For the first time in 2016, oil closed the day on Wall Street with a positive sign. US stocks rebound, starting with the S&P 500 index, which is back above 1.900. But the tribulations of the financial markets are not over: they come under fire on the Black Thursday of the automotive Fiat Chrysler and Renault, the two leading stocks of the sector in 2015.
The second week of 2016, a truly leap year, is thus starting to close in a climate of great uncertainty, even if the recovery on Wall Street, triggered by the rally in the middle of the day, bodes well. The Jones index closed the session up 1,41%, the S&P +1,67% to 1921,84 points. The Nasdaq is also recovering (+1,97%).
JP MORGAN BEATS ESTIMATES. GOLDMAN PAYS 5,1 BILLION FOR ABS
The rally was driven by several factors:
1) The excellent quarterly report by JP Morgan (+3%). The main US bank achieved a net result of 5,43 billion dollars (+10,2%). Earnings per share was $1,32, analysts had expected $1,25. Revenues were also above expectations, amounting to 23,7 billion dollars against estimates of 22,89 billion. Jamie Dimon's bank also added $136 million to reserves, a move linked to worsening debtor conditions in the energy sector.
2) The surge in oil prices: Wti +3% to 31 dollars, Brent +41% to 1,5 dollars. On the wave of these progresses, the oil sector advanced by 30,77%, Exxon and Chevron +4,5%.
3) "It would be difficult to justify further rate hikes after the fall in oil prices." Thus James Bullard, president of the Saint Louis Fed, confirmed the soft strategy of the central bank.
4) On the corporate front, Intel's results are better than estimates. But the Californian chip giant presented weak projections for 2016, especially for PC sales. The stock thus fell by 3,8% after the Stock Exchange.
5) Goldman Sachs to pay $5,1 billion to state to settle litigation related to ABS sales before the 2007/08 crisis. The fine will absorb a large portion of the quarter's profits.
ASIA WEAK: SHANGAI IN 2016 LOSES 16%
On the other hand, the Asian stock exchanges are starting to close the week in the red. Weak Tokyo -0,2% at mid-session. Hong Kong (-0,8%), Shanghai (-1,5%) and Shenzhen (-0,9%) are also in negative territory. Since the beginning of 2016, despite massive public interventions, Shanghai has lost 16,1%, Shenzhen 20,2%. Heavy drops also occurred in Hong Kong (-10,3%), Tokyo (-9,1%) and Singapore (-8,3%).
Meteoborsa signals a moderate upturn for the European markets: London +14 points to 5932; Paris +17 bps to 4,330, Frankfurt +21 bps to 9.815.
THE EUROPEAN PRICE LISTS HAPPEN, ENI IN MILAN
European markets ended a session of violent swings lower, especially for automotive stocks. In Milan, the Ftse Mib index lost 1,7% to 19.803 points. During the day, it hit a low of 19.576 points (the lowest level in 12 months) and a peak of 19.995 points. Same loss in Frankfurt, which recovered part of the lost ground from the lows (-3%) and for Paris. London -0,72%.
The Oil & Gas sector took care of the price lists in the final: +1,9% at the end against a loss of 2% in the morning. Eni closed at +1,48 at 13,01 euros, moving away from this morning's low of 12,61 euros. Ubs intervened on the stock, lowering the target price to 15,50 euros from 17 euros, confirming the Buy recommendation.
On the secondary market, the spread between BTPs and German Bunds widened to 110 basis points, the highest since 3 December, when the market was disappointed by the ECB's failure to increase QE. Yesterday the minutes of that meeting confirmed the possibility of expanding purchases in the future. The session was influenced by the expansion of the Spanish union responsible for managing the issue of a new ten-year bond.
FCA: “SALES RIGGED IN THE USA? IT'S FALSE!"
A day to forget for Fiat Chrysler (-7,97% closing at 6,84 euros). During the session, the stock, suspended due to excessive downtrend, reached a minimum of 6,60 euros. The collapse was triggered by an Automotive News service which shows that two Chicago-area dealerships accuse the company of inducing them to inflate sales figures.
In the afternoon, a note from the group replied, claiming that the lawsuit brought by the dealer's internal lawyer was unfounded. If anything, FCA exerted pressure with the concessionaire's group to ensure that the latter complied with its commitments on the basis of certain contractual clauses.
IN 2016 SCUDERIA AGNELLI BURNED 5,33 BILLION
In the meantime, however, the Agnelli group is facing a thrilling start to the year. Yesterday Exor dropped 7,5%, Ferrari 4,6%. During the session, the three stocks burned 1,77 billion of capitalization, to which must be added the 150 million left on the ground by CNH Industrial. Adding the 150 million Cnh as well, the loss approaches 2 billion.
In the first two weeks of the year, the shares of the Agnelli team lost 5,33 billion in capitalization. After running for a long time also on the push of the Ferrari spin-off and a potential merger with GM, now FCA and Exor have therefore retraced, burning last year's earnings in just a few sessions.
THE SHADOW OF THE DIESELGATE ASPHALT RENAULT (-10%)
However, on Black Thursday of the car, the most violent impact was that of Renault (-10%, after having dropped to -20%). The sales were triggered by the news, released by France Presse, of investigations by the French authorities on the house for possible infringements of the rules on the presence of nitrogen oxides in the exhaust gases of their cars. During the day, however, it emerged that the searches that took place last week did not find evidence of the hypothesis that there had been alterations or forgeries.
In the evening, the French Economy Minister further downsized the scope of the news, stating that the checks carried out are part of normal routine procedures. But the day ended with a loss of value on the Stock Exchange of over 2,3 billion.
The consequences on the rest of the sector are also serious: the index of automotive companies loses 3%, Peugeot (-4%), Daimler (-3%).
RISIKO AND BAD BANK, CREDIT UNDER PRESSURE
Risiko among the Popular and maneuvers on the Bad Bank keep the attention on the banking sector. Thanks to the rumors about the steps forward in the negotiations that should lead to mergers, Banca Popolare di Milano (+1,8%) and Banca Popolare dell'Emilia Romagna (+2%) also rose. Ubi Banca, on the other hand, falls (-3,2%).
The Bigs are holding back: Intesa-2,3%, Unicredit -2,7%. Monte Paschi is up (+2%). Remote negotiations continue with Brussels to launch the longed-for band Bank. The Treasury's latest plan provides that anomalous loans are transferred to private vehicles and that banks have the possibility to buy a public guarantee at market conditions.
Meanwhile Mirko Sanna, associate finance director of institutions at Standard & Poor's said he expected that the stock of bad loans burdening Italian banks will continue to grow in the first part of 2016 and then stabilize, but a significant reduction, in his view is unlikely without external interventions.
All stocks in the asset management sector are paying for the financial market crisis: Azimut -3%, Banca Mediolanum -3,2%, Banca Generali -2,08%. Anima (-2,09%) also suffers from the disappointing data of December inflows, equal to 243 million euros, of which 133 million in funds. In November it had reached 540 million.
Black day for Finmeccanica -4,5%. On the contrary, Rcs shines (+6,1%).
