THE FT: A 900 BILLION EU BAZOOKA. WALL STREET BELIEVES IT
TODAY GEITHNER BLESSES MONTI WAITING FOR THE SUMMIT TRUTH
“S&P's judgment encourages us to accelerate our work. For the first time a judgment has been issued on the euro area as a whole: a positive fact”. Wolfgang Schaueble, German finance minister, wastes no time in criticizing the rating company as does the spokesman for the finance ministers of the euro area, Jean Claude Juncker. On the contrary, he takes the opportunity to accelerate the launch of a German-style Europe, blessed yesterday by the praise of Tim Geithner, the US Treasury secretary visiting Berlin. Meanwhile, the Financial Times online reveals that the sherpas of the European ministers have reached agreement on the "bazooka plan": the Fund to save states will have 500 billion available in addition to the 440 already agreed. In July this figure will be boosted by another 500 billion allocated to the ESM. Finally, the New York Times goes so far as to predict a cut "perhaps more than a quarter of a point" by the ECB at tomorrow's meeting.
THE SEAL OF BAGS. All this explains why the warning by Standard & Poor's on 15 euro countries and on the nascent bailout fund (already deprived of the triple A before it was even born…) did not cause havoc on the stock markets. Milan, after a mixed session, closed with a drop of 0,48%, in line with Paris -0,33%, ahead of Frankfurt -0,90%, affected by the shock of the possible downgrade of the triple A. Things went better on Wall Street after the Financial Times revelations on the birth of the European Union's financial bazooka: Dow Jones +0,43%, S&P +0,11, Nasdaq +0,23%.
AND THE REDEMPTION OF BTPs. Even more significant is the improvement in Italian government bonds. Both the BTP yield, which fell to 5,91%, and the spread against the Bund, flat at 369 (after having reached a minimum of 357) confirm that the maneuver had the effect of cooling down the most dangerous crisis, the one of sovereign debt. Several operators have reversed their strategies: short on the German bund, the first purchases of Italian debt: if the next summit sets the rules for a rigid fiscal union among the countries of the Eurozone, such a wide spread between Italy and Germany which still accuses a debt to GDP ratio of 82%) is not justified.
METEOBORSA: DEPARTURE IN PINK. The indications coming from Asia are very positive: the Nikkei index in Tokyo rises by 1,64%, the rise in Hong Kong is close to 1,5%. The possible increase in the financial endowment in the hands of EU institutions, relaunched by the Financial Times, has also heartened operators in Australia, where growth is higher than expected. The drop in gold and the lower interest in the Bund show that the markets are regaining their lost composure. And this can offer oxygen to the upward trend of share prices between now and the end of the year. The propellant could come from the ECB: a new rate cut, beyond the practical effect, would have a significant psychological impact because it would be the confirmation that the ECB led by Mario Draghi has greater intentions and scope for intervention than in the past. Futures on Standard & Poor's suggest a recovery start to the markets in the first part of the day. Then, as usual, the news on the eve of the summit (including Geithner's support for Mario Monti in the Milan meeting) will dictate the plot of the meeting.
FONSAI, TODAY THE ERBETTA PLAN BEING REVIEWED BY ISVAP
THE MANEUVER AGAINST THE ACCUMULATION OF LOADS IN THE BANKS
The Ligresti case continues to hold court in Piazza Affari. The meeting today between the directors of Fonsai -4,3% and Isvap will be of crucial importance. The CEO Emanuele Erbetta will ask for the go-ahead for the plan to strengthen the company's assets and solvency index: alongside the sales and the release of goodwill there is the vehicle node, jointly owned by Crédit Suisse, in which to place the "family jewels" (ie the significant equity investments in RCS, Mediobanca, Pirelli, Unicredit and MPS). The green light for this operation is far from obvious. The emergence of a new shareholder with a 12,5% stake in Premafin does not help to clarify: a financier, Giancarlo De Filippo, who has always been linked to Ligresti who has declared possession of 12,5% of the listed leader of the group through the 'Heritage Trust of the Bahamas.
The unexpected spring of Mps continues +4,4%. The prospect of a strong shareholder, probably CDP itself, alongside the Sienese Foundation (for the first time ready to drop below 51%) has given wings to the stock. On the contrary, with the exception of Ubi +1%, the rest of the banking sector is slowing down after the strong increases on the eve: Unicredit -1,3%, Banco Popolare -1,4%, Intesasanpaolo -0,8%. The most massive drop concerns Bpm -3,2%. Meanwhile, the ban on the accumulation of offices established by article 36 of the maneuver puts the top management of the system in turmoil: at risk, to begin with, the positions of Dieter Rampl and Fabrizio Palenzona in Mediobanca.
The recovery in value of BTPs, on the contrary, favors the recovery of the insurance sector: Generali +0,7%, Unipol +2,8%. In great evidence Banca Generali +3,27% after the flattering results of the November collection.
MARCHIONNE, STOP INVESTMENTS IN EUROPE
FINMECCANICA DOWN DESPITE THE ORDERS
Difficult day for industrial stocks. Despite a new contract for 600 million dollars from the subsidiary Drs, Finmeccanica suffers a loss of 4,8%. Also down were Pirelli -1,8%, Prysmian -1,4% and Pirelli -2,5%.
Fiat -2,8% and Fiat Industrial -1,8% also fell. In a meeting with analysts Sergio Marchionne did not rule out the merger between CNH and Fiat Industrial, perhaps preceded by the sale of Iveco. It is a hypothesis, probably nothing more. Like the possible sale of Ferrari or other "ideas" that the CEO of Fiat usually does not rule out when speaking to analysts. Marchionne's message in an interview with Reuters is much more concrete: Fiat has suspended investments, both in plants and products, in Europe in the expectation of having greater financial visibility on the prospects of the Old Continent. The landing of Alfa in the USA will only take place in 2013, the "decisive" year for the merger between Fiat and Chrysler. The flop of the 500 overseas is due to the fact that "the landing was premature".
