Taurus takes possession of the Stock Exchanges with a surprise snap that cancels a series of negative sessions at all latitudes. In Asia, Tokyo accelerates (+1,4%), which seems to have digested Governor Kuroda's comments without problems against the risks of a further decline in the yen. The increases in the rest of the area were driven by the discount rate cuts in New Zealand (the kiwi currency -2,6%) and in Korea, where the cost of money fell to 1,50%, an all-time low .
Time for increases also on Wall Street, driven by the expectation of an agreement on Greece: the Dow Jones index advanced by around 1,4%, as did the Nasdaq, while the S&P 500 rose by around 1,2% . The rises were driven by financials (Goldman Sachs +%) and the tech sector. In evidence Netflix +3,75% after the green light to split the shares. The wind of revenge began to blow in the afternoon from Europe, depressed by four consecutive sessions of decline.
MILAN LEADER STOCK EXCHANGE, LONDON PUTS RBS ON SALE
In Milan, the Ftse Mib index rose by 2,5%, a whisker above Frankfurt (+2,4%). Paris gained 1,7%. London +1%. In the evening the Chancellor at the Exchequer David Osborne announced his intention to start the sale of the Royal Bank of Scotland, today in charge of the British Treasury for 32 billion pounds. The transfer will also be made at a loss in order to avoid, continued Osborne, further damage to taxpayers.
GREECE, AGREEMENT CLOSER THANKS TO MERKEL
The spark for the rise came from a note from the Bloomberg agency: two German officials said that Angela Merkel would be willing to unblock loans to Greece provided Athens commits to just one of the reforms so far requested by international creditors to reach an agreement . It's not much, but it's already something, also because it didn't rain any denials in the evening. S&P, meanwhile, has downgraded Greek stocks to junk status.
The duelists are busy demonstrating that they are doing their best to reach an agreement in time to sign peace at the EU summit on June 18 to be held on the plain of Waterloo, two centuries after the battle that changed the face of Europe.
EMERGING ALARM FROM THE WORLD BANK
Meanwhile, the spotlights of the markets are focused on the USA awaiting the latest burst of macro data (above all the trend of private consumption, but also registered unemployment and the trend of inventories) before the Fed meeting of 16-17 June which will provide more precise indications on the timing of the rate hike. In the meantime, the change of course is already affecting the emerging markets, clearly slowing down. A report by the World Bank underlined yesterday that developing countries are grappling with "a structural slowdown" destined to last for the next few years and will thus have to cede the role of engine of growth to more mature economies, starting from the United.
BUND OVER 1%, BTP AT 2,24%. TODAY'S AUCTION
Day of great fibrillation on the money markets. And yields are growing almost everywhere, including US ten-year T-bonds which have risen beyond the 2,5% barrier. But it is in Europe that the government bond fever has caused these effects. The German Bund (10 years) hit new lows for the period at 148,23 during the session and then rebounded to 149,5 points. As a result, the yield crossed the psychological 1% mark for the first time since September 2014. In mid-April, it had hit an all-time low of 160,7 for a yield of 0,075. Bill Gross, who had called the Bund bubble "a secular opportunity to sell at a profit" was absolutely right.
The path of the BTP is similar: the 2,24-year yield closed at 2,28%, from the previous 2,36%. During the day, the yield had risen to 133%. The spread does not reveal particular tensions between "core" and "peripheral" countries. The spread does not reveal particular tensions between "core" and "peripheral" countries: the Italy-Germany gap remains stable at around XNUMX basis points.
In this context, the mid-month auctions have started. Yesterday, the Italian Treasury placed 6,5 billion euro of Treasuries at a yield of 0,061%, up on the 0,027% yield of mid-May. Today between 4,5 and 6 billion Btp over three, seven, 15 and 30 years will be put up for sale: the amount is not particularly heavy but the offer coincides with a delicate market phase, also complicated by the concomitance with the similar Spanish auction (between 5 and 6 billion).
