The slowdown of the US economy falls like lightning on the already unclear skies of the markets. In the wake of the news, the dollar accelerated its descent to 1,119 against the euro, which returned to its two-month high, and against the yen, 118,87. Hence a drop in the Stock Exchanges, more massive in Europe and Japan than in the United States.
ASIA DOWN, LANDSLIDE IN FRANKFURT, MILAN -2,2%
In Tokyo, the Stock Exchange is starting to close with a fall of around two percentage points. Hong Kong is also holding back (-0,83%). On Wall Street, the Dow Jones index fell by 0,41%, the S&P 500 by around 0,4% and the Nasdaq by 0,63%. Meanwhile, the weakness of the dollar pushed up oil prices, with the American WTI increasing by 2,2% to 58,3 dollars a barrel and Brent to 65,6 dollars (+1,5%).
The most massive losses were recorded in Europe, frightened by the recovery of the euro which risks jeopardizing the foundations of a fragile recovery, which for now rests almost exclusively on exports. The floodgates have thus opened on the Stock Exchanges of Milan, Paris and Frankfurt. In Piazza Affari the FtseMib index fell yesterday by 2,2%, the French Stock Exchange closed down by 2,5%, the German one even lost 3,2%.
FED DOESN'T RULE RATES RISE, MARKETS DO
The Fed statement, published yesterday evening at the end of the work of the monetary committee, attributes the slowdown in the US economy (+0,2% in the first quarter, against the forecast of 1%) mostly due to "temporary factors ”. The central bank therefore keeps a window open on a possible rate hike in June "in the event of improvements in the labor market and inflation rising towards the 2% target".
But the markets take it for granted that the increase, if any, will not arrive before the autumn, or more easily at the end of the year. Thus, in summary, the statement of the Fed at the end of the meeting of the monetary committee. Beyond the seasonal situation (cold winter, port strikes) the most significant cause of the halt in growth was the strength of the dollar which was reflected in a drop in exports (-7,2%).
THE BTP 10 RISES TO 1,50%. TODAY THE NEW ATHENS PLAN
Also conditioning the mood of the European markets was the surge in German Bunds followed by the parallel rise in the sovereign debt of the "periphery". The German ten-year bond rose by 9 cents, the most significant daily rise since December 2013. The spark that ignited the movement, according to operators on the secondary market, was the outcome of the 5-year bond auction: they were placed Bobl for 3,27 billion against the 4 billion offered. The phenomenon was also transmitted to Italian issues: at the end of the day, the yield on the ten-year BTP was 1,50%, with a spread of 122.
As usual, the markets were influenced by Greece, which is preparing to present the new draft of the list of reforms to international creditors. But the market's setback was explained by the abundance of supply (yesterday the Italian Treasury auctions closed with the placement of 5- and 10-year BTPs at slightly rising conditions) and the fall in yields of German bonds, now negative up to seven years. In recent days, Bill Gross, one of the most influential managers on the bond market, had predicted the bursting of the "Bund bubble", an opportunity for rich speculative profits.
CAR SKIDS: FCA -4,7% VOLKSWAGEN -3,4%
Sales rain hit the sectors most exposed to exports, starting with the Automotive sector: the Stoxx index of the sector marks a drop of 3%. Fiat Chrysler, the worst blue chip of the day, paid the price with a loss of 4,7% on the day of the quarterly meeting approved by the Board of Directors held in Brazil. The period closed with an Ebit of 792 million euros, lower than the consensus of analysts (810 million), on revenues of 26,4 billion, higher than estimates.
Net industrial debt at the end of March stood at 8,6 billion, slightly above expectations, liquidity amounted to 25,2 billion. Net income (92 million euros) is instead lower than forecasts (200 million). The 2015 targets already communicated were confirmed. Together Ferrari and Maserati have achieved an Ebit of 137 million euros. Volkswagen (-3,4%) also closed lower despite significantly better-than-expected earnings.
Instead, Cnh Industrial (-1,26%) defends itself: Iveco Bus was chosen by the French Ministry of Defense for the supply of 150 buses. However, the day was tough for the entire industrial sector of Piazza Affari: Finmeccanica -3,9%, StM -3,1%, Prysmian -3,8%.
MEDIASET BRAKES. PIER SILVIO OPENS TO AGREEMENTS WITH MURDOCH AND VIVENDI
U-turn for Mediaset (-3,1%) closing after a morning rise (up to a maximum of 4,83 euros). During yesterday's meeting, the group's vice president Pier Silvio Berlusconi denied that there are ongoing talks to transfer control of Mediaset to Sky but did not rule out the transfer of minority shares. The vice president also added that with Vivendi the main shareholder of Telecom Italia, there is the possibility of working together.
According to Mediobanca analysts, a consolidation process is about to begin in the European media sector. In a report from the Milanese bank, we read: "We believe that Mediaset could represent an interesting strategic option for Vivendi, being a media & content group, which would allow the French to enter the Italian market directly - we also recall that Vivendi will become the main shareholder of Telecom Italia with 8% of the share capital”.
Telecom Italia unchanged. The market likes the rumor that Vincent Bolloré is contemplating strengthening Vivendi's stake in the company up to 30%.
BAD BANKS AND MANAGED. THE GENERALS DEFEND
In the financial sector Generali defends itself better than all (-1,3%), on the eve of the shareholders' meeting. The company received a rating increase from Société Générale to hold from sell, with the target price going from 16 euros to 18 euros. On the other hand, it was a difficult day for managed savings, after Tuesday's advance.
Mediolanum loses 4,5%, despite the excellent data for the quarter. Profit climbed 70% year over year to $137 million. Behind the increase is an acceleration in management fees, which rose to 195,7 million from 156 million a year earlier. The improvement in performance fees was even more striking, to 132 from 31,3 million. Azimuth -3,9%.
It didn't go better for the banks: Intesa -2,9%, Unicredit -2,1%, MontePaschi -3,9%. Banco Popolare and Pop.Milano lose 3,6%.
BETTER THAN EXPECTED ENI ACCOUNTS -1,5%
The decline also affected Eni -1,5%, which announced better than expected results. Saipem (-2,2%) and Tenaris (-3,4%) are doing worse. Finally, a sharp decline for all utilities, starting with Enel (-2,2%), with A2A down by 2,8%, Snam -2,3%.
AMPLIFON BACKS THE TREND
Amplifon rose by 1,03% yesterday. Bernstein explained that the accounts for the first quarter of 2015 showed "an exceptionally strong growth in turnover" and in fact the revenues beat both consensus expectations.
Cerved down (-3,7%): Mediobanca Securities raised its target share price from 6 to 7,8 euro, confirming the outperform recommendation.
