The Federal Reserve seems intent on raising rates in December despite inflation remaining at a standstill. This is what emerged from the minutes of the meeting held on 19 and 20 September of the Federal Open Market Committee, the monetary policy arm of the US central bank. “But many bankers – reads the minutes – have expressed concern that the low inflation this year may reflect not only transitory factors”. Thus the call to "proceed with patience" has not been lacking. In summary, the probabilities of an increase in December remain high (86,7%) but the more cautious tone than expected has held back the dollar and supported the euro, which jumped to 1,1853 in the evening. The latest rumors about the next Fed president have taken care of keeping up the morale of the US market: according to Politico.com it will be Jerome Powell, backed by Treasury Secretary Steven Mnuchin. Powell is the candidate deemed most "friendly" by Wall Street.
Meanwhile, in Europe the tension on the Spanish crisis is declining, perhaps too soon. Lightening also for banks: the European Commission is already working on a comprehensive package of measures aimed at reducing the level of existing non-performing loans and avoiding their accumulation in the future. Barring twists and turns on the Rosatellum, Piazza Affari is heading towards a peaceful end to the week.
THE BULL TRIUMPHS IN ASIA: TOKYO AT THE HIGHEST SINCE 1996
The triumphal march of Asian stock exchanges gathers speed: ten days after the elections in Tokyo, the Nikkei index rises by 0,37% after reaching 20.980,92 points, a record since December 1996. The Asia Pacific index is at its highest since December 2007. Primacy also in Seoul +0,2% and in Hong Kong +0,45%.
QUARTERLY REPORTS ON THE WAY. JP MORGAN ON STAGE TODAY
The autumn quarterly season has started under good auspices on Wall Street. Delta Air Lines +0,3% (profits down, but higher than estimates) and Blackrock +1%, the world's largest asset manager, announced an 8,2% increase in net profit %.
Tonight the parade of the big banks begins, starting with JP Morgan and Citigroup. Analysts are lukewarm: the drop in volatility and the bland trend in loans do not allow us to expect large gains.
APPLE ENROLLS SPIELBERG, RUNS WAL-MART
Two old lions thought to give the market a boost: Wal-Mart +1,9% (in view of the sale of 800 traditional stores) and Johnson & Johnson +2,1% after a report by Jefferies on the excellent performance of the pharma division.
The indices thus extended their positive streak: Dow Jones and S&P 500 both +0.18, Nasdaq Composite +0.25%.
The latest moves by the big names in the digital economy are worth mentioning:
Apple +0,4 to $156,55 accelerates the creation of original content by teaming up with director Steven Spielberg to produce new episodes of 'Incredible Stories', the popular American series of the 1980s.
Alibaba +0,5% will invest the monstrous figure of 13 billion euros in research and development on artificial intelligence in the next three years. Director of Technology, Jeff Zhang, has announced the opening of seven new research laboratories around the world dedicated to data processing, the Internet of Things and human-machine interaction
Downside session for oil, awaiting data on US inventories: Wti at 50,87 dollars and Brent at 56,52.
In Piazza Affari a bad crash for Saipem -3,4%: Goldman Sachs has lowered its recommendation. In a report on the European oil services industry, experts say expectations are too high and award levels too low. The same business house reduced the target price on Tenaris -1,54% (from 14,3 to 12,3 euros), confirming the neutral recommendation. Eni +0,58%. Saras -0,8%,
MILAN AND MADRID TO THE RESCUE. DRAGONS AT THE IMF TODAY
Recovery day for the price lists of the so-called European periphery. The news on NPLs and from Spain restored good humor to operators. Today, at the meeting of the Monetary Fund in Washington, Mario Draghi will speak.
In Milan, the Ftse Mib index scored a rise of 0,97% to 22.552 points.
Madrid did even better +1,34% even though the Spanish prime minister, Mariano Rajoy, has taken the first step towards activating article 155 of the Spanish constitution, the so-called "nuclear option" which allows the prime minister to suspend the political autonomy of Catalonia.
