The abyss moves away, the stock exchanges can celebrate. Tonight, or rather at six in the morning in Italy, after a heart-pounding session of the Republican leaders, the House of Representatives (with a Republican majority) ratified the agreement signed in the Senate: 257 yes against 167 no. Against the agreement, 151 MPs from the Grand Old Party voted against, disobeying speaker John Boehmer, including group leader Ed Cantor. The battle over the consolidation of US public finances is far from over. But for now the stock exchanges are breathing.
The first market to react, after the Senate vote, was the Indian Sensex +0,8%, which celebrated the agreement with a 0.8% increase that brings the Indian Stock Exchange to its highest level since April 25, 2011.
The positive intonation was confirmed in the first session of 2013 in the other Asian Stock Exchanges: Tokyo climbs +0,70%, already rallying, the other Pacific stock exchanges explode. The Hong Kong Stock Exchange scores an increase of more than 2%, the MSCI Asai Pacific index (which does not include Japan) rises by 1,5%.
After all, already in New Year's Eve, Wall Street had sensed that the solution was one step away: S&P closed the year with an increase of 1,7%, Dow Jones +1,3%, Nasdaq +2%. In 21012, the S&P index gained 13 percent. It was the biggest year-end rally since 1974.
There are therefore the conditions for a flying start of the European price lists, after the positive conclusion of 2012.
After two years of heavy losses, 2012 saw the Milan Stock Exchange return to a positive performance. The FtseMib index closed the year with an increase of 7,8% which barely soothes the pains of 2011 (-25%) and 2010 (-13,2%). The index stands today at 16.273 points, after having reached a maximum of 17.133 points on March 19th and a minimum of 12.362 on July 24th.
On a continental level, among the other main European stock exchanges, the Frankfurt stock exchanges did better than Piazza Affari, with the Dax which scored +24,15% and Paris (Cac40 +14,03%). Worse than Milan were London (Ftse 100 +4,46%) and Madrid (Ibex35 -5,08%).
The best result among the Stoxx 600 stocks was Sky Deutschland: +300%, the worst was Spanish Bankia -89%, now excluded from the Madrid Stock Exchange
ASIA
The devaluation of the yen, which is in favor of the industrialists, contributes significantly to supporting the rally in Tokyo. Including Carlos Ghosn, CEO of both Renault and Nissan. “We are far from a situation of neutrality – he declared in Tokyo – The right ratio would be 100 yen for one dollar”, ie there is room for a further drop from the current level of 87 yen.
Other positive news: for the third consecutive month, the Chinese index of manufacturing companies closes higher, confirming that the economy has started to recover; Singapore recorded a year-on-year GDP growth of 1,8% in the last quarter of the year: there is no feared fall into recession.
The OPEC countries (responsible for about 40% of world production) achieved a new record in 2102: for the first time the total turnover exceeded the threshold of one trillion dollars (1.050 to be precise) on 2,5 % more than a year ago. Even taking inflation into account, this year's record remains the same, surpassing the peaks recorded during the great energy crises of 1973-74 and 1979-81.
AMERICA
The long night of the US Congress is destined to enter the Guinness Book of Records. At ten in the evening in Washington, 4 in the morning in Italy, the Democrats presented their ultimatum: take it or leave it, because the Senate would not accept any changes to the text already approved on December 31st. At that point the Republicans know they are split. The majority, or 151 congressmen, chose no. But a sizeable section of the party has avoided challenging the president, who has already announced that he will sign the law.
But what does the provision say?
The agreement approved in the early hours of 2013 to avoid the fiscal cliff includes: an extension of income tax cuts for individuals who earn less than $400 a year, and for couples who earn less than $450; for those with a higher income, the tax rate passes from the current 35% to 39,6%. They also increase the inheritance tax from 35% to 40% and that on capital gains and dividends, for incomes above $400.
