The dress almost always makes the monk. That "tax the rich" printed on the dress worn by Alexandria Ocasio-Cortez, an icon of the left not only in the USA, at the grand gala of the American fashion week (stuff for the super rich) is as good as a red flag waved in front of the Bull on Wall Street, exhausted after the long run. Markets seem resigned to undergoing the autumn correction, hoping to limit the damage before the Christmas rally.
Apple's top management also think so: yesterday there were few new products on display at Apple Park. But the new products, however more powerful, do not increase in price. Indeed, all operators, from AT&T to Verizon, promise deep discounts to those who deliver the old iPhone and renew the rate plan. The result on the Stock Exchange is a modest drop of 1%. In short, the important thing is to limit the damage while waiting for the (Chinese) storm to pass.
THE CHINESE ECONOMY IS STILL HOLDING BACK: CONSUMPTION AT RISK
Dragon price lists are still slowing down. The Csi index of Shanghai and Shenzhen is weak, Hong Kong leaves 1% on the ground. But prices do not measure the concerns about the slowdown in the economy.
The data published tonight by the National Statistics Office show that measures to contain the contagion are holding back the expansion heavily, especially as regards consumption. Retail sales, in August, rose by 2,5% year on year, a sharp downsizing from +8,5% in July: the consensus was expecting +7%. Industrial production was also below expectations: +5,3%, from +6,4% in July.
On the other hand, the Korean Kospi rose (+0,4%) despite the return of missiles from the North.
INFLATION HOLDS DOWN, T-BOND CURVE FLATTENS
Wall Street futures rose slightly after a down session for US stocks: Dow Jones -0,87%, S&P -0,57, Nasdaq -0,45%.
Chinese President Xi declined Biden's invitation for a bilateral meeting. First, the Chinese president allegedly said, Washington will have to change its tune.
In August, inflation in the United States grew by 0,3% compared to the previous month, less than the +0,4% expected. The year-on-year increase was 5,3%: inflationary pressures caused by the economic restart may have reached their peak, proving the Fed chairman right: tapering is less close.
The 1,29-year Treasury Note stands at a yield of 4%. Yesterday there was an important flattening of the market rate curve: the spread between the two-year and the ten-year rate fell by 107 basis points, to XNUMX.
Gold is slightly down after two days of appreciation that brought it back above $1.800 again. Euro dollar barely moved, on the levels of a week ago, at 1,180. WTI oil at 70,9 dollars a barrel, +0,6%.
BONDS RUN, SPREAD BELOW 100
The unexpected slowdown in US inflation has also made itself felt on the other side of the Atlantic: share prices are marking time, investors are returning to buying bonds following the latest data on consumer price trends. The new climate is also arriving in Italy, the market most sensitive to the evolution of the bond markets. The slowdown in the yield on ten-year US T bonds, retreating to 1,277%, had an immediate impact above all on the ten-year BTP, which fell to 0,65% from 0,71%, and, above all, on the spread: for the first time since April the spread with the German Bund dropped below the 100-point barrier (to 98).
BTP (LOWEST SINCE MARCH) AT AUCTION
The rally in the peripherals was favored by the decline in the Bund, coinciding with the launch of a seven-year EU bond (9 billion placed, demand for 88) and the positive outcome of the Italian auctions: the rate on the three-year bond it fell to its lowest since February, close to the historic low of -0,33%, and the 7-year low since March, also in this case approaching the lowest level of the historic series (0,18% in February).
ECB PURCHASES ARE STOPPING. GS: BUNDLES EARLY ABOVE PARITY
But the picture, according to Goldman Sachs, is destined to change with the progressive loss of support from the ECB. The Btp/Bund spread is set to widen to 120 basis points by the end of 2021. The spreads, according to economist George Cole, will increase "slowly", while the yields on 10-year German Bunds, today at -0,34 %, will reach 0% in the first quarter of 2022.
The ECB, in line with what was stated at the end of last week's directory, has already slowed down its purchases on the market, buying bonds for 14,66 billion euros, down on the 16,74 billion of the previous week. The total assets purchased since the beginning of the program have risen to 1356,48 billion out of a total budget of 1850 billion.
