Will the polls, for once, have seen it right? After the shock of Brexit, but also the surprise outcome of the referendum on the peace agreement in Colombia, Donald Trump can only hope for the umpteenth embarrassment of the forecast wizards, who give, after the FBI acquittal, a large margin of advantage to Hillary Clinton. The Reuters poll even attributes a 90% probability of victory to the Democratic candidate, who will experience the emotions of Election Day in Philadelphia, together with Barack and Michelle Obama and Bruce Springsteen.
The Stock Exchanges have already anticipated the verdict with strong increases. Why is finance deployed so explicitly for the former secretary of state? “Hillary represents continuity with the Obama administration – comments Nouriel Roubini, guest in Milan at Claudia Segre's Global Thinking -. On the contrary, Trump has a well-deserved reputation as a disruptor, with disturbing ideas on immigration, foreign policy and free trade". And stock exchanges, as we know, don't like leaps into the void.
“Frankly, I don't know – continues the economist – who Trump is and what he will do. He could follow the example of Ronald Reagan who soon adapted to Washington's rules, starting with respect for the roles of the administration. Or, strengthened by the thrust of populism, he will want to force the balance. We just have to wait, without forgetting that populism is distributed in the US between Republicans and Democrats (see the role of Bernie Sanders). And soon his shadow could be felt on the stock exchanges, judged as enemies of the people ”. But this will be discussed after the conclusion of the Great Race.
THE STRONG YEN WEIGHTS ON JAPANESE BALANCE SHEETS
Asian stocks cautious this morning after Monday's euphoria. The Msci Global index settles at yesterday's values, the best session for 12 weeks. Tokyo rises by 0,1% in the final session. Hong Kong +0,2% and Shanghai +0,3% despite worse-than-expected trade balance figures (both in terms of exports and imports) and the sharp drop recorded by currency reserves. Seoul +0,3%, Mumbai +0,1%.
The negative campaign of the quarterly reports, which is weighed down by the impact of the strong yen, is holding back the performance of the Japanese stock market. Profits are down sharply (-9,3%): the big names that have already approved the accounts (including Nissan, Panasonic, Mitsubishi, Honda and Sony) report a decline in profits of 30 billion dollars.
WALL STREET AT FULL SPRINT. FLY THE MEXICAN PESO
The US stock markets posted their best session since March 2.08st: the Dow Jones rose by 500%, the S&P 2,22 index by 2,37%. The Nasdaq is even better (+5%). “I don't believe in a 7% rally if Clinton wins, but if Trump wins we could go down at least XNUMX%. This is how an operator from Charlotte, North Carolina (one of the states in the balance) summarizes the mood of the financial community for Reuters.
Expectations this morning for the Mexican peso after yesterday's jump: +2,3%. BlackRock's iShares MSCI Mexico ETF (EWW.P), better known to industry insiders as the “Trump ETF,” jumped 5.12%, its best performance in 5 years.
The biggest gains on Wall Street came from banks and tech stocks. Microsoft gained 2,9%, Alphabet 2,7%. Apple +1,44%. JP Morgan (+3,3%) and Goldman Sachs (+3.1%) also performed well. Morgan Stanley (+3,3%). The brightest stock was the pharma Biogen (+6,72%), after the announcement that one of its new drugs is effective in some forms of muscle atrophy.
The dollar also slowed down this morning: yen at 104,33, euro at 1,1085 unchanged compared to yesterday. Gold is weak at 1281 dollars an ounce after yesterday's plunge.
HISTORIC AGREEMENT OF TOTAL AND CHINA WITH TEHRAN
The crude oil market was also challenged: operators predict that the next OPEC meeting will not end with an effective agreement on production ceilings. Brent traded this morning at 46,22 dollars a barrel (+0,15%), WTI crude at 44,86 dollars.
Total and China National Petroleum yesterday signed the first industrial agreement with Ural after the end of the embargo. The two companies will sign an agreement this morning for the start of investments to exploit the gas fields of South Pars, among the most important in the world.
In Milan Eni closed at +1,43%. Tenaris +1,17% to 13,02 euros: Goldman Sachs raised its target price on the stock from 13,1 to 13,3 euros, confirming the neutral recommendation.
MILAN +2,56%. 6 BILLION BOTS COMING THURSDAY
European markets were also euphoric yesterday under the push coming from the USA. On the other hand, macroeconomic data did not have a significant impact on eurozone markets, where retail sales in September fell, in line with the consensus, by 0,2% month on month, while they grew by 1,1% on annual basis.
Milan was the best Stock Exchange closing at 16.737 points, with a gain of 2,56%. The other lists follow with a considerable gap: Paris is in fact advanced by 1,91%, Frankfurt by 1,93%, London by 1,7% and Madrid by 1,45%.
While the Chamber continues to examine the maneuver, the confrontation between Italy and the European Union is once again tense. The President of the Commission, Jean Claude Juncker used unusually polemical tones towards Prime Minister Matteo Renzi. “Italy continues to attack the Commission, wrongly. This does not produce the desired results,” the former Luxembourg prime minister told a conference of European trade unions.