OIL RECOVERY. SAIPEM AS WELL
The rise in oil continues: after gaining 3,4% on Tuesday, Brent rose by another 0,5% to 65,2 dollars a barrel, Wti to 60,7 dollars (+0,9%). In Piazza Affari, oil stocks stood out. Eni rose by 3,4%, Tenaris +3,2%. Saipem (+2,7%) reduces the losses suffered on Tuesday (-7%).
Raymond James confirmed the outperform recommendation on the stock and the target price of 16 euros, explaining that the six-legged dog has no reason to sell 20% of the subsidiary to the FSI at such low prices or to favor a capital increase (for the sole purpose to deconsolidate the debt: the risk is to increase conflicts of interest and corporate governance problems with the remaining 57% of the shareholders).
The leap of Enel (+2,1%) and Telecom Italia (+3%) should be noted in electricity purchases, ever closer to collaborating to jointly build the fiber optic network for broadband. Terna moves up by 1,5% to 4,20 euros. Communications to Consob show that the Central Bank of China (People's Bank of China) entered with 2% of the capital, the operation dates back to 3 June.
BERNSTEIN BETS ON THE ITALIAN BANKS RALLY
Judging by the performance of the credit sector, it seems that the market is rewarding the rebound in rates. The rally was led by Intesa (+3,6%) ahead of Unicredit (+2,5%). According to Bernstein, the current increase in yields on Italian government bonds will not have a significant impact for both banks, which are destined to take advantage of the imminent reforms on non-performing loans. Not even the dividend plans announced by Carlo Messina will be affected.
Among cooperative banks, Banca Pop.Milano does even better (+3,8%): the market rewards the choice of advisors for the transformation into a joint stock company and any "mergers". Ubi +4,2%, Mediobanca +2,5%. In money managed by Anima holding (+5,8%). Equita Sim and Mediobanca Securities confirmed their buy and outperform recommendations respectively.
GOLDMAN. THANKS TO ALFA THE FCA SHARE COULD RISE TO 20 EUROS
Fiat Chrysler (+1,7% to 13,80 euros) consolidates gains in the afternoon. Goldman Sachs yesterday decided to confirm FCA in the Conviction Buy List, adjusting the target price to 20,10 euros from the previous 19,88 euros. This is the highest target price among the 30 set by experts surveyed by Bloomberg. The average target price is 14,80 euros.
Among the reasons for the judgement, the potential to enhance the brands is underlined, starting with that of Alfa Romeo which alone could be worth 4,8 billion euros, in addition to the unexpressed value of Ferrari. According to American analysts, FCA remains one of the best stocks to play the merger card in the Automotive sector.
Cnh Industrial (+2,4%) and Prysmian (+1,7%) also rose. More limited increase for Finmeccanica (+1%). StM -0,2%.
SUPERSTAR LUXURY. SALES OF FERRAGAMO FLY
In the luxury sector, after the declines of the last few days, Yoox (+5,7%) and Moncler (+4,1%) shine. Ferragamo rises by 3,2% to 27,30 euros. “We are seeing extraordinarily positive numbers with double-digit growth in all the major Italian tourist cities,” CEO Michele Norsa said yesterday, citing, in addition to Milan (which benefits from the Expo effect), also Rome, Florence and Venice. “It has increased further in the last 60 days.” The stock has lost about 20% from the all-time highs reached in April. Luxottica (+2,8%), Tod's (+1,65%) and Brunello Cucinelli (+1,13%) also performed well.
GOOD MEDIASET. RECORD QUARTER FOR OVS
It also improves advertising revenue. Mediaset benefits (+2,2%) driven by the presentation of the TV schedule. CEO Pier Silvio Berlusconi confirmed that the group is interested in possible collaborations with telecommunications companies.
The better dynamics of consumption is confirmed by the brilliant quarterly report of Ovs (+6,5%), which rose to 5,20 euros, a new high since listing. HSBC reiterated the Buy, adjusting the target price to 5,50 euros from 5,20 euros.
