SOS. It's another time of emergency for the financial markets. It applies to the international situation, of the Trump doctrine that is upsetting the price lists. The domestic scenario is no less dramatic. Indeed, wherever you look, the situation deserves a red alert: by tomorrow, Minister Pier Carlo Padoan must develop a plan to recover 3,4 billion and thus return to the debt/GDP ratio; the growth of German inflation, never so high for 3 and a half years, gave the pint to the upward yield of the Btp and the spread; the advance on Unicredit's (dramatic) accounts confirms a "huge loss" a few days after the launch of the capital increase, the most challenging in Italian financial history.
For now, the ECB shield protects Italy from a devastating crisis like the 2011/12 one, but this barrier cannot last forever. In this climate, the desire to react finally emerges. The president of the EBA, Andrea Enria, supported by Klaus Regling of the Salva Stati fund, has launched the proposal for a continental bad bank that could raise funds from private investors. Meanwhile, ECB adviser Ewald Nowotny has branded the discussions on a possible exit from the euro by Italy and France as absurd. But Nowotny himself has announced a probable review of the ECB's monetary policy for June, underlining however that there will be no decisions on a further reduction in Qe.
FUTURES DOWN, JAPAN RAISES ITS ESTIMATE ON THE ECONOMY
In this context, Meteo Borsa recommends going out only with a helmet. Widespread losses this morning on US index futures after Donald Trump's decision to fire Sally Yates, the attorney general who ordered prosecutors under his orders not to enforce the ban on immigration signed by the president.
Tokyo (-1,2%) and Sidney (-0,6%) also lose hits. The equity markets of Korea (-0,5%) and India (-0,4%) are down. The Chinese stock exchanges and a large part of the Asia Padific area are closed for holidays. The Japanese central bank kept its negative interest rate policy unchanged, but raised its forecasts for the economy. Macroeconomic data is better than expected: industrial production rose last month by 0,5%, against the estimated +0,3%.
ALPHABET: IT'S A COUP. AIRLINES DOWN
Sharp turnaround for Wall Street: the Dow Jones lost 0,61%, retreating below the 20.000 level to 19,971,13. The loss of the S&P index was similar (-0,60%). Worse was the Nasdaq (-0,83%) under the pressure of the technology sector, from which came the harshest criticism of the president's anti-immigration choices. A senior Alphabet executive wrote in a post on Medium (a news platform) that this is evidence of a coup d'état. The stock of the holding company that controls Google lost 2,5%. Facebook (-1%) and Microsoft (-1%) also fell.
Airlines stocks also suffered: American Airlines lost 4,4%, United Airlines -3,6%. Delta Airlines computers (-4,1%) went haywire due to the chaos associated with the provision.
Oil prices are also weak. Brent trades at 55,10 dollars: since the beginning of January, prices have lost 5,6% despite the cut in production by the producing countries. Wti is worth 52.41 dollars a barrel. Chevrons -1,7%. The energy sector was down sharply in Piazza Affari: Eni -2,5%, Saipem -6,7%, Tenaris -4,9%.
GERMAN INFLATION PUTS BTPs UNDER PRESSURE
Black day for the Ftse Mib, which opened the week with a drop of 2,95% which led it to close below 19.000 points at 18.759 points. More contained red for the other major European price lists: Paris (-1,14%), Frankfurt (-1,12%), London (-0,92%) and Madrid (-1,56%). German inflation rose in January to a three-and-a-half-year high, reaching 1,9% yoy, one step away from the 2% threshold.
A hot day for the BTPs which paid for the expectations of a rise in inflation in the euro area and a series of strictly internal factors, dominated by political uncertainty. The rate on ten-year BTPs rose today to 2,35%, the highest since July 2015. The spread reached new highs both on Germany and on Spain, respectively at 190 (the highest level since November 28) and 72 bps ( up to five years).
The Treasury has placed the maximum amount of 9 billion Btp over five years, of the new ten-year June 2027 and of Ccteu. Yields rose to their highest since October 2014 on the 2015-year and June 2,42 on the five-year. At the end of the gray market, the new stock is trading at 2,37%, against XNUMX% at the auction.
The last two BTPs placed by the Treasury via syndicate are trading at maximum yields: the new 15-year bond launched last week reached 2,89% in the session; the 50-year-old, launched in October, has reached 3,66% to date.
UNICREDIT: LOSSES EMERGE BEFORE THE INCREASE
The pressure around bank stocks is still growing. The words of Danièle Nouy contributed to increasing the tension. The head of ECB surveillance in an interview with la Repubblica explained that much remains to be done for Italian banks and that "little progress" has been made on the non-performing front in the last three years.
Unicredit (-5,45% to 26,20 euros) does not deserve this accusation. The bank faces the next 13 billion capital increase after a dramatic clean-up action that emerged yesterday with the publication of the Registration Document filed with Consob in which the institute provides advances on the accounts for the fourth quarter of 2016. “Non-recurring negative impacts on the net economic result of approximately 12,2 billion euro” are expected, mainly attributable to actions aimed at improving the quality of the balance sheet assets.
The group has considered a series of further one-off write-downs amounting to approximately one billion, mostly related to the write-down of the stake in the Atlante fund. Furthermore, the document states that "there is a risk that the actions in the Strategic Plan are unable to adequately address the weaknesses identified by the ECB".
These shocking figures are no surprise to insiders. Comments Websim: "All analysts know that the result will be an enormous loss due to a huge clean-up of the balance sheet" already anticipated by the strategic plan presented last December 13th. As regards the increase, the largest ever launched by an Italian company, the market expects the new shares to be placed at a 30% discount on the Terp (theoretical value of the shares after the detachment of the option right). Unicredit will have to issue about 10 billion new shares, compared to the 618 million shares currently outstanding (after the 1 to 10 split).
Among the other banks, the former Popolari are heavy: Ubi suffers (-6,8%), while Bper loses 4,8%. Kepler-Cheuvreux strengthened the Buy recommendation, raising the target price by approximately 35% to 6 euros from 4,40 euros. Banco Bpm drops almost 4%.
No news over the weekend on the front of Intesa's possible offer on Generali. Intesa fell by 3%, Generali lost 3,1%, Mediobanca -2,6%. Unipol (-5,6%) and UnipolSai (-4,6%) also fell.
ALL IN RED THE FTSE MIB. CREDIT SUISSE RELAUNCHES TOD'S
Tod's could record significant price changes at the start of the session. This morning Credit Suisse turns around on the Italian luxury company: the recommendation goes from Underperform to Outperform.
Limits Luxottica damages (-1,1%). On the eve of today's board meeting, the company announced the 100% acquisition of Opticas Carol, one of the most important franchised optical chains in Brazil with around 950 stores. The price paid, reads the press release, is 110 million euros. Sales of other luxury stocks: Ferragamo -3,2%, Yoox -3%.
The utilities are heavy in the face of the increase in the cost of money: Enel -2,1%, Snam -2,8%. Telecom Italy -2,4%. Among the industrials, the rise of StM stopped (-0,4%), which gained more than 15% last week. Fiat Chrysler -3,3%, Leonardo -2,7%.
