Waiting for today's data on the US labor market, Jerome Powell's warning has already borne fruit: the stock markets are down, now expecting four increases in the cost of US money in 2019. The yield on ten-year Treasuries is up , which rose to 3,20% (highest since 2011), the same trend in Europe. For now, the markets are putting aside worries about the Italian maneuver while waiting to understand the dimensions of the recovery in US wages: more than the number of new jobs, they look at payrolls, after the decisive increase by Amazon.
But what takes center stage again, to the detriment of price lists, is the resumption of the increasingly tough confrontation between China and the United States. Several signs go to demonstrate that Xi Jingping is preparing the country, even on a psychological level, for an emergency climate: the tightening on luxury consumption, the sensational denunciation of Fang Bingbing, the most famous star of cinema and TV, who disappeared for more than a month under charges of tax evasion, the measures taken in favor of state-owned enterprises to the detriment of the private sector described by the New York Times.
The most dramatic conflict, however, concerns technology. A Bloomberg investigation denounces that a company controlled by the Chinese People's Army has managed to infiltrate a "rogue" chip in both Amazon TV and Apple products. The consequences were immediate.
Lenovo, a very strong PC builder in North America, lost 18%. ZTE, a Chinese company active in video conferencing and telecommunications technology, lost 11%.
In the absence of Shanghai, still closed for the Lunar New Year holidays, sales on high-tech companies lower the Taipei Stock Exchange: the Taiex index, with -2% today, is starting to close the week with a decline by almost 5%. Hong Kong loses 0,5%, Tokyo 0,8%, Seoul 0,6%, Mumbai 0,4%.
Wall Street closed in the red: Dow Jones -0,75%, S&P 500 -0,82%. The Nasdaq pays the highest price: -1,81%. The "indicted" stocks suffer: Apple loses 1,76%, Amazon 2,22%.
Tesla, closed down 4%, after the exchange, the stock lost another 4%, due to the effect of Elon Musk's tweet that ridicules the financial market surveillance agency, the SEC, defined as a commission that enriches the speculators. The tweet comes five days after a plea deal, between Musk himself and stock market authorities, over fraud charges over the failed August delisting.
Oil rallied this morning after absorbing the effect of increased inventories at Cushing, the hub of North America's pipeline system. Brent is trading at 84,6 dollars a barrel (+0,4%) while Wti is trading at 74,76, around the highest since 2014. But Goldman Sachs preaches caution: speculative upward positions are accumulating on the market (1,2, XNUMX million barrels) in view of the embargo on Iran which could hold surprises.
At Piazza Affari Saipem -0,8%: citigroup has cut its rating. Eni-0,6%
CREDIT SUISSE: THE GAP BETWEEN THE USA AND EUROPE IS EXCESSIVE
Seat down also for all European markets. But this time it wasn't the fog over the Italian maneuver (far from dissolved, however) that acted as ballast. The effect of Jerome Powell's words, which open the door to the hypothesis of a higher number of monetary tightenings than those foreseen by the market, was also felt in the Old Continent. Hence the decline, partly cushioned in Milan and Madrid by the rebound of bankers, favored by the rise in yields.
Meanwhile, the yield gap between the European markets and Wall Street continues to widen: Credit Suisse invites you to reduce your exposure to Wall Street, despite the strength of the dollar: the gap with the European stock exchanges has reached "alarming levels". Since the beginning of the year, the MSCI World index, excluding the United States, has lost 4,4%, the MSCI United States index has gained 9,5%: a similar gap has not been seen for thirty years. Wall Street's P/E (Price to Earnings Ratio) is double the average of the world stock exchanges: things never seen since 2005.
MILAN CONTAINS LOSSES. BAD DAY FOR FRANCE
The Milan price list contained the losses: -0,59% to 20.612 points. Frankfurt (-0,39%) and Madrid (-0,47%) did even better. Heavier are Zurich (-0,9%) and London (-1,2%). Worst of all, Paris (-1,47%), held back by the Chinese crackdown on luxury shopping.
CHINA IS HOLDING BACK LUXURY. DOWN THE PARISIAN BRANDS AND MONCLER
Bloomberg reports that restrictions on Chinese luxury goods purchases abroad have been in place for a few days. According to rumors, reported by local social media, the airport authorities are applying higher customs tariffs on products bought abroad Kering has accused a drop of 6%, Lvmh of 5%.
