Gentlemen, the music has changed: "The current trend of the economy and future forecasts justify this evolution". Thus Jerome Powell buried the season of near-zero interest rates and easy money. The Federal Reserve has in fact decided to double the tapering compared to the indications of a month ago: purchases on the market will drop by 30 billion a month to cease completely in March.
TOWARDS THREE US RATE RISES IN 2022
In 2022, there will be three quarter-point increases in the cost of borrowing. The concept of the "transitory nature" of inflation is cancelled: prices will rise by 2,7% in 2022 (from the 2,3% previously estimated) and to 2,3% in 2023 (from 2,2%), while the forecast for 2024 remained unchanged at 2,1%, close to target.
A nice turnaround, no doubt about it. But, at least for now, the music of Wall Street hasn't changed. On the contrary, the Bull has increased its pace, to the point that Apple, with a rise of 2,85%, has touched the 3 trillion dollars of capitalization, stopping at 2.940 billion.
NASDAQ RUNS, FUTURE UP
How to explain Wall Street's response? The turning point certainly did not come as a surprise. Not only. President Powell spread optimism in the press conference, guaranteeing both the stability of the recovery and the increase in employment. Meanwhile, the decline in oil gives hope at least for a slowdown in the race for fuel. Or, more simply, it will take time for the market to adjust to the new fundamentals.
The Nasdaq accelerated late in the session to close with a 2,1% gain. S&P500 +1,6%. Dow Jones +1,1%.
This morning, futures anticipate a bullish start for European stock exchanges.
THE BONDS ARE QUIET, THE CHINESE SQUARES ARE BRAKING
No palpable reaction to the FED's decisions on government yields. 1,45-year Treasury at 10%. 0,91-year BTP at 126% with a spread of 0,36 basis points. German Bund -XNUMX%.
New problems for real estate and US sanctions (also included in the black list Djic, leader of commercial drones) are holding back Chinese markets.
The CSI 300 index of Shanghai and Shenzen stocks fell overnight as fears resurfaced over relations between Beijing and Washington Semiconductor Manufacturing International, China's largest chip maker is down 2%, down to lows in last two years.
Hong Kong's Hang Seng was also down (-0,5%), penalized by the tech component. Hang Seng Tech (-1,4%) hits a new long-term low.
FLY TOKYO EXPORT. NIKKEI +1,7%
Tokyo Nikkei Index +1,7%. The Ministry of Finance communicated tonight that in November exports returned to rise after five months: the year-on-year increase was +20,5%, an increase attributable to steel products and machinery for the chip industry . Taipei Taiex +0,6%.
THE RUPEE FALLS, NEW CLOSURES IN SOUTH KOREA
Kospi of Seoul +0,2%. South Korea returns to drastic measures to contain the surge in cases and victims of Covid-19. The government has decided to reduce the maximum number of people for private meetings to four nationwide and to reintroduce a 21pm curfew in the opening hours of restaurants and bars.
Mumbai's BSE Sensex is up 0,3%. Indian rupee slips to new lows since June 2020 as country's trade deficit hits 30-year high and omicron variant is a threat.
WTI oil was up 0,9% to $71,6 this morning.
EUROPE ON STAND BY WAITING FOR ECB AND BOE
Sitting in the name of uncertainty for the European stock exchanges between Scilla (increase in infections from Omicron) and Charybdis (the decisions of the US central bank arriving at 20 pm, Italian time). Today will be a field day for the Europe of banks. In addition to the ECB communications entrusted to Christine Lagarde's press conference, the central bank of Switzerland, the central bank of Norway and the central bank of England also speak in the morning.
The national bank of Turkey also deserves a special note: another fall in interest rates is not excluded, going against the trend.
MILAN +0,41%, INFLATION AT 3,7%
The spread between 10-year BTPs and Bunds of the same duration fell to 128 basis points (-1,49%), with the BTP rate falling to +0,91% (-0,37% for the Bund).
Istat has revised downwards the data on Italian inflation for November to 3,7% (from 3,8%), still the highest since September 2008. On a monthly basis there was an increase of 0,6%.
