There is no particular reason to justify the decline in the price lists in the first session of the second quarter. But, both on the geopolitical and on the financial front, the market has realized that the time has come for prudence, waiting for the quarterly reports to guarantee new oxygen for the Bull. US markets await the outcome of President Xi Jinping's forthcoming visit, his first direct contact with Donald Trump. Meanwhile, they are trying to estimate a price to risk North Korea.
In the meantime, the shadow of terrorism returns to obscure the optimism of the Europeans in St. Petersburg, already concentrated on the final sprint of the French presidential elections, truly to be lived à bout de souffle. In this context, the markets seem to suffer more than expected from the reduction in purchases by the ECB, neglecting instead the good data coming from the real economy and from employment.
In short, many small details of a picture that seems less brilliant and lively than the debut of Trumponomics, more or less 100 days ago. But in great movement and capable of surprising. Yesterday's Wall Street overtook Tesla's value over Ford, confirming the vitality of the system.
Finally, it looms a glimmer of exit from the crisis of the Venetian banks, the last stage of the ordeal of Italian finance. It is a pity that the spread, which has risen to over 200 basis points, stands there as a reminder that Italy remains the Eurozone's crock pot, the most fragile in the event of a violent shock coming from France.
TOKYO HOLDS DOWN, OIL DOWN
Prudence also dominates on active Asian lists. Today the Chinese, Hong Kong and Taiwan stock exchanges are closed for public holidays. The Indian Stock Exchange also stops. Weak Tokyo, down by an abundant 1% in the last stages, as usual held back by the race for the yen, the safe haven currency par excellence in moments of political tension.
The shares of Hyundai (-2,9%) and KIa motors lose ground in Seoul: China has cut purchases of Korean cars in retaliation against the installation of US missiles against Pyongyng.
New slap to Toshiba (-9%) on the eve of the meeting between the top management of the giant, overwhelmed by the nuclear crisis, with the creditors.
Oil is also slowing down after the recovery of Libyan production and the doubling of the activity of US shale oil wells compared to a year ago. Brent traded this morning at 53,12 euros, WTI crude oil just above 50 dollars. In Piazza Affari Eni -1%, Tenaris -0,3%. Leap of Saipem (+3,3%).
LEAKY SITTING FOR WALL STREET
Day of declines on Wall Street in anticipation of the Trump summit with the Chinese president. The Dow Jones index lost 0,06%, the S&P 500 0,15%, Nasdaq - 0,29%.
The dollar is flat against the euro at 1,067. The yield on the 10-year Treasury Bill fell to a five-week low at 2,33%, from 2,38% at the close. On the other hand, sales on government bonds with shorter maturities, with a consequent flattening of the yield curve.
Second consecutive day of appreciation of gold to 1.253 dollars: this morning it rose again to 1.257 dollars.
TESLA IS WORTH MORE THAN FORD, THUD OF GM
Dominating the market's attention has been the slowdown in the auto industry. After the long rally, the four-wheeler market in the United States is in sharp decline, accompanied by the sharp increase in insolvencies on purchase installments. The titles of the Detroit Bigs are paying for it.
General Motors drops by 3,4%, Ford by 1,7%, overtaken by Tesla (+6,7%), in very strong acceleration after the increase in vehicle deliveries in the quarter: 25.418 units (+69% compared to a year ago) against the 23.200 expected by Goldman Sachs. “Bad times for Shortville,” that is, for bears, Elon Musk tweeted. At today's prices, the manufacturer of luxury electric cars is worth 48 billion dollars against 45 for Ford.
THUMP OF FIAT CHRYSLER TOO, BUT IT'S BOOM IN ITALY
The collapse of the US market also affected Fiat Chrysler (-4,8%), worst stock in the Stock Exchange, despite the good sales results in France and Spain, confirmed, with the Stock Exchange closed, by the excellent performance in Italy: + 21,3%, with a market share of 30,14% from 29,35% in March 2016. In the ranking of the ten best-selling cars in March, the group places seven models out of the top ten in the ranking.
But the decline in the American market weighed on the stock: overseas sales fell by 5% in March in North America, against a growth forecast of 0,4%.
ELKANN ADOPTS THE DRUMS MODEL FOR SHOPPING
Exor, the financial company at the heart of the Agnelli empire, has decided to adopt the Tamburi model. The holding, anticipated John Elkann in an interview with the Financial Times, intends to start a series of purchases of minority shares in small and medium-sized Italian companies according to the successful model developed by Tip: a company with a strong export vocation , with solid and determined management or ownership and a well-defined growth plan. Elkann cites Eataly, Moncler and Technogym as examples.
