US markets up slightly, dollar barely moved. Investors thus took note of the most obvious verdict in the recent history of Fed meetings. The central bank indeed decided, as expected, that rates would remain unchanged, but added that “the inflation rate is starting to reach within the target of 2% per year”. Hence the prospect of a "gradual" increase in the cost of money starting from the March meeting, the first led by the new chairman, Jerome Powell, and which will probably continue with a new adjustment in June.
Janet Yellen delivers to her successor a good situation, much better than that inherited from Ben Bernanke: employment is rising (234 new jobs in the private sector in January), consumption and investments. Powell has the difficult task of reducing the liquidity in circulation, controlling the increase in prices and thus containing the risks of a forthcoming recession.
ASIA IN THE RALLY, BUT CHINA MARKS TIME
The performance of the markets confirmed the good tone of the advanced economies. The Asian price lists are positive. Japan's stocks are on track to close higher this morning as the yen weakens against the dollar to 109,2. Nikkei index +1,2%. January closed with an increase of 2,8%. Other Asia Pacific Stock Exchanges are up. Seoul +0,3%, Mumbai +0,5%.
Chinese markets uncertain, despite the PMI index signaling a robust rise in manufacturing activity. The CSI 300 index of the Shanghai and Shenzhen stock exchanges (the tech index is at its lowest for six months) is down by 1,1%, Hong Kong -0,4%. In January casino revenues in Macao soared: +36,4%.
Wall Street does not hide its optimism. After two downhill sessions yesterday the indexes returned to climb waiting for the shower of results from tonight onwards. The Dow Jones rose 0,28%, S&P 500 +0,05%, Nasdaq +0,12%.
GOLD ACCOUNTS FOR BOEING, ZUCKERBERG CONVINCES ANALYSTS
Boeing's accounts (+4,9%) boosted the price list: the Seattle giant, one of the stocks most favored by Donald Trump's policies, announced profits beyond estimates and record deliveries of new commercial aircraft for the 2018.
After high voltage exchange for Facebook, the first of the giants of the new economy to announce the results. The share of the social network first fell by 4% when analysts learned that, thanks to the measures taken to reduce the transmission of fake news, traffic fell for the first time (50 million hours a day less) . But the stock finished the long day up 1,4% after Mark Zuckerberg's conference call. The founder of the social network, supported by Sheil Sanberg, argued, numbers in hand, that the network has developed a strategy capable of multiplying profits despite the drop in traffic. “I want to be clear – he said – the yardstick for measuring our profitability has never been the number of conversations per se, but the quality of traffic and connections”. In the meantime, revenues and profits are growing sharply (+47% in the last 12 months).
Disappoints Microsoft, down 2% in the aftermarket. The stock posted a loss of 82 cents per share due to the impacts of the tax reform.
OIL, HISTORICAL RECORD FOR US PRODUCTION
Oil moved little: US crude inventories this week grew beyond expectations to +6,8 million barrels. Meanwhile, American production has returned to all-time highs, to the levels of 1970 before the traditional wells were exhausted. Thanks to shale oil, US extractions have returned to 10,04 million barrels a day.
PIAZZA AFFARI CLOSES JANUARY AT +7,5%
Contrasted European markets, despite less pressure on bonds, good data coming from the labor market and the dollar's rise in the afternoon, pending the verdict of the Fed.
In Piazza Affari, the Ftse Mib index (+0,11%) recovered in the afternoon after a morning in pale red, closing at 23.507 points. During January, the index gained 7,5%, the best performance of last March, clearly better than the other European stock exchanges. I alternate the performance of the other markets: London drops -0,72% while the skirmishes with the EU on Brexit are rekindled. Better Paris (+0,15%) and Madrid (+0,22%). Flat Frankfurt (-0,06%). The drop in consumption in December was more pronounced than expected: -1,9% against -0,4% expected.
INFLATION DOWN, UNEMPLOYMENT DOWN TO 10,8%
In January, the eurozone consumer price index grew by 1,3% on an annual basis, down from 1,4% in December, but in line with the consensus of economists. The "core" index, on the other hand, rose by 1% against 0,9% in December.
