The Fed is ready to step in to provide the economy with the funds it needs to tackle the liquidity shortage. It is not a return to Quantitative Easing, wanted to clarify the president Jerome Powell, at the time put in place to react to the collapse of Lehman Brothers, but a "technical" remedy to avoid damage to a healthy market. But the central bank's move has had the effect of an aspirin on the market, now convinced that it is grappling with a global crisis which, starting with the tug of war on trade, projects its shadows over the entire global economy which risks , data from the IMF, a damage of 700 billion dollars. This is the scenario in which an all-out confrontation between the US Congress and the president is projected, as well as the breakdown of the Brexit negotiations between Boris Johnson and the European Union. Winds of war are looming between Türkiye and the Kurds, abandoned by Washington. And so on. The markets, which already take for granted the failure of the talks between the big two which will begin tomorrow in Washington, are preparing for a long winter. Given the premises, the decline in Asian price lists is not surprising.
NISSAN SELECTS NEW CEO, KEEPS KOSPI
Down the Nikkei of Tokyo (-0,7%). Nissan loses hits (-1,3%) after the appointment of the new CEO, Uchida, formerly responsible for the brand in China. Hong Kong also down -0,5%. China's state television has decided to no longer broadcast NBA games, in response to a tweet of support for Hong Kong demonstrators written, but immediately deleted, by the general manager of the Houston Rockets, Daryl Marley. The Korean Kospi (+1%) is saved here too for political reasons: premier Lee Nak Yon will be present at the inauguration ceremony of the emperor of Japan, Naruhito. Thus the tension with Tokyo eased.
TOWARDS A STOP OF US PURCHASES OF CHINESE STOCKS
The Shanghai and Shenzhen lists are also in the red (-0,3%). the South China Morning Post of Hong Kong writes that China is considering closing the round of negotiations in Washington, scheduled for tomorrow, after just one day. The decision by the US Department of Commerce to put 28 Chinese companies on a blacklist for violating human rights has scuttled the prospect of an agreement, or at least a truce. Among these, there are two video surveillance giants that together control about a third of the global market.
To complicate the picture, according to Bloomberg, the White House is preparing to limit the investment possibilities of public pension funds in Chinese companies.
THE SHADOW OF IMPEACHMENT WEIGHTS ON WALL STREET
The climate on the US markets is even hotter: yesterday evening on Wall Street, the S&P500 closed down by 1,6% at 2.893 points, on the lows of the session, the Dow Jones -1,19%. NASDAQ -1,67%. They suffer more than all semiconductors (-3,1%).
The index had significantly reduced losses, when the governor of the central bank of the United States had announced a change of course on fiscal policy. But shortly after came the news of the unwillingness of the White House to cooperate with the investigation launched by Congress into the relationship between Donald Trump's entourage and Ukraine. The US presidency has ordered Gordon Sondland, US ambassador to the European Union, not to appear before three House committees where he was summoned to give testimony. Trump is facing charges of obstruction of justice, subject to another impeachment.
Oil is down slightly, while gold climbs to 1.506 dollars an ounce.
Amid all the turmoil, FX markets remain flat, with the exception of the pound, which is close to its lows against the dollar at 1,2196 and the euro.
THE STERLING FALLS, TOWARDS BREAK WITH JOHNSON
Lightning bolts also hit European price lists yesterday, when Downing Street, in a transparent attempt to shift the blame onto the European Union, spread the meaning of the phone call with which Angela Merkel has rejected Boris Johnson's latest proposal to avoid a hard Brexit. The Chancellor strongly reiterated that Northern Ireland must remain within the customs structure of the European Union. The comment of the President of the Council of Europe Donald Tusk was glacial: “Boris Johnson, the stake is not the victory in some stupid game to assign blame. At stake is the future of Europe and the UK and the security and interests of our people. You don't want an agreement, you don't want an extension, you don't want a revocation, quo vadis?”.
Hard to tell. It is said that so much fibrillation will not end with the hard Brexit, welcome to the British prime minister. A season of great turbulence is certainly almost certain, starting with currencies. The pound retreated yesterday to 0,897, down by half a point against the single currency).
MILAN -1,14%, QUIAGEN TILE OVER FRANKFURT
All the price lists of the Old Continent have suffered. Bad day for the Italian Stock Exchange, down by 1,14%, thus halting the series of three consecutive rises that began last Thursday.
Frankfurt also fell sharply (-1,07%). German industrial production rose 0,3% month-on-month in August, from -0,4% in July.
The German Qiagen, active in the diagnostics sector, crumbles on the Stock Exchange, -18%, after the publication of the preliminary data for the quarter and the announcement of the resignation of the managing director Peer Schatz. Sales will only grow by around 3%, against the +4-5% envisaged in the plan.
Paris -1,18%; Madrid -1,18%. London loses 0,75%.
Zurich -1,4%. Swatch (-2,4%) pays heavy tribute to Hong Kong crisis. Richemont was also in the red (-0,60%).
BTP IN DOLLARS EVEN AT 30 YEARS. FRIDAY AUCTION FOR 6,5 BILLION
The Economy Ministry announced that it has entrusted Barclays Bank, HSBC and JP Morgan with the mandate for a new dollar issue, the first for almost ten years. It will be a fixed-rate multi-tranche with maturities of five, ten and 30 years.
It will not be the only extra-euro operation. Missions in yen could soon be announced. Recent agreements with government bond specialists to contain the cost of hedging derivatives have facilitated the project.
Yesterday the BTP closed at a yield of 0,85% in line with the previous session.
In closing, the spread is 145 basis points from 143 on Monday.
At the auction on Friday 11 October, the Treasury will offer up to 6,5 billion in 3, 7, 15 and 30-year bonds.
ONLY FOUR BLUE CHIPS IN POSITIVE SOIL
In Piazza Affari, only four blue chips close on positive ground:
- Juventus (+0,23%) still supported by the return to the top of the standings.
- Telecom Italia (+0,42%) with a leap in the final on the spin-off hypothesis and subsequent IPO of the data center sector controlled by the telephone company.
- Banco Bpm (+0,56%) and Ubi (+0,51%), the candidates for a combination of two. Mediobanca Securities promoted Ubi to "outperform", while remaining "neutral" on Banco Bpm. The two banks intend to postpone the presentation of the industrial plans to the first part of 2020. It is legitimate to think that it could be linked to the existence of negotiations regarding the merger. It could also be that companies want to stall, in view of a clear stance by the ECB on non-performing loans.
The other banks are weak. Down Unicredit (-1,1%). Before the end of the month, it should sell at least a billion of non-performing loans, Unlikely To Pay loans should be sold at 35-40% of the nominal value.
DIASORIN AND FINECO GO DOWN, SAFILO COLLAPSES
In heavy asset management Finecobank which closed down by 4,65%. The institute bought the brand from Unicredit, at a price of 22,5 million euros.
There are more negative notes. The landslide of Safilo continued (-6,07%) in free fall after the prospect of a sale of the company to Kering, which also renewed the license for Gucci, vanished. In the red Salvatore Ferragamo (-1,99%) after UBS cut the target price to 17,6 euros from 18,5, leaving the neutral rating unchanged.
Among the worst Diasorin, which lost 5,7% penalized by the sharp decline of Qiagen.
