Trump tariffs spoil Wall Street's party

The American stock market celebrates the longest bull run in history, but the reopening of the trade war risks favoring the advent of the Bear – The European car slows down on the stock market in the wake of the Continental crash – Atlantia counterattacks after yet another decline

Wall Street is celebrating the longest bull run in history: 3.453 bull market days, which allowed the capitalization to increase by 18.000 billion dollars. On the same day, the fall of the Shanghai Stock Exchange since January reached 26%: the trade war favored the advent of the Bear. It is in this framework that the US and China have resumed trade negotiations. For now, on a low key, at the level of undersecretaries, and without renouncing the latest flurry of increases: tariffs rising by 25% for 16 billion of Chinese imports into the US, the same for US goods to Beijing. Furthermore, Trump has reopened the dossier of increases on cars arriving from Europe.

CHINA DOWNS, DOLLAR UP AFTER FED MINUTES

But what cools the enthusiasm of the US markets for the records is above all the delicate judicial situation of Donald Trump after the decision of his personal lawyer, Michael Cohen, to collaborate with his great accuser, the prosecutor Robert Mueller. Meanwhile, the reading of the Fed minutes confirms that the Central Bank is preparing for a new round of rate hikes.

Uncertainty has thus curbed the desire to party. The Chinese stock markets are down (CIS 300 index -0,4%, Hong Kong -0,7%), Japan is on parity in the final session.

The dollar strengthened after the publication of the Federal Reserve meeting minutes: 110,8 against the yen, 6,87 against the Chinese yuan, up 0,5% after five consecutive days of decline.

Last night the euro closed at 1,159 against the dollar, the sixth consecutive day of appreciation against the dollar, this morning the cross is 1,155.

US Stock Exchanges contrasted, held back by the judicial proceedings of the president: Dow Jones -0,34%, S&P 500 -0,04%. NASDAQ +0,38%

OIL AT HIGH, SKIP THE ARAMCO LIST

The price of oil lights up. to the highs of the last three weeks. This morning it is trading at 74,7 dollars a barrel: US strategic stocks have fallen by 5,8 million barrels, much more than expected.

Saudi Arabia has renounced the listing of the oil giant Aramco. According to Reuters, the Saudi government will not proceed with the IPO, a decision, according to agency sources, taken some time ago but no one can make it public, therefore continuous delays will be communicated and then the step back will be announced', the insider sources said that financial advisers working on the listing were left mystified when Saudi Arabia shifted focus to a possible acquisition of 'a strategic stake' in local petrochemical group Saudi Basic Industries. In 2016, Crown Prince Mohammed bin Salman announced plans to sell 5% of Aramco via domestic and international listing. According to forecasts, the IPO, the largest ever, would have brought out a value of over 2.000 billion dollars.

Saipem takes center stage in Piazza Affari (+2%). Eni +0,6%, little movement Tenaris.

EUROPE WEAK, CONTINENTAL LANDSLIDE

European markets around parity, frightened by new tariffs from the United States and by the alarm on the car. Supporting the indices was the rally in oil.

Piazza Affari closed down by 0,41%, at 20.699 points. Madrid (+0,33%), Paris (+0,22%), London (+0,14%) and Frankfurt (+0,01%) are doing better.

Among the German stocks, Continental should be mentioned, down by 13%. The company, a leader in the tire segment, cut its 2018 forecast as it expects lower sales, higher costs and higher claims.

THE SPREAD ABOVE 270 POINTS. FT: CAPITALS FLIGHT FROM BTPs

Bonds weaken: the 3,06-year yield rises to 270.80%, while the spread with the Bund reaches 2,97 points, +XNUMX%.

According to the Financial Times, the flight of foreign investors from Italian government bonds continues. In June, the total of BTPs held by foreign investors decreased by 38 billion euros.

Germany yesterday placed 2,424 billion 0,30-year Bunds at an average rate of 0,47%, up from XNUMX% in the previous auction.

Released in the early afternoon, a Goldman Sachs report revised downwards its estimate of the German ten-year yield at the end of 2018, now projecting it to 0,50% from the previous 1%.

PIRELLI UNDER FIRE, PURCHASES ON PININFARINA

Pirelli (-4,58%) was hit by the sales triggered by the Continental warning. La Bicocca announced in the evening that "with regard to hypotheses of possible deterioration of the market, it does not detect significant changes that have an impact on its forecasts for the current year communicated on the occasion of the first half-year data". Brembo (-2,5%) and Sogefi (-5,1%) are also down.

Fiat was also negative (-1,2%) which suffers the effects of the tariff threats launched by Trump. Press rumors report of an offer on Magneti Marelli from KKR through the Japanese operating arm Calsonic Kansei. According to Bloomberg, Magneti Marelli could be worth up to 7,6 billion dollars, including debt, according to a comparison with peers, and could obtain a high credit rating by going public. Analysts calculate that the auto parts supplier could generate more than $2 billion in dividends for Fiat Chrysler, which can be used to reduce debt or build intragroup extraordinary finance deals.

Pininfarina sharply up (+5,04%), in a market that is processing the news of the next meeting with analysts in September, the first since 2008, which is imagined to give some targets capable of supporting the prices.

ATLANTIA: "ENOUGH EXPRESSIONS, WE CAN LEAVE"

Yesterday Atlantia abruptly reversed the initial positive trend, losing 4% with a price around 18,15 euros (19,34 euros in the morning). The company has decided to counterattack against the government, the board of directors has "started the evaluation of the effects of the continuous utterances and the dissemination of news on the company, having regard to its status as a listed company, with the aim of protecting the market and savers in the best possible way” after suffering a 27% drop (5,5 billion) on the Stock Exchange. The company is also evaluating, after the controversy over possible nationalization, the impact of a possible exit from the motorway business in Italy.

The government is said to be divided on the actions to be taken after the tragedy in Genoa: the Movimento 5 Stelle would like to return the concessions to Anas, the League does not want to hear about nationalization and would be in favor of a partial intervention by the Cassa Depositi e Prestiti. Moody's warned yesterday evening that it had put Atlantia's rating under review, in view of a possible downgrade. The provision also affects the creditworthiness of Autostrade per l'Italia. Currently ASPI's rating is Baa1, Atlantia's is Baa2.

Tim+0,1%. Il Sole 24 Ore states that the company is working on an infrastructural agreement with Dazn to overcome the holes in streaming. An expansion of the agreements on the contents to be brought to Timvision is also being studied.