"An ample degree of monetary stimulus remains necessary for underlying inflationary pressures to continue to rise," said ECB member Benoit Coeurè, who expects "key interest rates to remain at current levels for an extended period of time." and well beyond the horizon” of Qe.
Good news for Italy arriving from the war front unemployment, which fell in December at its lowest level for over five years, however against a drop in employment and an increase in inactivity, while the creation of new jobs mainly comes from fixed-term contracts. In December, the unemployment rate fell to 10,8%, the lowest since August 2012, from 10,9% the previous month. On an annual basis, the positive balance of employees of 173.000 units is entirely linked to the increase in temporary employees (+303.000) while those with permanent contracts fell (-25.000) and self-employed workers fell (-105.000).
BTPs MOVED LITTLE, STRESS TEST FOR THE BANKS OF ATHENS IN MAY
In this context, after the sales of the last few days, purchases of government bonds have recovered, considered at the moment less risky than shares: the yield on the ten-year Bund drops to 0,69% from 0,70% on Monday. Even the Italian bond closed a transition session around parity characterized by few ideas and lack of direction.
The yield differential between the Btp and the Bund on the ten-year stretch settled just below 140 basis points and the rate just above 2%. The round of Italian auctions at the end of the month ended with the reopening of the bonds that went to auction yesterday, which saw the placement of a total of 1,44 billion euros.
The European Central Bank is to publish stress test results of the four largest Greek banks in May to help fill any capital shortfalls before Greece exits its bailout program in August. The test results of the other 33 lenders from euro zone countries will be published on 2 November.
TARGET SHOOT ON LEONARDO, EURO ALARM FOR STM
Leonardo's crisis continued in Piazza Affari - 2,02% to 9,72 euros after the heavy drop -12% suffered on Tuesday after the presentation of the industrial plan whose objectives were judged below expectations. Société Générale and JP Morgan, plus other brokers lower their target price this morning. The analysts of Banca Akros, which confirmed the buy recommendation on the stock and the target price at 14,25 euros, believe that the sales on the stock are excessive.
Stm is also under fire (-1,39%). The new wave of sales was triggered by the profit warning launched by the competitor Infineon. The German company expects the weakness of the dollar to weigh on revenues and estimates revenue growth of 5% year on year, much less than the previous +9%.
A complicated session is announced for Salvatore Ferragamo (yesterday -1,26%) who, with the markets closed, published the 2017 revenue figure which confirms the negative forecasts of analysts: result down to 1,393 billion euros (-3,1 % at current exchange rates).
ITALGAS AT THE TOP, TELECOM SALES
The lessened pressure on rates favored the rebound of utilities. The best blue chip of the day was Italgas, +2,14%, which in the afternoon announced the closure of two already known transactions, namely the purchase of business units of Amalfitana Gas and AEnergia Reti. Positive A2a +0,88%; Enel +0,83%. Citigroup reiterated the buy opinion, target price 5,5 euros.
Telecom Italia also rose (+0,61% to 0,726 euro) on which Banca Akros confirmed the accumulated rating with a target price of 1,12 euro. President Arnaud de Puyfontaine said he was "confident of being able to close all open questions and therefore be able to start a new phase in relations with the institutions", reaffirming his faith in the work of CEO Amos Genish.
Contrasted banking: the good intonation of Banco Bpm (+0,87%) and Bper (+0,82%) are contrasted by sales on Ubi Banca (-1,37%). Very volatile Creval, which closed at +3,69% but fluctuated between 9,813 and 10,954 euros in the session.
FINCANTIERI, COMPARING ITALY AND FRANCE TODAY
Outside the main basket, Safilo closes down by 5,94% after 2017 accounts with sales lower than expected and the forecast of an EBITDA more than halved to 38-40 million.
Worth mentioning is Fincantieri, -1,24% on the eve of today's meeting in Rome between the ministers of Italy and France involved in the project of the alliance on military ships between the company and Naval Group.
