“After two years of expansion, the global economy is slowing down. Does this mean that a recession is around the corner? No, but the risk of sudden braking is sharply increasing”. Thus Christine Lagarde, general manager of the Monetary Fund commented on the latest forecasts presented yesterday in Davos: in 2019 growth will be 3,5% (-0,2% compared to the October estimates), in 2020 3,6% ( -0,1%).
The figure, despite the furious reaction of the yellow-green Italian government, indicated among the looming threats on the road to growth, reflects the widespread pessimism among business leaders: a survey conducted among 1.400 top managers gathered in Davos shows that 29% of top executives believe a steep fall in the business is likely, the highest figure since 2012.
The performance of the Asian markets reflects concerns about Europe (Italy, but also Germany mired in diesel problems and the unknown Brexit) and, above all, China.
USA-CHINA, THE PATENTS KNOB REMAINS
The CSI300 stock index of Shanghai and Shenzhen is down by 1%, Hong Kong's Hang Seng by 1,2%. The Yuan dollar cross rises to 6,80. The other Stock Exchanges also fell, both due to the effect of the IMF's cut in growth forecasts, and because the United States and China no longer seem so close to a trade agreement: there has been no progress on the patent issue. The Japanese Stock Exchange is starting to close down by 0,7%. South Korea's Kospi lost 0,5%, BSE Sensex 0,4%.
Optimism was also cooled by Xi Jingping's speech at a party seminar in Beijing: the president spoke of "serious dangers" and "strong risks", lamenting the estrangement of party cadres from the "needs of the people".
Brent oil is down 0,8%. In Milan, Saipem -1,3%. Futures anticipate a declining start for both European and US stock exchanges which reopen after the Martin Luther King day break.
BREXIT TURNING POINT: LABOR FOR NEW VOTE
Slow day for the European Stock Exchanges, orphaned by Wall Street. The downward correction of the estimates for Italy made by the Monetary Fund or the development of the discussion on Brexit was not enough to shake up the price lists.
Today the calendar comes to life with the German Zew index and the opening of the Davos Forum. But the spotlights are already on the PMI indices to be released on Thursday, at the same time as the ECB summit, from which it could emerge that the time is ripe to unofficially signal the imminent arrival of the new TLTRO. Late in the evening in London, the British Labor Party presented a new series of proposals on Brexit, one of which explicitly foresees a new referendum on the permanence of Great Britain in the European Union. Until a few hours ago, the main opposition party had a very nuanced position on Brexit. This morning the pound traded at 0,882 against the euro, from 0,881 at the close
BUSINESS CENTER -0,35% STOPPED BY ENEL AND SNAM
Piazza Affari closed the session down by 0,35%, at 19.638, despite the downward revision of the IMF estimates and the coupon detachment by Enel (-2,3%) and Snam (-1,38 %) with a 0,3% impact on the index.
Worth noting is the new flight of the Ftse Star index (today +0,3% to 33.595 points). The index of small and medium-sized enterprises extends its gain from the beginning of 2019 to +10% and clearly outperforms the performance of blue chips (FtseMib +7%).
The phenomenon is worldwide. On Wall Street, the Russell 2000 index, which groups together mid-cap companies, has gained 11% since the beginning of 2019 against the +7% recorded by Dow Jones. In Paris, the index of mid-cap companies gains 8% against the +2,8% recorded by the Cac40.
Returning to the main price lists, yesterday the worst was that of Frankfurt (-0,67%), the most sensitive to the performance of the Chinese economy. In pale red Paris and Madrid, both -0,17%. London is the only positive one: +0,03%. This morning the pound traded at 0,882 against the euro, from 0,881 at the close.
THE IMF HOLDS DOWN THE ITALIAN GDP ESTIMATIONS: ONLY +0,6%
The International Monetary Fund updated its growth estimates for the Italian economy, reviewing the GDP expansion for 2019 to (+0,6%), the lowest value among the developed economies, compared to the +1% expected last October and in perfect harmony with the Bank of Italy which according to Luigi Di Maio "is always wrong".
"Fears about financial risks and those linked to sovereign debt weighed on domestic consumption", said the institute's new chief economist, Gita Gopinath, inserting Italy among the threats to the balance of the global economy due to "concerns about risks sovereign and financial”. Di Maio is not impressed: "Rather it is the IMF - he spelled between one lecture to France and another - which is a threat to the world economy, a story of economic recipes crowned with erroneous forecasts, few successes and many disasters ”.
THE SPREAD AT 255 POINTS HAS NOT MOVED A LITTLE
The bond market is also weak in the absence of US operators. Compared to 252 basis points on Friday evening (269 basis points at the end of the previous Friday), the gap between the Italian and German yields on the 255-year segment stops at XNUMX basis points.
TIM AND FERRAGAMO LEAD THE DISCOUNTS
Tim's landslide continued in Piazza Affari (-2,62% to 0,47 euros) amid new exchanges of accusations between shareholders Vivendi and Elliott. Kepler Cheuvreux confirmed the buy judgment but reduced the target price from 0,9 to 0,65 euro, a level which in any case remains well above current stock market prices.
Salvatore Ferragamo also fell (-2,3%), under fire from analysts. Citi downgraded its rating to 'sell' citing "persistent fears about the global economy and China, US-China trade tensions and growing political risks in Europe." JP Morgan also reduced its target price to 17 euros from 17,5.
Tod's (-0,6%) was also affected by the Citi downgrade.
UBI: CARIGE AND MPS ARE NOT FOR US
The bank index fell slightly, in line with the European Stoxx. The best was Bper (+0,52%), the worst was Ubi (-0,54%), indicated among the possible partners of Carige and Mps (-0,65%), a hypothesis rejected by the top management: the CEO Vivtor Massiah he said yesterday that "there are no conditions for consolidation operations".
ONLY JUVENTUS FLY +5,3%
The Juventus stock still stands out in the main list (+5,32%) in view of the sale of Gonzalo Higuain to Chelsea.
Plus signs also for Leonardo (+2,41%) and Stm (+0,43%). In the automotive sector, Ferrari (+1,01%), Pirelli (+0,79%) and Brembo (+0,3%) performed well.
ECOMMERCE PUSHES GIGLIO GROUP
Giglio group +17,02% in view of the presentation of the new strategic lines of business and opportunities in the e-commerce sector.
Fincantieri +4%, after an order for the US Navy.
Molmed's leap (+15%) after being suspended due to an excessive rise.
