We were missing a scoop from the Washington Post, the glorious Watergate masthead, to raise the tension on Russiagate, the most intricate knot among the many created by Donald Trump since the election. The newspaper, now owned by Jeff Bezos, revealed that Trump sent the Russians secret material on Isis arriving from an ally (Israel, it was learned in the evening) putting the source at risk. After denying it all day, the president confirmed it just in time to face another charge: In February, reports show, he asked FBI director James Comey to stop the investigation into General Flynn, then forced to resign by tests on relations with Moscow.
It may be a coincidence (but probably not), the story coincided with the drop in the dollar, which fell to 1,1089 against the euro, at the values of November 9, the day of the president's electoral triumph. A forcing? Perhaps. But, as Giuseppe Sersale of Anthilia writes, "several of the factors behind the greenback's recent weakness are in whole or in part a product of the US administration's impasse." Goldman Sachs notes that "without the tax cut, the multiples of listed companies, at historic highs, are unjustifiable".
Meanwhile, as a report by Deutsche Bank points out, purchases by managers on European stock exchanges without exchange risk hedging are on the rise, confirming that the fear of a euro crisis has vanished. On the contrary, there is a bet on tapering, i.e. the reduction of Qe and, in the future, on an increase in European rates. In short, Trump's troubles are bad news for Italy, held back by the weak dollar and the threat of higher costs to finance the public debt.
THE US CURRENCY FLAWS EVEN IN ASIA
Trump's difficulties triggered new sales in Asia this morning on the dollar, which fell to 112,64 on the yen (-0,5%) and on futures on US stock exchanges: the Dow Jones Asia index is down 0,4%. Tokyo brakes (-0,5%) under the pressure of the yen. The other markets are also down. Chinese equities were weak: Hong Kong -0,3%, Shanghai -0,2%. Singapore -0,4%, Seoul -0,2%.
BUT THE NASDAQ CLOSES WITH A NEW RECORD
On Wall Street, the Dow Jones index closed on the previous day's levels (-0,01%). The S&P 500 updated its all-time high to 2.405,77 at the start, only to then drop 0,07% at the close. The list has reached the fifteenth consecutive session of daily variations of less than half a percentage point: to find such a long period of such low volatility we need to go back to 1969. A record also for the Nasdaq, which rose by 0,33%, to 6.170. Since the beginning of the year, the performance of the Nasdaq (+14,6%) is double that of the S&P500. Microsoft closed up 2%.
INDUSTRIAL PRODUCTION IS GOOD, OIL IS HOLDING DOWN
Trump's difficulties prevented the market from appreciating the excellent leap forward in industrial production, which increased by 1% in April, the highest growth in the last three years. On the other hand, the number of construction sites started for the construction of new houses decreased by 2,6%.
Setback in the growth of oil prices: after the increase in US inventories, the WTI lost 0,4%, to 48,66 dollars a barrel. Oil companies thwarted in Piazza Affari: Eni +0,3%, Saipem -0,4%, Tenaris -1,1%.
THE STERLING AND VODAFONE SPING THE CITY TO THE MAXIMUM
The positive situation of the European economy was confirmed by the GDP data of the Eurozone for the first quarter (+0,5% quarterly +1,7% tendential). In line with forecasts, the increase in Italian GDP was weaker: +0,2% over three months, +0,8% on an annual basis.
This afternoon at 15 pm Emmanuel Macron presented the government team led by the current mayor of Le Havre Edouard Philippe. The slight delay on the timetable is due to the president's desire to carry out a careful verification of any conflicts of interest.
The day was marked by the rise of the euro not only against the dollar but also against the pound (up to 0,8594 pounds), strengthened by solid macroeconomic data and the easing of political fears relating to Europe. Driven by the weak pound, the London Stock Exchange rose, +0,91%, reaching new all-time highs, touching 7.500 points for the first time.
The star of the City was Vodafone (+3,84%), after the announcement of annual profits beyond expectations. The performance of Vodafone Italia contributed to offset the negative effect of Vodafone India, engaged in a tough price war: for Mediobanca Securities these results confirm the recovery of the Italian market already reported by Telecom Italia's quarterly, yesterday +1,61 %.
In Piazza Affari, the FtseMib index closed up 0,3% to 21.788. The Frankfurt Stock Exchange remained unchanged, Paris ended at -0,2%.
BTP ITALIA REACHES 2,7 BILLION. RETAIL OFFER CLOSES TODAY
The second day of placement for small savers of the BTP Italia in May 2023, with a guaranteed minimum coupon of 0,45%, closed with subscriptions of 1,08 billion euro, which brings the total issued to 2,7 billion euro . Public demand has therefore already exceeded the total of the previous issue made in the autumn of the BTP Italia in October 2024, with a minimum coupon of 0,35%, which had closed the three-day placement window with orders for 2,2 billion, which then they added 3 billion from the institutions.
