"Anyone who compares us to Volkswagen has smoked something illegal." Sergio Marchionne hasn't gone back a step after the outbreak of the probably most serious crisis in his decades-long government of Fiat, which exploded just as the stock was reaching its 18-month record price and the hypothesis of an alliance with GM or a another Big, under the benevolent eye of Donald Trump.
Instead, the rude awakening came in the form of a press release from the Associated Press which referred to the accusation by the US authorities of the Italian-American company of having violated the Clear Air Act, by rigging the emissions of around 104 vehicles. The EPA, the American environmental protection agency, has underlined that FCA could incur heavy civil penalties: the fine could amount to up to 44.539 dollars for each of the Jeep Grand Cherokee and Dodge Ram with 3.0 diesel engines from the 2014 years , 2015 and 2016 indicted for a total of approximately 4,63 billion dollars.
IN WALL STREET THE STOCK COLLAPSES (-10,3%) BUT RECOVERS COMPARED TO MILAN (-16%)
A blow that knocked out both Fiat Chrysler, which ended up knocked out in Milan with a loss of 16% at 8,78 euros, and the parent company Exor (-9,4%). On Wall Street, the stock recovered some positions, closing in the evening at 9,90 dollars (-10,3%) from a low of 9,2 dollars. The price corresponds to approximately 9,30 euros. Negative consequences also for Ferrari (-2,22%) and Cnh Industrial (-1,36%).
And now? "Fca's 2018 targets are confirmed," said Sergio Marchionne during a conference call, adding, with regard to any provisions, that the company "really hopes not to make any." But it is clear that the unexpected Dieselgate, against which the group will fight with the utmost determination, threatens to call into question all the strategies (and accounts) of the group.
TODAY THE QUARTERLY REPORTS OF THE US BANKS START
The FCA case is the latest poison pill to arrive from the ranks of the outgoing administration. The leaders of the EPA, appointed by Obama on the basis of an environmental program that the new president sees as smoke and mirrors, have closed the investigation before the White House changes the rules. Another challenge for Trump, as the feeling creeps in after the president's (disappointing) press conference on Wednesday that the dollar and Wall Street's upward push for Trump's nomination has already subsided even before his settlement.
Carl Icahn, the financier closest to the president, in fact sold a large part of the shares bought immediately after the vote to take advantage of the victory effect. But it is by no means excluded, on the contrary, that the bull run could resume today, after the publication of the accounts of Bank of America and JP Morgan. It was the banks that started the post-election rally. Now, favored by the descent of the debts accumulated by the producers of shale oil, the credit giants can once again be the driving force for the Bull.
CHINA: TRADE BUT HOLDS BACK, BUT NOT WITH THE USA
Meteo Borsa forecasts a contrasted closing of the week. Asian price lists conditioned by the drop in the dollar (this morning the euro trades at 1,0630 against the US currency, +0,8% over the week). Tokyo stock exchange (+0,5%), Hong Kong +0,4%. On parity Shanghai. Seoul -0,5%, Sydney -0,7%.
China's trade balance reports a 6,1% drop in exports for 2016, worse than expected. Imports also fell (-3,3%). The commercial surplus was thus reduced to 40,82 billion dollars. But trade with the USA (+5,5%) and Korea is on the rise, while those with the European Union (-4,7%) and Japan (-5,5%) are holding back.
Closing in red for the American Stock Exchanges, cautious on the eve of the start of the earnings season; the Dow Jones index (-0,32%) once again postponed the climb to 20.000 (closing at 19.891). The S&P 500 (-0,21%) and the Nasdaq (-0,29%) were also down after seven upward sessions. Worst Disney blue chip, down 1,8%.
The president of the Fed of Saint Louis, James Bullard said in an interview yesterday on CNBC television that the time has come for Republicans to move from electoral proclamations to action. Bullard believes that there are currently no strong reasons to intervene on the cost of money.
Oil rises as a result of production cuts by Saudi Arabia and Russia and the increase in Chinese demand. Brent trades just above 56 dollars (+1,7%), Wti at 53,01 dollars. Stocks in the sector fell on Piazza Affari: Eni -0,5%, Tenaris -1,2%, Saipem -2,8%. Banca Akros raised the target price of the share from 0,43 to 0,49 euro.
SCUDERIA AGNELLI WEIGHS IN MILAN, BLACK JERSEY
The Fiat Chrysler case heavily conditioned Piazza Affari, nullifying the positive effect of the improvement in industrial production. The markets await today the verdict of the rating agency Dbrs on the Italian debt. The black jersey of the day is up to Milan. The Ftse Mib index closed at -1,69% at 19.156 points, accelerating downwards in the last part of the session.
The decline in Frankfurt was also more modest but significant (-1,01%). Paris -0,61%, unchanged Madrid. A very modest gain of 0,03% allowed London to add another positive session to its record streak (13 hikes in a row).
