"American politicians underestimate our strength: it will not be easy to do without their chips, but we have sufficient stocks". So yesterday evening said Ren Zengfei, the president of Huawei, interviewed by Chinese TV. The former Chinese army officer said that the company is technologically advanced and is ahead of all others in 5G telephony: within a few years, sanctions or no sanctions, the effects of its primacy will be seen. This is Beijing's response to the US decision to ban relations with the Chinese giant, which culminated in the Google's decision to exclude Huawei from the most common services, including Gmail, a move that marks a qualitative leap in the duel between the Greats: the commercial war has become a technological war with no holds barred, with unpredictable costs for now. Not just for the big two.
Waiting to see how it will end, the US authorities surprisingly granted 90 days before imposing the ban. Negotiations are also underway with Google to try to find a solution, said the Chinese giant's founder Ren Zenghfei.
Chinese stock markets are holding up for now: China's stock markets rebound after two consecutive days of decline, CSI 300 index of Shanghai stock exchanges Shenzhen +1,9%, Hong Kong +0,3%, Taipei +0,6%.
Washington specified in the evening that the bans on Huawei will only become effective in three months. “A postponement that is not worth much,” commented Ren.
WEAK TOKYO WAITING FOR TRUMP
In Asia, most stock markets rise India's BSE Sensex index, up 0,5% to 39.550 points this morning, is at an all-time high after polls predicted Modi's success in the elections. The final figure will be announced on Thursday.
The exception is Tokyo (-0,3%), which is about to receive a visit from Donald Trump who will also attend the sumo championships.
US markets were weak yesterday, stressed by the prospect of a sharp decline in the semiconductor industry. Dow Jones -0,33%, S&P 500 -0,67%, Nasdaq -1,46%.
CHIPS COLLAPSE: STM -9,7%. APPLE AND TESLA CRUSH
The Sox index (Philadelphia Semiconductor Index) closed down 4% to a three-month low. Qualcomm, which specializes in chips for the world of telephony, is among the worst in the sector with a drop of 5%. In Europe, Infineon (-5%) and, above all, Stm, are paying a high price, leaving 9,7% on the ground.
Landslide Apple (-3,5%) also due to the risk of Chinese retaliation: since the beginning of the month, the stock has lost almost 15%.
Tesla shoulder bag: -4,7% below $200, a price it hasn't seen since the end of 2016. The more traditional car is no better: Ford announced it would cut 7 jobs worldwide.
GOLDEN ANNIVERSARY BETWEEN SPRINT AND T-MOBILE
The TLC sector contained the losses. Sprint Corp. has achieved a leap of 23% that drags the entire telecommunications sector. T-Mobile USA earns 5,2%. The two companies have obtained the go-ahead from the president of the US telecommunications regulator for the 26 billion dollar merger proposal.
Donald Trump, in an interview with his favorite network, Fox News, said he was comfortable in this situation. According to him, the tariffs announced by both sides do much more harm to China, which is weaker because the trade balance is entirely shifted towards the United States. China could also delay the negotiations, weakening Trump in view of the start of the electoral campaign: Joe Biden, Obama's former deputy, according to the polls, is ahead of all the contenders in his field, but also over Trump himself which has already ordered investigations into the challenger's relations with Beijing.
OIL RISES: IRAN INCREASES URANIUM PRODUCTION
Brent oil was up 0,3% to $72,2 a barrel this morning as Iran ramped up enriched uranium production following its decision to no longer respect the limits it set itself in 2015. L Tasnin news agency reported on it tonight, quoting a senior official of the state atomic energy agency.
At Piazza Affari Eni -0,2%, Saipem -1,3% and Tenaris -0,3%
MILAN HOLDS DESPITE THE COUPON EFFECT
The war on Huawei also dominated the scene in Europe. On the other hand, as Limes writes, the Old Continent is perhaps the main battlefield of the challenge: “From a geopolitical point of view, Europe represents for Beijing the squaring of a circle of undoubted fascination. China cannot and will not attack America's tech leadership directly. The American market is difficult to penetrate, so move to Europe, which nonetheless has dynamic economies, a high standard of living and a hunger for technology, has become a prime target”.
Piazza Affari withstood the blow: the drop, net of the effects of the Dividend day (71 companies detached the coupon) was reduced to approximately 0,20%.
The Ftse Mib index dropped 2,68% at 20.540 points, of which 2,55% due to the coupons. The Mid Cap index (-2,01%) and the Star (-1,45) are also in the red. The other European stock markets were much worse, Dax in Frankfurt -1,6%, Cac40 in Paris -1,4%. London retreats by half a point.
THE SPREAD RISES TO 280, NEW DISPUTES IN THE GOVERNMENT
Thin volumes for the bond market a few days before the European vote, despite the new tensions in the government. Prime Minister Giuseppe Conte, responding to the Northern League undersecretary Giancarlo Giorgetti who described him as no longer "super partes", said that it was "very serious" to question his impartiality.
The spread settled at 280 basis points from 278 on Friday. The ten-year rate is in the 2,70% area, from 2,67% the previous session.
TIM, LESS REVENUE BUT ALSO LESS DEBTS
The effects of the US news on telecommunications was also felt in Europe: the Eurostoxx index for the sector was yesterday the only one to close on positive ground in the Old Continent. But the euphoria has not infected Tim -0,7% waiting for the bills approved by the board last night. The quarter ended with revenues down (-4,6% to 4,47 billion), debt slightly down (25,08 billion) and cash flow positive for 514 million. The conference call with CEO Luigi Gubitosi will be held this morning.
ENEL AND ITALGAS LEAD THE UTILITIES
In the Italian list, the defensive stocks were saved, starting with Utilities: Enel +1%. The Argentine subsidiary Empresa Distribuidora Sur SA (“Edesur”) has signed two agreements with the Argentine national state which allow for the resolution of some previous and still pending disputes, with a positive impact on the 2019 consolidated Ebitda of approximately 180 million euros.
Italgas (+1,5%) and Snam (-0,4%) also performed well.
FCA, FOR BANCA AKROS IT IS ACCUMULATED
Fiat Chrysler (-0,88%) detached the extraordinary coupon of 1,3 euro per share. On the stock, Banca Akros adjusted the target price to 14,7 euro from 16 euro, confirming the accumulated rating.
UNICREDIT, PROOF OF AGREEMENT ON COMMERZBANK
Among the banks, Intesa Sanpaolo +0,6%, Ubi Banca +0,3%, Unicredit -2,4%, Mediobanca -0,2% (Banca Mediolanum slightly increased its share to 3,36%) and Banco Bpm -1% (HSBC cuts the target price to 2 euro). Generals +1%.
Outside the main basket, the leaps forward of Fiera Milano (+4,5%), Rai Way (+4%) and Erg (+3%) should be noted.