Positive closure for the Italian bond market and for the other government bonds of the so-called periphery of the euro area. The spread on the 10-year Bund drops to 180 basis points from 186 at the previous closing, after a dip to 178 basis points, the levels seen after the victory of the centrist Emmanuel Macron in the French presidential elections.
The Italian ten-year rate fell to 2,22% from 2,28% at the end of Tuesday's session. The 3-year Italy/Spain differential fell by 62 cents 10 basis points.
HANDELSBLATT: EU PROCEDURE AGAINST FCA TODAY
New German torpedo against Fiat Chrysler. Handelsblatt writes that the EU Commission believes that Italy has willfully ignored the illegal devices for manipulating emissions in Fiat Chrysler diesel cars and will launch proceedings against the country tomorrow. The newspaper points out that it was not possible to obtain a comment from either the FCA or the Italian government.
Fiat Chrysler fell 0,5% yesterday. Car registrations in Europe recorded a drop of 6,8% in April, a month penalized by a few fewer working days linked to Easter. The FCA group has done better than the market thanks to the leap of the Alfa Romeo brand, which has launched the new Giulia and the SUV since the autumn of 2016. According to data released by the Acea manufacturers' association, 1,23 million vehicles were registered in the EU+EFTA area in April, down 6,8% on April 2016. In the first 4 months, however, recorded an increase of 4,5%. FCA saw a 0,5% decline to 89.264 vehicles, with market share at 7,3%, up from 7,2% in the first four months of 2017.
Weak Ferrari (-1,23% to 76,5 euros): Equita Sim yesterday reduced the weight of the stock in its main portfolio. On the contrary, Cnh Industrial +0,66%. Mediobanca Securities confirmed the positive opinion (outperform, Tp 11,6 euro) highlighting that after a good rebound in February/March the data on tractor sales in April continue to be solid worldwide.
ENEL "ELECTRICITY". ATLANTIA STILL ON THE RISE
Standing out in the list are the performances of some of our big names, in strong international expansion via Spain. It was an electric session for Enel (+2,4%, at 4,68 euros), the highest in the last six years and the best blue chip in the Milanese list. Fitch confirmed the BBB+ rating for Enel and for its subsidiary Endesa, the leading electricity producer in Spain. For both, the outlook, or the judgment on future prospects, is "stable". Goldman Sachs raised its target price to 5,5 euros from 5,4 euros, confirming the stock in its Conviction List Buy.
In the meantime, Atlantia's run continued (+1,6%), triggered by the launch of a 16 billion euro takeover bid on the Spanish Abertis. Moody's confirmed the ratings of the Italian group, but with a negative outlook to reflect "the potential weakening of the company's financial profile due to the higher debt load". The stock was included by Equita Sim in its main portfolio with a weight of 550 basis points. The rating is buy, with the target price rising to 28 euros from 26,5 euros.
JP MORGAN AWARDS GENERALI
Brilliant Generali (+1%). Independent Research raised the target price to 15,5 from 15 euro, confirming the "hold" rating. JP Morgan did the same: the target share price rose to 16,8 from 16,5 euros, the overweight recommendation confirmed. Analysts raised estimates to reflect the company's new plan to boost asset management earnings. Banca Generali also rose +1,9%.
Banks tend to be weak, in line with the sector of the old continent where the drop in Ubs (-2,17%) still weighed in the wake of the accounts for the quarter. In Milan the worst is Bper -1,7% while the index drops by 0,15%. Intesa unchanged, slight increase for Unicredit (+0,1%), Banco Bpm falls (-0,9%).
LUXOTTICA LEAVES WALL STREET, PERFUME SETTS ITSELF IN LEONARDO
Luxottica (+0,46%) leaves Wall Street. The Board of Directors decided yesterday to start the delisting procedure of the ADRs (American Depositary Receipts) from the New York Stock Exchange. The choice was motivated by the progressive drop in share trading (3,7% of daily trading) now concentrated on the Italian market. The delisting will also allow greater efficiency in view of the integration project with Essilor.
Leonardo's assembly nominated yesterday the new board of directors, which will meet tonight to designate Alessandro Profumo in place of Mauro Moretti. The new Board, in office for the next three years, goes from 11 to 12 members. The members of the Treasury list, which holds 30,2% of the company, are the chairman Giovanni De Gennaro, Alessandro Profumo (new), Guido Alpa, Marina Elvira Calderone, Marta Dassù, Fabrizio Landi, Luca Bader (new), Antonio Turicchi (new). The members of the minority lists, presented by asset management companies and institutional investors, are Paolo Cantarella, Dario Frigerio, Marina Rubini, Silvia Merlo.
Among editorials, Rcs (+2,4%) and Il Sole 24 Ore (+4,5%) advanced. Conversely, Cairo Communication lost almost 2% after the results. Datalogic did well, +2,7% after the accounts and the confirmation of the estimates for 2017.
