The technology that makes facial recognition possible can also signal the arrival of the bear on the stock market. The stock markets discovered it yesterday, starting with the Nasdaq. Yesterday's sharp decline was triggered yesterday after Lumentum Holdings, a California company that supplies facial recognition technology, announced that "one of its major customers has cut a large order." Within a few minutes, the stock sank until it lost 33%, infecting the rest of the market when it was confirmed that the customer was none other than Apple.
HOLD THE IPHONE, THUMP OF APPLE
The Apple stock lost up to 5%, dragging down the other more sophisticated suppliers of the iPhone: Corrus Logic closed down by 14%, as well as Qorio and Skywors Solutions. The Soxx semiconductor index dropped 4,4%. Japan Display, a maker of touch screens, fell 7% in Tokyo this morning after providing very disappointing guidance for the year.
The wave of decline that hit the US markets continued this morning in Asia. Japan (-2,5%) as well as South Korea's (-0,9%) and Taiwan's (-0,8%) Stock Exchanges lose hits. China's stock markets rose slightly after the announcement that a high-level delegation will travel to the US to renew the negotiations on tariffs.
The landslide of the Nasdaq (-2,78%) and of the other US indices was even more profound: Dow Jones -2,32%, S&P 500 -0,97%.
GOLDMAN SACHS INVESTIGATED IN MALAYSIA
In fact, Wall Street's setback was not caused only by Apple's problems. Even heavier was the fall of Goldman Sachs (-7,5%) after the news launched by Bloomberg that the premier of Malaysia Lim Guang Eng has decided to sue the Bank on charges of having actively contributed to distract some billions of dollars from the country's sovereign wealth fund, favoring the criminal action of the former prime minister. Lloyd Blankfein himself is personally involved in the affair, until a few months ago the number one in the investment bank.
The list of declines continues with General Electric (-6,9%), for the first time below 8 dollars since 2009: CEO Larry Culp said that the group will have to sell several assets "rapidly" to avoid a dramatic fall.
TRUMP TO ARABIA: KEEP PUMPING CRUDE
To complete the picture, the new descent of energy. The recovery in oil prices was short-lived. Yesterday, President Donald Trump intervened asking OPEC not to cut production despite the fall in prices, as Saudi Arabia had anticipated. But the slowdown in the economy, which is also holding back purchases by Chinese and Indian buyers, is causing the decline.
Brent dropped below 70 dollars this morning to 69,17 (-1,4%), Wti below 60 dollars (59,06, -1,5%).
Sector stocks are down on Wall Street. At piazza Affari Saipem +0,11%, Eni +0,21% and Tenaris -0,81%.
EURO AT THE MINIMUM FOR 20 MONTHS. MANEUVER AND BREXIT WEIGH
In this context the euro is recovering, after -1% yesterday against the dollar, the cross is this morning at 1,124 (+0,2%). The European stock exchanges experienced a high-tension session under the pressure of selling on the euro, which plunged to its lowest level since June 2017 against the dollar at 1,124. Several factors, both economic and political, contributed to the fall of the single currency, as well as of stock lists. There is an embarrassment of choice, from the confusion over Brexit (the conservatives rise up against the government's plan) to the dire prospects of the confrontation between Rome and Brussels. But also the alarm on chips and, in a domestic key, the uncertainty about Carige.
BETWEEN BOND USA AND BUND A SCISS OF 354 POINTS
A paradoxical situation has thus arisen: the yield differential between the 2-year US Treasury Bond (2,92%) and the 2-year German Bund (-0,62%) reached a peak of 354 basis points. A level not seen since the 80s. This means that, at constant exchange rates, investing in US government bonds generates a premium of 354 basis points each year compared to an equal investment in German government bonds.
MILAN HOLDS DOWN, FRANKFURT WORSE, BTP AUCTION TODAY
In this context, the stock lists turned red. Milan -1,05% approached the barrier of 19 points downwards (19.056).
The decline in Frankfurt was even heavier: the Dax index fell by 1,8%, bent by the simultaneous fall of two of the thirty blue chips that make it up: Infineon -7% and Sap -6%. Since the beginning of the year, the index has lost 12,5%, a performance almost in line with that of Piazza Affari (FtseMib index -12,0%).
Weak Paris (-0,93%), Madrid (-0,64%) and London (-0,73%).
Debt securities are under pressure: the spread widened to 305 basis points, from 298 on Friday.
In the auction of one-year Treasury bonds, the yield dropped yesterday to 0,63%, the Treasury placed the maximum expected amount of 5,5 billion euro and demand improved.
Today it will be the turn of medium-long term securities: 5,5 billion euro of 3, 7 and 20-year BTPs will be auctioned.
FLY TIM ON THE WAVE OF THE UNDERTAKING WITH OPEN FIBER
The undisputed queen of Piazza Affari was yesterday Tim, +2,8% in closing after registering a leap of up to 6% on the wave of news on the government's plan to support the creation of a single network through amendments to the simplification decree. The perspective of an agreement between Tim and Open Fiber it was endorsed by the declarations of Amos Genish, managing director, who said he was in favor of the creation of a single network in Italy but on condition that the network remains under Tim's control. The increase was also fueled by the news of an alliance with Vodafone on 5G, to reduce the costs of the operation. Meanwhile, Genish has left for China to meet with the top management of Huawei.
A tormented day instead for Stm, hit by the crisis of the chips. The stock lost 4,5% from the +2% at the beginning of the session propitiated by the good accounts of Infineon. Even the German group, +3% at the opening, fell to -5% on the wave of news arriving from the Nasdaq.
AGREEMENT TO ASSIST THE CARIGE PLAN
The uncertainty surrounding the Carige case weighed on the banks, suspended for the entire session at the company's request. Yesterday the board approved the accounts for the first nine months, closed with a loss of 188 million after the request for new adjustments requested by the ECB and given the go-ahead for the Bank's strengthening operation. subordinated Tier 2 bonds and in a subsequent capital increase for an amount of 400 million. The main shareholders (Malacalza family, Gabriele Volpi and Raffaele Mincione) took their time but the solution was found thanks to the Voluntary Intervention Scheme of the Interbank Guarantee Fund which has already approved a commitment of up to 320 million. The CEO of Intesa, Carlo Messina, has already anticipated the institution's commitment.
The other securities in the sector were weak: Unicredit -1,7%, Intesa -2%, Ubi -1,93%.
HIGHLIGHTS LEONARDO AND TERNA. ATLANTIA SUFFERS
Moncler +0,8%. The e-commerce channel is doing very well in China, says the managing director Remo Ruffini.
Leonardo (+2,1%) received a 280 million euro order for 22 Aw169 helicopters.
Terna +1,08% and Snam -0,1%, both rewarded by the promotion of Ubs.
Atlantia -2%, after the news of the suspension of the interim dividend.
Automotive sales. Down Ferrari-1,9% and Brembo -2,84%.
