"Thanks to your vote, tomorrow will be a new day for America." Thus Nancy Pelosi, Democratic speaker in the House, greeted the conquest of the majority in the House after eight years. “He was a great, indeed a tremendous success”, was Donald Trump's comment: the Republicans, in fact, are strengthening their grip on the Senate and defending the Texas stronghold.
Beyond the interpretations, the mid-term elections have changed the political balance. It will be much more difficult, if not impossible, for the president to proceed with a new chapter of the tax reform, with new cuts for the middle classes. Also in matters of duties and immigration policy (starting with the famous wall with Mexico) the president will have to face perhaps insurmountable obstacles. It is also obvious that the Democrats will exploit the greater political clout by reopening some uncomfortable dossiers, from Trump's alleged tax evasions to his relations with Moscow. It is unlikely that an impeachment request will be reached, but it is certain that Trump no longer has his hands free.
Judging by the initial reactions, the new situation does not displease the markets. "Historical precedents - reads a note from Pimco - say that Wall Street likes a situation of balance between political forces". Futures on the Nasdaq rose by 0,4%, those on the S&P index by 0,3%, with the dollar slightly down, to 1,145 against the euro. Wall Street indices were up about 0,6% yesterday.
China's stock markets are up. Hong Kong gains 1%, Shanghai 0,4%. The Japanese Stock Exchange was weak in the final session (-0,28%), but with very low volumes: Nikkei +0,5%. On parity Seoul. Mumbai closed for Diwali holiday.
Oil is still weak, held back by the broad derogations on the embargo on Tehran. In addition, the United States anticipated yesterday that its oil production will reach 2018 million barrels per day in 10,9, up from 9,35 million a year earlier, the strongest year-over-year increase in history. Crude from the North Sea closed down 1,4%, today trading at 72 dollars a barrel, 14 dollars less than the highs for the period reached in October. The drop in prices is accompanied by a rebound in oil refining margins in the Mediterranean area, which fell significantly during the summer. Eni sells 0,74%, Saipem about 2,1%.
FLAT BUSINESS PLACE. THE PMI INDEX ANTICIPATES A DECLINE IN GDP
With the US elections archived, the rift between Italy and the European Community returns to the fore, confirmed by the lack of progress at the Ecofin meeting. Meanwhile, negative signals continue to arrive from Italy. The PMI services index closed below 50, far below estimates. “The figure – commented Giuseppe Sersale of Anthilia – suggests the possibility of a drop in the gross domestic product in the fourth quarter of the year: the sharp slowdown clearly shows that the Italian economy is increasingly suffering from political tensions and turbulence of the market".
In the meantime, the confrontation with EU partners is not resolved: the European Commission is asking for "substantial" changes to the maneuver to be communicated on the 13th. If there are no changes, on November 21st the Commission could draw up a critical report on the Italian debt, the first step of a disciplinary procedure against Rome.
Little movement yesterday in Piazza Affari: -0,07% to 19.268 points. Frankfurt was also almost flat (-0,09%). Paris -0,51%. The decline in London was much more marked, held back by the disappointing accounts of Vodafone and British Telecom.
The spread closed the day at 298. The 3,40-year yield rose to XNUMX%.
INTESA BEATS ESTIMATES, TOWARDS A RECORD DIVIDEND
The Piazza Affari index was supported by some more positive quarterly results than expected.
In great evidence Intesa San Paolo (+1,28%), thanks to count above expectations and the confirmation of the guidance on the dividend. "We confirm all the objectives of the 2018-2021 Business Plan, the profit targets" and the pay-out for the end of 2018", said the CEO Carlo Messina in the conference call with analysts commenting on the quarterly results. “I am a lover of dividends – he added – I can say that at the end of the year the shareholders will be very happy”. The leading banking group in Italy ended the third quarter with a net profit of 883 million euros above analysts' estimates of 785 million. The institute aims to close the year with a net profit of more than 3,8 billion, thanks to 3,4 billion of net capital gains deriving from the partnership with Intrum to be booked within the year.
Intesa's performance allows the sector index to close up by 0,7%. Unicredit (+0,6%) and Banco Bpm (+0,9%) also rose. Ubi (-0,6%) and Bper (+0,7%) are down.
CAMPARI AND MEDIASET, EXCELLENT RAISES
The other positive note concerns the accounts of Campari (+3,7%), best blue chip of the day. The company closed the first nine months with an adjusted profit before taxes of 249,4 million, +4,7%. Adjusted EBITDA was $299,8 million. Net debt also improved from 981,5 million to 913,8 million.
Purchases also on Mediaset (+2,4%) favored by the 2,5% increase in advertising revenue over the nine months.
COOL BROKER ON FERRARI
Brokers, on the other hand, rejected Ferrari's results (-2,13%). SocGen has decided to lower the target price to 103,50 euros from 113 euros, the judgment remains Hold. JPMorgan cut its price target to $122 from $127. Another broker, Invest Sec., reduced it to 123 euros from 133 euros, while confirming the Buy.
Weak Fiat Chrysler (-0,22%) despite the promotion of SocGen to Buy. Note the leap of Juventus (+10,15%).