Instead, the minimum tax is maintained for almost 30 million middle-class citizens with tax savings of an average of 3.000 dollars and the benefits linked to unemployment benefits are extended for those who have been out of work for at least a year. A two-month delay was agreed for the cuts in public spending. There will still be a battle on this front. Without forgetting that the agreement, before becoming effective, will have to be approved by the House of Representatives, with a Republican majority.
The agreement on the fiscal cliff allows Wall Street to review its operating strategies. The weekly Barron's claims that the Apple stock, down 30 percent from its September highs, is now a great buying opportunity. Many of the sales were prompted by uncertainty over the taxation of capital gains coupled with concerns about lower-than-expected sales of the iPhone 5, yet to be proven.
ITALY
Spotlights on Atlantia and, above all, on Auto To-Mi after the end-of-year decrees suspended the tariff increases relating to four concessions (Brescia-Verona-Vicenza-Padova, Satap A4, Satap A21 and Sat), while they authorized lower increases than those requested for the other three sections (Autostrade per l'Italia, Ativa and Milan-Serravalle). In particular, the Gavio group is affected, but there are also problems for the Benetton company, already focused on the possible merger between Gemina and Atlantia itself.
On Friday, the Treasury positively closed the first Btp auction of the program funding for 2013. 5,8 billion 5- and 10-year bonds were placed with yields virtually unchanged from previous auctions. The intentions were to sell BTPs for an amount between 4 and 6 billion. In detail, the 5-year bonds were placed at a yield of 3,26% (3,23% at the auction at the end of November) and the 10-year bonds at 4,48% from 4,45%.
On the secondary market, the 10-year BTP closed with a slight improvement with a yield of 4,48% (from 4,50% yesterday) and a spread of 317 (- basis points).
The year ended on Friday in Piazza Affari with a negative session for the banks: Unicredit fell by 1%, Understanding-0,9% Banco Popular -0,5% Ubi -0,5%. Alone MontePaschi it closed with a gain of 0,6%.
Weak insurance: Generali -0,5% Unipol unchanged. Among the industrialists Fiat fell by 1%, Finmeccanica-0,4%. Widespread discounts among utilities: Enel -1,8% A2A -0,3%. Telecom Italy fell by 0,6%. Sharp decline of Mediase which lost 2%. A few positive headlines: Rest + 0,06% Luxottica +0,3% and Campari + 0,2%.
THE BUDGET
Let's do the math before the start.
A) 2012 closed with 323 listed companies, down from 328 last year. In the usual Borsa Italiana review, it should be noted that there were seven new admissions in 2012, of which six were IPOs (Initial public offering). Of these, however, only that of Brunello Cucinelli it concerned the main market MTA, the others were on Aim Italia and on the Mac. There were nine IPOs in 2011 and ten in 2010. There were 13 companies revoked during the last twelve months.
B) Unicredit the most traded palm during the year. The action of the Piazza Cordusio institute was in fact the most traded both in terms of value, with a total of 89,9 billion euros, and in terms of contracts (6,7 million).
C) Azimut queen of Piazza Affari in 2012 in terms of performance among the stocks with the largest capitalization, bringing up the rear for A2A which records the worst performance. The asset management company, according to data released today by Borsa Italiana at the close of the markets, recorded 2012% growth in 78,5, followed by Salvatore Ferragamo which grew by 66,3%. Last place, however, for the Lombard super-utility which leaves 40,8% on the ground. Mediaset and Telecom follow with a drop of 26,1% (-17,2%).
D) the Mot, the bond and government securities market managed by Borsa Italiana, recorded its new all-time high in 2012 for the number of contracts traded (6,3 million, +36,4% on 2011), equal to 320,2 billion euros (+57,1% on 2011).
E) The last of the three Btp Italia auctions, that of 18 October, recorded the new absolute record for trades in a single session on the Borsa Italiana bond markets with 90.049 contracts and for countervalue with over 9,6 billion euros . It was the largest bond issue in Europe, with over 18 billion raised in four days of subscriptions.