Flat Frankfurt, +0,17%, Paris -0,02%, London -0,06%.
THE SPREAD FALLS, THE BTP AUCTION TODAY
The euro takes off. In the morning trading, the single currency jumped up to 1,1834 against the dollar, at the latest since 26 September, to then rise again in the US session.
Closing up for the Italian bond market, subject to coverage after the failure to formalize the independence of Catalonia.
The Italian 2,164-year rate is at 2,189% from 171% at the end of the session. The spread narrows to 175 basis points from last night's XNUMX basis points.
Today the attention of operators will also be directed to the medium-long term auctions of the Italian Treasury.
The Ministry of the Economy is making up to 7,5 billion euros available in 3,7 and 30-year bonds, including the new Btp October 2020, coupon 0,20%, offered for 3,5-4 billion.
Yesterday, on the gray market, the stock offered a yield in the 0,21% area which, if confirmed at auction, would represent the highest since July.
ORFINI (PD) PUSHES FOR CDP IN TELECOM
Milan accelerated towards the end thanks to the leap of Telecom Italia +2,65%.
The reason for this extension lies in the declarations of the president of the Democratic Party, Matteo Orfini, who spoke of the opportunity for separation of the network and the prospect of an integration with Enel's Open Fiber by designing this scenario: Vivendi relinquishes control, a new shareholder enters, perhaps Cassa Depositi e Prestiti (Cdp), and the national telephone network was born. The goal is to achieve corporate integration between the Tim network, Open Fiber, controlled by Enel and CDP, and the other networks.
On the other hand, Mediaset loses momentum -0,5% awaiting development of the negotiations with Vivendi.
Enel is also on the back foot, +1,76% to 5,20 euros, which also benefits from the positive intonation of utilities at a European level: the sector basket gains a generous percentage point.
BANKS IN RECOVERY: NPLS ARE LESS SCARY
The other upward contribution came from the banking sector (+1,4%) following the announcement of the measures proposed by the European Commission on the subject of non-performing loans. Banco Bpm +4,8% and Ubi Banca +4% were especially strong, the institutions that suffered the most in fear that the rules proposed by the ECB could be applied to the existing stock of NPLs.
UNDERSTANDING IN RED, CATHOLIC STILL FLYING
Intesa closes in the red, downgraded to "neutral" from "overweight" by JP Morgan Cazenove who believes it will have to reduce its dividend estimates for 2018 and 2019 following the impact of the new ECB guidance on non-performing loans on the bank's Cet1 .
Among the insurance companies, UnipolSai +1,6% and Unipol +2,7% performed well. Cattolica's flight continues +4,6% on new highs since 2014.
HSBC PUSHES BUZZI, STM REFUND THE BONDS
The industrial values are also positive:
– CNH Industrial +0,6% after data on agricultural equipment registrations in North America. Fiat Chrysler +1,2%, Ferrari +0,7%.
– Stm +1,14% exercised the option right for the early repayment of all its outstanding convertible bonds maturing in 2021
– Robust purchases on Buzzi +1,67%: HSBC confirmed the buy recommendation and the target price of 29 euros after a roadshow in Italy. The visit, the experts pointed out, strengthened their conviction regarding the recovery of the market in our country and a possible further consolidation.
– Ferragamo -0,35%: MainFirst lowered the target price of the stock to 19,5 from 20 euros (underperform recommendation)
RCS, THE COLLECTION GOES UP. AND JUVE RETURNS TO THE RACE
In the rest of the list:
– Retelit leap +6,73% on the wave of rumors about F2i's interest. For now, F2i itself specified, there are currently no formal negotiations between the two companies.
– Rcs closed the session with a +1,25% at 1,3 euro. During an event held in Milan, it emerged that Urbano Cairo has "very good results for October, November and December" in terms of advertising sales. Cairo Communications also rose +2,65%.
– Landi Renzo's race resumes +3,98%. Mediobanca Securities raised its recommendation to neutral from underperform with the target price going from 1,6 euro to 0,32. Analysts focus on the new plan.
– Juventus also runs +4,59%.