MILAN +0,39%. FRANCO: "ITALY, INTENSE RECOVERY"
In this context of partial escape from risk, Piazza Affari was an exception: the index +0,39% again exceeded 26 (26.027).
The Minister of Economy Daniele Franco, speaking at the presentation of Sace's Export Report 2021, said that "Italy is experiencing an intense recovery phase, supported by the trend of the international economy, by the reopening of economic activities and also by the economic policy measures. Thus the "acquired growth of GDP for this year is +4,7%, and the third quarter is going well".
Frankfurt follows, up 0,12%. London slips below parity (-0,20%). The best price list is that of Amsterdam (+0,73%), the most sensitive to the trend of technology. Paris (-0,47%) is held back by Chinese shadows on luxury.
In great evidence Pandora (+5,25%): the largest European jewelery company has raised its growth targets for the year.
BEIJING MAKES LUXURY SHAKE, FERRAGAMO -3,5%
The new travel restrictions imposed by the Chinese authorities a few weeks before the early October holidays have unleashed a new wave of sales in the luxury sector: Kering lost 2,76%, Lvmh -1,55%, Hermès -0,74% . In London Burberry loses 1,76%. Worse Richemont in Zurich (-3,54%).
Luxury in retreat also in Piazza Affari: Salvatore Ferragamo -3,4%, Moncler -0,5%.
APPLE EFFECT AND ACCOUNTS PUSH STM
On a difficult day for the stock markets, operators focused on Apple, which yesterday evening, during the show entitled California steaming, presented its new products in view of Christmas. Stm benefited from this (+3,62%), which has Apple as its first customer (24% of its 2020 turnover). The share of the Italian-French joint venture was the sixth most traded in yesterday's session, on the eve of the meeting with the CEO Jean-Marc Chéry. “We expect confirmation of very solid demand – writes Equita – albeit with continuous bottlenecks in the supply chain that potentially worsened in August due to the difficult situation in Malaysia. However, the revenue guidance should be confirmed in the range of 12,4-12,6 billion dollars”, continues the broker, who confirmed the hold rating and the target price at 38 euros.
NEW HIGHS FOR ENI, AMPLIFON BOUNCES
The oil rush continued. Eni (+1,3%) reaches new highs at 10,97 euros, returning to the levels of March 2020, before the Covid-19 pandemic triggered a sharp drop in the prices of the oil major to the lows of 5,66 euros reached at the end of October last year. Flat Tenaris, down Saipem after the leap on the eve.
Pharma is one of the brightest sectors: Diasorin rises (+2,49%) preceded by Amplifon (+3,39%), on which Mediobanca Securities raised its target price from 39 to 40 euro, confirming its neutral rating, in the wake of the presentation of strategy and financial objectives of the group.
Cars are racing again: Ferrari +1,82%, Stellantis +1,4%.
GENERALI, THE MAJORITY OF THE BOD WITH DONNET
Generali's performance is uncertain (-0,3%), while Mediobanca rises by 0,7% on the day of the meeting of the non-executive board members of the insurance company in view of the board renewal procedures. Out of 12 participants, 8 non-executive directors expressed themselves in favor of confirming Philippe Donnet, 4 against.
In the rest of the sector, Unicredit lost 0,7%, Intesa Sanpaolo 0,25%. However, the asset management rally continues: Banca Generali + 0,75% to new all-time highs (39,65 euro).
DE LONGHI SELLS 4%, SANLORENZO SUPERSTAR
De Longhi sinks, losing 8,5%, at 35,56 euros. The share is approaching the price of 35,38 euro at which 4% of the capital was placed through accelerated bookbuilding. The shares were sold by Giuseppe De Longhi and De Longhi Industrial, which controls 56% of the company.
Sanlorenzo stands out, up 6,2% after Berenberg raised the target price to 35,5 euros from the previous 29 euros, in the wake of the half-year results announced on Monday. Digital Magics (+6,88%) runs on Aim: the company has announced that the capital increase will start on 27 September.
