Negative rates? "No way". New monetary stimulus? “They will probably be needed,” even if they won't be painless. But every effort must be made to prevent the liquidity crisis of companies from becoming a solvency crisis. Fed chairman Jerome Powell left no glimmer of optimism in his speech yesterday at the Peterson Institute: we are faced, he repeated, with the risk of a prolonged period of recession capable of causing permanent damage to the productive system . Powell's words froze Wall Street, also because they coincide with other negative signals. Among these, Donald Trump's order to the main pension funds not to invest in Chinese shares, which has already aroused reactions in Beijing: the yuan is weakening again. In this climate, hope for a rapid exit from the emergency evaporates.
TOKYO (-0,7%) EASES THE EMERGENCY
Asian stock markets are down this morning. Tokyo's Nikkei loses 0,7%: in a few hours, Prime Minister Shinzo Abe should announce an easing of the state of emergency, with partial reopening of businesses. Hong Kong's Hang Seng fell 1,1%, the Shanghai Composite 0,5%, Seoul's Kospi 1,1%.
The reactions yesterday on the US markets were much more marked. The Dow Jones index (-2,17%) dropped more than 500 points. S&P 500 -1,75%, Nasdaq -1,55%.
TRUMP: “ALARM IS THE STUFF OF RICH SPECULATING”
America is increasingly divided between those who want to reopen all businesses as soon as possible – following the example of Elon Musk, who restarted the Tesla factory in California despite the state ban – and those who trust virologist Anthony Fauci.
Trump has taken issue with the diagnoses, which he says are too pessimistic, of Wall Street, which serve to solicit new aid. “They are maneuvers of rich people who aim to make money with discounts,” the president tweeted.
THE FUNDS INVESTED IN GOLD ADVANCE
The landslide of cruises continues: Royal Caribbean (-5%) has mortgaged 28 ships against a loan of 3,3 billion.
Brent oil is up 1,3%, to 29,3 dollars, from -2,5% yesterday.
It only holds the gold. Blackrock's Gold & General fund is up 55,8% year-to-date.
Futures signal a weak opening this morning in Europe: London -0,6%.
EU INDUSTRIAL PRODUCTION AT THE MINIMUM
The echo of Jerome Powell's pessimism contributed yesterday to accentuate the weakness of European stock markets, in the vain search for at least one note of optimism. The new data on the economic situation are not helping: Eurostat has released data on industrial production in the euro area, which show a drop in March of 11,3% on a monthly basis and 12,9% on an annual basis. This is the strongest contraction ever. Italy (-28,4%) is in the black jersey.
THE RELAUNCH DECREE HAS STARTED: 484 PAGES, 55 BILLION
The Council of Ministers has finally approved the relaunch decree, a 55 billion package of measures to fight the recession by supporting families and businesses: 25,6 billion will be mobilized to support workers, through the bonus for the self-employed and the refinancing of the Cig. After the battles in the majority, the amnesty for the regularization of foreign workers employed in the agri-food sector, as well as domestic cleaners and carers, has also been confirmed. Another 16 billion will be invested to support businesses in various forms. For all those with a turnover of less than 250 million, the Irap installment for June will be suspended.
BUSINESS PLACE - 2,14%, COMMERZBANK SCARES FRANKFURT
Banks and Exor knocked out Piazza Affari Piazza Affari: -2,14%, to 17.183 basis points.
Also in Frankfurt (-2,62%) the decline is linked to the trend in credit: Commerzbank, a state-owned company, leaves 6,8% on the ground after an unexpected quarterly loss of 295 million. Deutsche Bank in turn lost 3,4% following the news that the group's top managers will give up a month's fixed pay in an attempt to cut costs.
AMS CHIPS SUFFER, STM LOSES 2,8%
The crisis also affects Amsterdam. Ing was also in the red for the first time since 2013 (-5,4%): in the quarter the deficit was 395 million after provisions of 1,1 billion to cover non-performing loans. The chip maker Ams collapses (-8,16%). In Milan, Stm fell by 2,8%.
The heaviest losses are those of Paris (-2,85%). In contrast to Scor: after the break with Exor, Covéa could reopen the dialogue with the company in which it holds 8,4%. Better Madrid (-1,9%) and London (-1,55%).
THE BTPS ARE STEALD AT THE AUCTION, THE SPREAD TIGHTENS TO 231
Growing ending for the bond market after the good response to medium-term auctions.
The Treasury has assigned all the 9 billion offered: the fifth tranche of the three-year BTP maturing June 2023 (range offered 4-4,5 billion), yield 0,87% from 0,86% in mid-March; the eleventh tranche of the 7-year BTP maturing January 2027 (range offered 2-2,5 billion), rate of 1,53%, from 1,37% in mid-March; eighth tranche of the 20-year BTP in March 2040 (range offered 0,750-1 billion), yield 2,49% from 1,97% in mid-March. Finally, the sixth tranche of the off-the-run BTP in March 2,23 with a residual life of 2035 years, issued in September 15 (offered range €2018-0,750 billion) was placed at a rate of 1%.
The spread between Italian and German ten-year bonds narrows to 231 basis points; the rate of the BTP drops to 1,79%.
EXOR -7%. ELKANN ASKS FOR 175 MILLION INDEMNITIES
Exor (-7%) paid dearly for Covéa's decision not to honor the Partner Re purchase contract due to the refusal of the Agnelli holding company to grant a discount (apparently 2 billion) on the agreed price of 9 billion. The French group, second Les Echos, had proposed to pay 80% of the 9 billion already agreed in cash while the remainder would be liquidated in three years, once the effects of the coronavirus on the market had been verified. Now the battle turns to compensation. Exor demands payment of the 175 million indemnity envisaged in the pre-agreement. Covéa replies that he will not pay more than the 50 million already paid at the time of the agreement.
Mediobanca Securities has already revised the target price from 86 to 62 euros, but given the potential upside of 32% compared to the current market price, the rating remains outperform. Banca Imi also confirmed the buy.
In sharp decline Fiat Chrysler (-2,89%). The decline of Cnh Industrial was contained (-0,33%). Ferrari is doing worse (-1,47%) after breaking up with Sebastian Vettel.
DIASORIN TAKES FLIGHT, LEADER TITLE OF 2020
The best stock was Diasorin, which peaked at +7,48%, at 172,5 euros, starting to close at new all-time highs. The biotech company from Saluggia is by far the top stock on Piazza Affari: +89,35% in the last 12 months. Yesterday Canada also gave the green light to serological tests.
Bad day for the banks, also held back by the judgments of the rating companies. Most of all, Unicredit falls back (-3,85%): Fitch has lowered its medium-term rating to BBB-. Fitch's opinion also applies to Intesa Sanpaolo (-1,91%). Minus sign also for Ubi (-3,8%) and Bper (-3,33%).
Negative Poste Italiane (-4,1%).
THE DECLINE IN ADVERTISING HOLDS BACK MEDIASET
Mediaset also fell (-2,99%) after the quarterly report closed with a consolidated net result of 14,6 million euros compared to 36,7 million in the same period of 2019.
The utilities performed well: A2A +2,15%; Acea +2,5% after confirming the guidance communicated in March 2020, which envisages an increase in EBITDA of between 6% and 8% compared to 2019.
RENZO ROSSO (DIESEL) JOINS MASI AGRICOLA
Ima's decline continues (-4,6%): Kepler Cheuvreux has reduced the recommendation from hold to reduce, with the target price dropping from 48 to 46 euros.
In the capital of Masi Agricola (+2,9%), leader in the production of Amarone, Renzo Rosso, the industrialist who owns the Diesel group, appears with a 5% stake.