Instead, softer signals on the ECB front. The most important exponent of the strict current on the board of the European Central Bank, the German Sabine Lautenschlaeger, defended the current ultra-expansionary orientation of monetary policy, declaring however skeptical about the opportunity for further cuts in the cost of money or stimulus measures additional. “The phenomenon of low interest rates – she maintained – is more complex than what the debate in Germany might suggest”.
Positive closing for the Btp, in line with the other markets of the periphery of the Eurozone. In the auction on Thursday 10 November, the Ministry of the Economy will make available to investors 6 billion euro in 12-month Treasury bonds, against a maturing amount of 6,6 billion.
Today's quarterly schedule is busy: Mondadori, Banca Carige, Banca Generali, Banca Mediolanum, Pop. Milan, Pop. Sondrio, Banco Popolare, Campari, Credito Valtellinese, FinecoBank, Igd, Maire Tecnimont, Mediaset, Moncler, Prysmian, Rai Way, Sabaf and Txt.
ITALGAS-SNAM RISE TO 16,6 BILLION IN VALUE
Piazza Affari yesterday celebrated the return of Italgas, one of the historical stocks of the Italian market, listed on the Milan Stock Exchange way back in 1900 (although in reality it had already been listed on the Turin Stock Exchange in 1853, well before the unification of Italy, in the middle of the Savoy kingdom) to then be delisted by Eni in February 2003. The freshman, born from the Snam spin-off, closed at 3,97 euros, down 0,70% compared to the reference of 3,998 set from Borsa Italiana. Snam instead gained 4,23%, to 3,94 euro on the adjusted reference price of 3,78 euro. Overall, the total capitalization of the two securities increased to 16,6 billion compared to that of Snam alone last Friday, which amounted to 15,99 billion.
The company reaffirmed its goal of increasing the market share in the gas distribution sector in Italy from the current 34% to over 40% and growing dividends by 2-3% per year in 2017 and 2018, compared to 20 cents already promised for this year, with a further increase from 2019, in the light of what will be the new post-assignment scenario of the gas tenders. Snam has a 13,5% stake in the capital of Italgas, Cdp Reti with Cdp Gas 26% and they will be linked by a shareholders' agreement on the shares. The free float is equal to 60,5% of the share capital.
EUROPEAN BANKS BOOM: MPS +22%
In Europe, the greatest increases were those of Banks (Stoxx of the sector +2,8%) and Insurance companies (+2,2%). In Paris, BNP Paribas and Société Générale jumped by 3,73% and 3,49%% respectively. In Frankfurt Deutsche Bank and Commerzbank jumped by 6,39% and 5,21%. In London, HSBC Holdings soared 4,49%, despite an 86% drop in third-quarter after-tax earnings.
The performance of the big Italians is in line: Unicredit advanced by 4,9%, Intesa +5,8% on the wave of the quarterly. Ubi (+4%) and Mediobanca (+4,3%) were largely positive. Monte Paschi scored a jump of over 22% thanks to the newfound euphoria of the market, with volumes almost double the average of the last month. The stock had lost 9% on Friday and 19% in the last week. Creval rose by 2,83% after the news that it is working on the sale of non-performing loans up to 1,5 billion with the use of the Gacs.
Among the insurance companies, Generali gained 2,4%, Unipol +2,7%. “At the moment we are not interested in the capital increase of Monte Paschi”, said the CEO of the company Carlo Cimbri yesterday. In Frankfurt Allianz rose by 2,9%, in Paris Axa +3,9%.
FERRARI ENGINES AND BREMBO BRAKES ROAR
The Automotive sector stood out among the industry stocks: Fiat Chrysler gained 5,2%. THE Better-than-expected results pushed Ferrari (+6,7%). Management has revised upwards its forecasts for the whole of 2016, now targeting an Ebitda of 850 million euros, compared to the previous estimate of 800 million. The year should close with revenues above 3 billion euros.
Brembo also rose (+4,73%) after the release of the results for the third quarter of 2016. Revenues grew by 11,1% to 566,8 million euros. Ebitda for the quarter amounted to 110,6 million euro, with a growth of 20,3%. Management expects good revenue growth for the remainder of the year and looks to the coming months with cautious optimism. Since the beginning of the year, Brembo stock, promoted in the Ftse Mib index, has risen by 22%.
TELECOM WEAK, INDUSTRY FLYING
Strong gains also for the rest of the industrial sector: StM +4,5% ahead of Prysmian (+3,7%) and Cnh Industrial (+3,7%).
Telecom Italia closed at -0,27% on the day of the conference call of the managing director Flavio Cattaneo. The group intends to reduce debt in order to bring the net debt/Ebitda ratio to less than 2018 at the end of 2,7. This result, said Cattaneo, can be achieved without the need to make sales and does not include any advance payments for the renewal of mobile frequencies. The company will present the new business plan for the 2017-2019 period next February.