The negative wave also affected Italian stocks in the fashion sector starting with Moncler, down by 5,6%. Since the beginning of the year, the duvet brand has risen by 40%; in 2017 the increase was 58%, in 2026 it was 28%. Salvatore Ferragamo -1,32% and Brunello Cucinelli -2,40% were also weak.
THE DEF ARRIVES IN BRUSSELS. COMPARISON WITH THE EU UNDERWAY
The government continues to give numbers on the figures of the Def and the Budget law. This time they should be defined because they are indicated in the letter that the Minister of Economy Giovanni Tria sent to the European Commission.
According to the executive, growth will be 1,5% in 2019, 1,6% in 2020 and 1,4% in 2021. The deficit/GDP will go from 2,4% next year to 2,1% of 2020 and 1,8% in 2021.
"Now the phase of confrontation with the European Commission has begun, which will be able to evaluate the well-founded reasons for the government's growth strategy outlined by the maneuver" specified Minister Tria.
CALA THE SPREAD, BUT ONLY BECAUSE OF THE BUND
The spread falls, but only due to the increase in German yields in line with the US T Bonds.
It was a quiet session, at least by the standards of this turbulent season for Italian debt securities. In the afternoon, the unconfirmed rumor of the ECB's intention to buy more long-term bonds stirred things up.
The yield of the 10-year Italian BTP goes to 3,33%, even if the spread with the Bund falls to 279.10 basis points (-2,14%) due to the greater tensions on the German ten-year, whose yield rises to 0,533%
Spain and France have taken action on the primary. Madrid with the placement of 4,64 billion on three nominal securities, out of an expected range of 4-5 billion, and 410 million of an indexed one, against a range of 250-750 million; Paris with the allocation of 8,86 billion on three Oats
INTESA LEADS THE REBOUND OF THE BANKS
Banks well bought after the recent jolts linked to the uncertainties on the maneuver and in conjunction with the new drop in the Btp / Bund spread below 280. The Italian stoxx gains 1,07%.
Intesa stands out (+2,15%). Since the beginning of the year, the performance is in the red by 22%, after having reached a maximum of +16% in April. HSBC confirmed the Buy, however reducing the target to 2,9 euros. Unicredit also performed well (+2,3%).
The former Popolari also rose: Banca Bpm +0,8%. Bper +0,62%: the subsidiary Banco di Sardegna obtained from the Mef the Gacs state guarantee on senior securities of the 4Mori Sardegna securitization, the nominal value of which is equal to 232 million euro.
the insurance companies jumped: Generali +0,82%, Unipol +1,88% and UnipolSai +1,84%.
THE LOCK UP ON CAMFIN EXPIRES. UBS DOWNGRADE ON PIRELLLI.
Under fire Pirelli (-3,32%) held back by the downgrade of Ubs and the announcement of the expiry of the lock up on Camfin. Marco Tronchetti Provera & C., Fidim, Massimo Moratti and Finanziaria Alberto Pirelli have communicated their commitment to remain in the Camfin shareholding structure for three years, while Unicredit will initiate discussions with the shareholders. Upon completion of the reorganization, Camfin will control a slightly more than 10% stake in Pirelli. Yura International and Vittoria Assicurazioni, headed by Carlo Acutis, will exit, obtaining cash settlement of the investment from Camfin.
UTILITY DOWN, BUT TIM RECOVERS
Among the negative protagonists of the day were utilities, the most sensitive to rate hikes: Enel -1,5%, A2A -2,3%, Italgas -2,3%.
Tim recovers, up by 2,12% but with below-average volumes. Since the beginning of the year, the stock has fallen by 31%
SPECULATION MAKES ASTALDI FLY. SALINI DOES BUSINESS IN TEXAS
Astaldi flies (+29,59%) which has applied for a blank composition with creditors (the debt as at 30 June amounted to 1,9 billion). The impetus came from the interest declared by Salini Impregilo +0,69%, which in turn was the protagonist of the signing of an agreement with Texas Central for the development of the project (total value 20 billion dollars) for the high-speed line in Texas. In addition, the Lane subsidiary was awarded a new $253 million contract in Florida to design and build Wekiva Parkway in Seminole County, north of Orlando.
