The international situation does not justify the nervousness of the financial markets. This is the message arriving from the G20 in Shanghai last weekend. "Stock market volatility does not reflect the fundamentals of the global economy," commented Chinese Finance Minister Lou Jiwei in his closing conference. New reassurances have arrived from Beijing regarding its intentions to defend the rate of the yuan. But no common measures emerged from the meeting to counter the decline in growth.
However, what contributes most to reassuring the markets is the expectation of the moves of the central banks, starting from the next meeting of the ECB on 10 March. It is the general opinion that the Central Bank, grappling with the fall in the inflation rate, will not disappoint the markets as happened last December. In particular, a report by Goldman Sachs predicts that Mario Draghi will announce a 10 basis point cut in the overnight deposit rate, a 10 billion increase in monthly bond purchases, and a six-month extension of QE until September 2017.
The Fed summit will instead meet on March 16-17, preceded next Friday by employment data: 190 new jobs are expected (against 158 in January) confirming that the economy is moving towards full employment ( unemployment at 4,9%) as emerged from the upward revision of the US GDP in the fourth quarter of 2015 (+1% against the initial estimate of +0,7%): however, a forthcoming increase in US rates is not foreseen. The Beige Book on the state of the US economy will be published on Wednesday 5 March.
Much will depend on the big maneuvers on the price of crude oil, which rebounded during the week (Brent + 9%, Wti + 12%) pending a possible agreement between producers.
A note of optimism comes from Warren Buffett's letter to shareholders in view of the next meeting. The essay from Omaha, back from a golden year (+32% profits) thanks to the excellent performance of insurance companies and financial investments, writes that he does not listen to the catastrophic messages of the candidates for the White House: "I children born today in the US are the luckiest ever”.
THE AGENDA: BRAZIL EMERGENCY, CHINA ANNOUNCES OBJECTIVES
Wall Street is also paying close attention to the super-Tuesday, probably decisive for the choice of candidates who will compete for the White House: Donald Trump has a clear advantage among the Republicans, Hillary Clinton's chances have increased in the Democratic field.
The meeting of the Central Bank of Brazil, called to deal with the emergency, was also in the spotlight: it is unlikely that a new rate increase will be decided, today at 14,25%. They expect measures to curb the recession: GDP fell by 1,6% in the last quarter. Compared to a year ago, the fall is 6%.
Big finale on Saturday with the inauguration of the Communist Party Congress in Beijing. For the occasion, Premier Li Kequiang will announce the GDP growth target for the current year in addition to the five-year plan targets.
The most awaited Italian data concern inflation (Monday) and unemployment (Tuesday). On the corporate front, the board meetings on the financial statements of Bper, Luxottica and the L'Espresso group will be held on Tuesday 4 March. Thursday 5 will be the turn of Moncler, Brembo and De Longhi. Atlantia's accounts are scheduled for Friday.
During the week, the Dow Jones index gained 1,5%, the S&P 500 1,6%. The Nasdaq is up 1,9%. The year-to-date loss of the S&P index narrowed to 5%. However, the Italian Stock Exchange is still seriously lagging despite the 3,4% gain in the last five sessions. The drop in Piazza Affari (+11% from the lows of mid-month) since the beginning of the year is reduced to -18,3%.
The overall Stoxx 600 European stock exchange index closed the week with a 1,5% increase, which reduces the year-to-date loss to -9,3%. Leading the rebound were banks in Europe (Stoxx index +4,1%) and oil stocks (+3,6%).
At Piazza Affari, insurance companies stood out: Generali + 8,99%, UnipolSai + 7,78%. For the Lion of Trieste it was the best week since the summer of 2012. The quotation returned to the levels of the beginning of February, while the balance sheet since the beginning of 2016 is still heavy (-25%) and clearly worse both than the average of the European insurance sector (-15%) and the FtseMib index (-18%).
After Friday's strong performance, the oil companies are hoping for another roaring day. Both Saipem (+8,21%) and Tenaris (+3,64%) closed the week on positive ground. But the most comforting note came from Eni (+6,77%). Despite a net loss of 8,82 billion euros due to the "oil scenario-induced write-downs", the company, which confirmed the dividend of 0,80 euros, was praised by analysts for the effectiveness of the action to contain accounts and new discoveries. The six-legged dog will be able to guarantee the self-financing of the capex in a scenario of around 50 dollars per barrel of crude oil.
The Agnelli team is also making a strong recovery: Exor +9,855%, Cnh +5,11%. Ferrari climbs again (+2,9%). Attention will be focused on Fiat Chrysler (+6,09%) on the occasion of the announcement of February sales, a horrible month on the stock front for the group led by Sergio Marchionne. The company will exhibit at the Geneva Motor Show a series of innovations capable of strengthening the already growing market shares in Europe. There is much anticipation in particular for the start of production of the Alfa Romeo Giulia, which will be marketed in Europe in the second quarter (in the USA at the end of the year). Also on display are the 124 Spider and the Levante Maserati.
It should be a good week for the Bpm-Banco Popolare wedding, even if not all the knots have been resolved. According to rumors, the ECB has asked for a further reduction in the number of directors (from 19 to 15), tighter deadlines for transferring non-performing loans (two years compared to the 5 envisaged in the business plan) and raised doubts about the need to preserve 3 years a Bpm Spa within the Group. Barclays cut Banco Poppola's target to 8,20 euro from 14,80 euro and that of B. Pop. Milan at 0,90 euros from 1,20 euros.