Piazza Affari +0,41%, at 26.666 points, is among the few lists in green. Contrasted by the other European lists: Frankfurt +0,18%. Chancellor Olav Scholz, in his debut to Parliament, said: "We expect about 23 years in which we will have to and will be able to get out of fossil fuels, in other words, the biggest transformation of industry and the economy of the last 100 years" . Paris +0,47%; Amsterdam -0,04%; Madrid -1,23%.
LUXURY ADVANCES, CHEAP CLOTHING SUFFERS
The clothing giant Inditex (Zara and others) leaves 5,22% on the ground in Madrid after reporting gross margins lower than expected. Even the Swedish H&M loses momentum (-2,80%) after the quarterly accounts.
Luxury is doing well in Paris: Lvmh +1,5%, Hermés +2,5%. Worth mentioning is a report by Jefferies which focuses on the "significant" impact of cryptocurrencies on the performance of luxury goods, starting with works of art.
On the contrary, Carrefour sinks (-5%) after Auchan's blunt denial on the negotiations between the two groups.
THE CITY COMES DOWN, BOJO ON THE ROPES
London -0,65%, pending rate decisions. The pound weakens as the UK records an all-time record of infections since the start of the pandemic, 78.610, with another 165 deaths: infections from the new mutation have almost doubled, rising from 4.671 to 10.017. The government is on the ropes, weakened by the friendly fire of the hundred Tory MPs who voted yesterday in the House of Commons against the anti-Covid restrictive measures of its plan B (although approved thanks to the help of Labour). Hospitalizations for Covid have increased by 10% nationwide and by a third in London, in a week, driven precisely by the variant.
BANKS SHOW: BPER TARGETS CARIGE AND POP. SONDRIO
Banks still in the spotlight in Piazza Affari. The opening title goes to Bper (+6,08%), in flight after the non-binding offer for the purchase of Carige (+13,65%) approaching the price of one euro per share of the takeover bid the Modenese institute will have to launch the acquisition of 88,3% of the bank now controlled by the Interbank Deposit Protection Fund (FITD).
Pop is also up. Sondrio (+3,9%) for operators is another piece of the growth plan of Bper and its reference shareholder, Unipol +1,3%. The rest of the sector was weak, including Big Intesa (-1%) and Unicredit (-1,8%).
GENERALI, THE DONNET PLAN IS LIKED BUT NOT ENTHUSIASTING
Interest in the Generali plan cooled down during the session (+0,14%; an abundant percentage point up at the start). The CEO Philippe Donnet, promoted by majority vote from the board (but with Caltagirone's no and the absence of Del Vecchio's representative), presented higher than expected targets, as well as, surprisingly, the first buyback (500 million) in 15 years.
SPOTLIGHT ON THE DIASORIN PLAN, RECORDATI RACES
To follow the health sector. Diasorin is in turmoil (+2,4%) on the eve of tomorrow's Investor Day. Equita Sim expects revenues to grow at an average annual rate (CAGR) of 5,2% and 2,8% for adjusted EBITDA.
Recordati does even better (+2,6%).
CUCINELLI (+5,85%) SHOCKS THE FORECASTS
The luxury sprint in Paris infects Moncler (+2,6%) and exalts Brunello Cucinelli (+5,85% after raising the 2021 guidance). The king of cashmere yesterday announced an improvement in the targets relating to turnover (+30% compared to 2020), ebitda margin (about 14%) and net debt (35 million euros against 65 million) thanks to the state of grace of the brand in fourth quarter across all markets. Equiia, Mediobanca and Banca Akros have raised their estimates
OVS GOES SBOOM (-7,6%): BENEFIT TAKEN AFTER THE RECORDS
The slowdown in casual clothing (Inditex and H&M) was instead reflected in Ovs, which lost 7,6%%, slipping on last November's prices, despite the increase in guidance. The stock suffers profit taking, understandable given that the shares are up 2021% since the beginning of 150.
UTILITIES RISE. IN IGD RALLY
The oil companies are in the red: Tenaris -1,1%, Saipem -1,6%, Eni -1,2%. On the contrary, utilities are advancing: Terna +1,6%, Enel +1,1%. Igd's rally continues: +4,3% after the presentation of the industrial plan. Record brick also for Risanamento (+11,3%).