The decidedly better than expected trend recorded by Italian industrial production in November offers support to GDP in the last quarter of 2016, a year in which the Italian economy may have touched growth of 1%. Production recorded an increase of 0,7% on the month after +0,1% in October, a figure revised upwards from the zero change initially indicated. The median of analysts' expectations was for November to grow by 0,3% on a monthly basis.
DBRS, TODAY THE ITALIAN DEBT REPORT CARD. A 15 BTP IS UNDER STUDY
On the debt market front, the prospect of an upcoming issue of a 15-year BTP conditioned the session. The rumors about the new bond that could be issued as early as next week pushed the Btp/Bund spread to a session high of 167 basis points. The ten-year rate rose to 1,91%.
The launch of the new 15-year bond is in any case subject to the outcome of the review by Dbrs of Italy's A(low) sovereign rating, due to a possible cut. A downward revision by the Dbrs would have the consequence of excluding Italy from the maximum rating category in relations with the ECB, entailing a worsening of the conditions applied by Frankfurt on Italian government bonds used as collateral.
Yesterday the Treasury placed the maximum amount in the auction of 3,7 and 20-year BTPs. Yields fell for 3 and 7 years, while the result was up on the XNUMX-year.
FLY UBI THANKS TO THE GOOD BANKS, GREEN LIGHT TO THE UNICREDIT INCREASE
Field day for the banking sector: the sector index dropped 1,2%. Both Intesa (-1,4%) and Mediobanca (-2,4%) fell sharply.
The positive boost came from Ubi, up 9% and at its highest since June. The Bank announced that it had offered one euro for the three banks saved at the end of 2015, Nuova Banca Marche, Nuova Banca Etruria and Nuova Carichieti. The offer is subject to the following conditions: the three banks must get rid of 2,2 billion euros of non-performing loans and must complete a capital increase of 450 million euros paid by the resolution fund. Ubi will proceed with a recapitalization for 400 million to keep the Cet above 11%. There are no differences compared to the first offer, a sign that the ECB has not asked for anything else.
The UniCredit shareholders' meeting (-1,7%) approved the 13 billion capital increase with a Bulgarian majority: 99,6% of the capital present said yes to the plan by CEO Jean Pierre Mustier, who said he was "extremely confident" about the outcome of the operation, adding however that "we need to work hard".
Meetings with numerous potential subscribers will begin on Monday. The vice president Luca Montezemolo stated that there have been contacts with the Aabar fund, a shareholder of the bank with 5%, regarding participation in the subscription of the new shares. The results are positive, but no decision has been made.
Critical is the president of the CariVerona Foundation, Alessandro Mazzucco who, in confirming the positive vote, however wanted to underline "the bewilderment in understanding that the Board invites us to a certainly worrying and very ponderous operation while up until the beginning of last summer it continued to demonstrate full and unconditional confidence in the management at the time and to reassure that things were under control, that non-performing loans were stable or declining and that credit quality was constantly improving”.
Among the insurance companies, Generali -1,2%, Unipol Sai -2,9% (the stock has left KeplerCheuvreux's list of favourites). Benefits were also taken in asset management: Azimut -2,2%, Banca Mediolanum -2,2%.
MEDIASET DOWNS (-4%), AGCOM: THE WEIGHT OF TV IS UP
Thud by Mediaset (-3,99%) after the sharp denial by Fininvest to the rumors of a possible agreement with Vivendi which had prompted an increase in prices. Kepler Cheuvreux (target from 2,8 to 4,1 euros, rating hold) considers a possible proposal from Vivendi to the Italian holding to be possible.
The growth in the weight of the radio and television area emerges from the update of the Sic (integrated communications system) approved yesterday by Agcom. The growth of free generalist TV, and therefore above all of the Biscione, could have an impact on the potential risk taking place on the national market, limiting the space of Vivendi, 24,7% strong in Telecom Italia, even if this is not considered a shareholding control.
Telecom Italia (-1,42%) yesterday placed a six-year senior bond for half the amount of one billion, collecting orders for over 2,5 billion. The yield was set in the 240-point area.
MEDIOBANCA PROMOTES HERA (+3,2%)
The effect of Trump's statements was felt on the rest of the list. Leonardo Finmeccanica loses 3,32% after Donald Trump's attack on the times and costs of the F35 fighter program.
Remaining with the words of the US president in pectore yesterday, the criticisms of drug costs affected Recordati (-1,94%). Outside the main basket, Trump's attack hit Pierrel (-5,62%) and BB Biotech (-3%).
In strong evidence Hera (+3,23%) on which Mefiobanca Securities raised the target price from 2,7 to 2,75 euro, confirming the outperform recommendation following the presentation of the plan.
