Mario Draghi is a lucky man. This is confirmed by the plunge in oil (-5%) to its lowest in six weeks after the increase in US stocks and the confirmation of growth estimates for shale oil production (9,21 million barrels against 8,98 previously). The decline in crude oil takes pressure off the inflation trend in the Eurozone, allowing the president of the ECB to have good arguments against the German hawks but also to be able to underline the improvement in the economic situation without frightening the markets with the prospect of a possible tapering , i.e. a reduction in purchases on the market.
On the contrary, Draghi will be able to underline that the measures decided in December will take effect from this month (the Central Bank's asset purchases fall by 20 billion, from 80 to 60 per month), and that it will be necessary to evaluate the effects of this reduction before putting further modifications in the pipeline. Barring surprises, unlikely both in Frankfurt and Washington, pending the discounted rate hike.
But a possible surprise is signaled by a report by Intermonte advisory which signals the mutation of Piazza Affari, which from "the ugly duckling of Europe will become the swan of the coming months". That is, the combination of P/E, exponential growth in profits and an improvement in the Italian economy can give hope for a strong comeback of the Italian Stock Exchange.
US EMPLOYEES GROW. CATERPILLAR IN THE FISCO OF THE TAX
The fall in crude oil, the most violent in the last six months, favored the third consecutive decline in the US markets. The Dow Jones Industrial loses 0.33%, S&P 500 -0,23%. Only the Nasdaq rose slightly (+0,06% to 5,837.55 points) which does not include oil stocks.
New jobs in the private sector grew by 298 units, much more than the 187 expected. At this point, a 25-point rate hike at next Wednesday's Fed meeting is pretty much a given.
On the bond market, the ten-year benchmark yields 9/32 and yields 2,57%, the highest since mid-December. Thirty-year-olds lose 18/32 with a rate of 3,14%. The two-year bond yields 1,37%, the highest level since 2009.
Caterpillar slumped (-2,8%) after the New York Times published a government report accusing the company of tax fraud. Eyes also on Tesla (-0,7%): number one Elon Musk will meet US President Donald Trump tomorrow to talk about infrastructure.
Snap's ups and downs continue: +6,4% after losing 15% during the week. The wild swings are set to continue, predicts David Tepper one of the most followed traders on Wall Street. "I sold everything – he explained to CNBC – but now I'm ready to go back".
OIL -5%: STOCKS NEVER SO HIGH SINCE 1982
Oil prices plummet to their lowest for the year after the sharp increase in US inventories, which rose by 8,2 million barrels, four times the forecasts, up to a total of 529 million barrels, the highest since 1982. Brent the WTI fell to 52,93 dollars a barrel (-5,03%, the lowest since 8 December), the Wti to 53,11 dollars (-5,38%).
The quotations of Big Oil are down: Exxon -1,81%, Chevron -1,97%. The European Oil & Gas sector loses 0,8%. In Piazza Affari Eni -1,6%, Saipem and Tenaris -0,7%.
CHINA INFLATION SETTLEMENT
The drop in crude oil and other commodities also affected Asian lists. Bhp Billiton (-4,5%) and Rio Tinto (-2,8%) fell back. This morning, thanks to the recovery of the tech sector and data on consumption, the Tokyo Stock Exchange rebounds after four consecutive sessions of decline: Nikkei index +0,3%.
Hong Kong loses 0,9% and Shanghai 0,8%. Alarming data on inflation released tonight. Consumer prices rose by only 0,8% year on year, against +2,5% in January and +1,7% expected. On the other hand, producer prices mark an increase of 7,8% which exceeds estimates. If this situation were to continue for a few more months, it would be a sign of a slowdown in the expansionary dynamic.
The escalation of geopolitical tensions weighs on the won and on the Seoul Stock Exchange: China threatens countermeasures after the installation of the American Thaaad missiles on the territory of South Korea.
The number of Indian billionaires is down: only 100, down from 111 in 2015. It is one of the effects of the demonetization policy practiced by the Modi government. But the 100 control 58% of the country's wealth. India is thus overtaken by Germany (109), detached from China (609) and the USA (552).
EUROPE: FLAT EXCHANGES, BONDS SALES
Yesterday's European session ended with a modest rise in stock markets and a wave of bond selling. Milan rises albeit slightly: the Ftse Mib index gained 0,14% to 19.482 points. The other price lists are also positive. The other EU indices, the Cac40 closed up by 0,11%, while the Ftse 100 closed down by 0,06%.
Eurozone government bond yields rose on the back of recent macro data which boosted expectations of a possible change of tone by the ECB at tomorrow's meeting, Rabobank analysts say, who specify that the solidity of growth and inflation numbers reduces the need for the Institute's accommodative stance. “The hawks in the Governing Council will put more and more pressure on Draghi,” the experts add.
After a start at 185 and a leap up to 193, the yield premium between the ten-year Btp and the Bund closed the session at 190 cents. The yield of the ten-year BTP rose to 2,25% from 2,19% yesterday.
German and French paper yields are definitely under pressure. In the case of the Bund, the disappointing coverage of the five-year auction weighs heavily. The sales of Oat instead continue despite the slight relegation of Marine Le Pen in the polls for the first round at the Elysée.
9 BILLION BTP FROM 3 TO 30 YEARS AT AUCTION ON MONDAY
On the occasion of the medium and long-term offer on Monday 13 March, the Ministry of the Economy will make available to investors between 7,25 and 9 billion euros of three-, seven- and 15-year BTPs, together with a thirty-year no longer being issued.
Foreign investors have been awarded around 65% of the new 10-year Btpei in May 2028 placed by the Italian Treasury for almost 6,4 billion euros through a syndicate of banks.
MEDIOBANCA AND KEPLER PROMOTE GENERALI
At Piazza Affari, Generali stood out (+1,7%). Mediobanca Securities confirmed the outperform recommendation, and Kepler Cheuvreux the buy rating and the target price at 15,5 euro.
In the same sector, the +2% of Unipol stands out. Among the banks, Mediobanca +1%, Bper Banca +0,2%, Banco Bpm +0,2%, Ubi +0,5%,
Unicredit -0,3% and Intesa +0,2%. In asset management Fineco +0,5%, Poste Italiane +0,4%.
NIEL (ILIAD) PUTS TELECOM UNDER PRESSURE
Under pressure Telecom Italia (-0,8%). The market is already discounting the landing of the French operator Iliad in Italy. The group will come with its priced-down mobile offerings towards the end of 2017 with plenty of ambition. “Italian consumers – says its patron Xavier Niel – are mistreated. You pay 10% more than French consumers”. The group counts on being profitable well before having a 10% market share and could also land in the fixed sector and for this reason it already has discussions "with Enel and others", as well as talks with antenna operators.
Fiat Chrysler rose by 0,6%, to 10,52 euros, despite the denials of Volkswagen's interest in the group. "We have other concerns about a merger," said the German giant's chief executive Matthias Mueller. The statements come in response to the scenario outlined at the Geneva Motor Show by Sergio Maechionne: "Volkswagen is the group that will suffer the greatest impact from the Opel-Peugeot merger and therefore could consider it rational to start talks for a merger with Fiat Chrysler".
THE JUVENTUS TITLE FLYS +10,6%: THE MARKET DREAMS OF DEL PIERO
Among the mid and small caps, a leap of Rcs +5,8%, Technogym +3,8%. In the spotlight the Juventus stock +10,6%. The sudden shower of purchases must be connected to the rumors about a possible step back by the president Andrea Agnelli, involved in the federal investigation into relations with criminal circles for the management of tickets. Hence a sensational indiscretion: Alessandro Del Piero could be co-opted at the top of the club.
