalia operation.
Well Inwit (+3,2%) after Credit Suisse raised the target price to 10,40 euros from 8,7 euros, on a more detailed picture regarding the structure of the agreement with Vodafone on the towers.