Exor, on the eve of the quarterly accounts, thus intends to return to investing in Italy but with a different attitude than in the past when Fiat's footprint on the Italian economy was the signal of a hegemony that belongs to the past, Elkann himself underlines. "The historical perception of Fiat has now changed in Italy," said the lawyer's heir. Exor can play an important role in favoring the debut and take-off of medium-sized companies on the American market, Elkann underlines.
MILAN -1,2%, EUROPE SUFFERS FROM THE REDUCTION OF QE
More than the bomb on the St. Petersburg metro, the decrease in the purchases of securities by the ECB probably had the greatest influence on the decline in European stock markets. After three months of bullishness, the first session of the European financial week recorded a sharp decline.
Meanwhile, the euro hit a three-week low against the dollar, at 1,0650 dollars. Piazza Affari closed the first session of the week in the red, highlighting one of the worst performances today in Europe. The Ftse Mib index lost 1,22% to 20.242 points.
The other European markets were also weak with Madrid (-1,32%) in line with Milan. A little better but still in the red Frankfurt (-0,45%), after coming close to the record in the morning. Paris -0,71% awaiting the televised debate between the presidential candidates. London -0,55%.
The PMI showed that euro zone manufacturers struggled to keep up with demand in March despite activity picking up at the fastest pace in nearly six years. The Italian PMI manufacturing index elaborated by Markit/Adaci rose in March to 55,7 points from 55,0 in the previous month, confirming itself well above the 50-point threshold which separates growth from contraction.
THE SPREAD EXCEEDS 200 POINTS, RAIN OF PURCHASES ON THE BUND
A session to be forgotten for the Italian secondary, which returns to widen the delay on the Bund but above all appears particularly penalized against the Spanish card. BTPs slip, with the 2,32-year yield rising to 2,30% from last Friday's 0,28%. The yield on the Bund drops to 203% and the spread widens by four basis points to 2014, the highest since the beginning of 136. The Bono premium over the German benchmark stops at XNUMX basis points.
The market seems to be betting that the slow pace at which the Qe program will continue from today, which drops from 80 to 60 billion euros per month, will penalize above all the Italian benchmarks. In the meantime, the publication of both weekly and monthly statistics by the ECB has been postponed until tomorrow. Relating to February, the latest data from the central bank highlight subscriptions of 8,499 billion of Italian government bonds by the Eurosystem, with a total rising to 96,265 billion.
In an interview with today's edition of “Expansion”, ECB chief economist Peter Praet defines the current monetary policy stance as still perfectly adequate, given that the encouraging signals from the economic surveys side are yet to be followed by the so-called “hard date".
The St. Petersburg attack also weighed on the market. The German 0,29-year rate is down to 5%, its lowest in a month, while the yields on the two- and XNUMX-year benchmarks slip to a two-week low. In addition, the yield on the British XNUMX-year bond is brought to its lowest level since October.
WEAK BANKS. THE ECB ASKS FOR 6,8 BILLION FOR THE VENETIAN REGIONS
Positive smoke signals from the European political authorities and regulators, who in recent days have the ball in hand for the rescue of the two Venetian institutions, Popolare di Vicenza and Veneto Banca. “Everyone is sitting around the table with the aim of arriving at a common solution that is efficient, sustainable and in the interest of financial stability – said a Portvoice of the European Commission – We are confident that a solution on this basis can be found in the next weeks".
Meanwhile, after Popolare di Vicenza it was Veneto Banca that closed the accounts of a terrible 2016: a billion and a half euros of net loss, compared to the 882 million of red in 2015. Almost all the result is the result of value adjustments on loans and other assets, equal to 1,29 billion (+58,7% on the previous year). Provisions for risks and charges more than tripled to 433 million. At an operational level, the loss of the group that ended up in the dust after the years of grandeur under Vincenzo Consoli's management is 177 million.
Bloomberg writes that the EU Supervisory Authority is asking for an injection of 6,8 billion (2 more than expected) for the two banks. Bad day for banks, not only in Italy. The European Stoxx index of the banking sector falls by 1,6%, with significant drops for the Spanish BBVA (-2,3%) and for Deutsche Bank (-2,9%). In Piazza Affari Unicredit - 2,5%, Intesa -1,6%, Banco Bpm -2,3%, Mediobanca -2,2%. Insurance companies down: Generali -0,3%, Unipol -1,2%.
TODAY THE UNIEURO FRESHMAN MAKES THE DEBUT
In the rest of the price list, the debut of Unieuro, a company founded by the father of Eataly entrepreneur Oscar Farinetti in 67, which however today belongs to a private equity fund, is worth noting. The offer has been reduced in quantity and price compared to initial forecasts. Instead of 8,5 million shares (equal to 42,5% of the capital) it was decided to place 6,36 million, for a free float of 31,8% which will rise to 35%. The price of the IPO was set at 11 euros, below the minimum of the indicative range of 13-16,5 euros. The company will not receive anything from the listing, because all the shares on the market have been made available by the shareholder-seller.
