The oil boom (+10% after the OPEC agreement) has given oxygen to the lists, driven by energy and financials, stimulated by the prospect of rate hikes. But in the end of the session Wall Street was concerned about the consequences of the rate hike on utilities, telecoms and, in general, on the sectors most dependent on debt. The Eurozone is experiencing other problems: the rebound in crude oil and confidence in Mario Draghi's umbrella have for now removed the shadow of the referendum, ready to re-emerge this morning.
The feeling is that the Stock Exchanges are about to experience an "epochal" relay (a term abused to tell the truth). The agreement between producers on crude oil demonstrates a willingness to get out of the low-cost oil season, a harbinger of low rates. Unlike the USA in the past, self-sufficient in terms of energy, they seem oriented towards exploiting the trend to reflate the economy. Europe, crippled by its many contradictions (starting from the Italian banking crisis) seems on the contrary condemned to the low cost of money.
GOLDEN NOVEMBER FOR USA, EUROPE IN GREY
In November, marked by the election of Donald Trump, the mix produced this result: the S&P500 index closed the month with a rise of 3,8%, Dow Jones +5,7%, Nasdaq +2,6%. The Russell 2000, the small business index, rose 11%, to a five-year high. A march accompanied by the strengthening of the dollar, which rose against the euro to 1,057 with a monthly gain of 3,6%. Asia has adapted to the march of the dollar: aided by the devaluation of the yen against the dollar, the Tokyo Stock Exchange has achieved a record monthly rise of 5%. The Shanghai Stock Exchange is up 6%.
The Eurozone is much grayer: +0,1% of the EuroStoxx 50. Paris rose by 1,7%, Frankfurt closed the month in substantial parity. The most negative performance was that of Piazza Affari (-1,1%), held back by the referendum syndrome which was also felt on the BTPs, which went from a yield of 1,66% to 1,96%.
The oil boom is only the latest episode in the recovery of raw materials, following the recovery of economies and reflation: copper rose by 20% in the month.
OPEC CUTS, CRUDE LUMPS BY 10%
Above all, the impact of the great peace of oil dominates the moods of the Meteo Borsa. The members of OPEC, the cartel that accounts for about a third of the world's new gold supply, yesterday signed an agreement in Vienna to reduce their production by 1,2 million barrels a day. Starting from January, according to what was announced yesterday by the current president, the Emir of Qatar, the new ceiling of 32,5 million barrels should go into effect (a conditional requirement because several details are missing) against the 33,64 of Today. Just under half of the cuts (500 barrels) will be borne by Saudi Arabia, while Iran is satisfied with 3,8 million barrels a day and Iraq with 4,351 million. On 9 December in Doha, the agreement will be extended to non-OPEC countries, Russia in the lead: Moscow will reduce production by 300 barrels.
The news immediately set financial markets on fire. The prices of black gold shot up by 8,82% to 50,47 dollars in the Brent version. The WTI advanced by 9,6% to 49,44 dollars. The energy index is on the rise (+4,8%). Among the oil stocks, Exxon Mobil +1,7%, Chevron +2%, the oil equipment Schlumberger +5,16%. Even better Anadarko (+14,6%) and Hess (+14,2%).
In Piazza Affari the session closed before the official announcement of the agreement. Probable, therefore, that today the rally will continue. Yesterday Eni was up 3,7%, Saipem +9,6%, the best blue chip of the day, not only due to the Vienna agreement. Gazprom is beginning to seriously consider the risk of having to pay the Italian group the compensation requested for the cancellation of the South Stream project. The Russian giant has written down the project by 800 million euros, a figure close to the 760 million initially requested by Saipem. The next appointment before the Paris arbitration court is scheduled for March 3, 2017. Tenaris +6,5%. The rally continues this morning in Asia: Brent is traded at 52,31 dollars.
JAPAN RISES, TLC AND UTILITIES SUFFER IN THE USA
The rush of crude oil has dominated the attention of stock markets. Robust rise for Japanese stock markets, also stimulated by the drop in the yen and by the positive data on the recovery of the industrial sector. The Topix index opens December with growth of 1,9%, the Nikkei rises by 1,1%. The Chinese recovery is also picking up speed, certified by the rise in the PMI indices. Shanghai rises by 0,7%, Hong Kong +0,9%.
On the other hand, the performance of the US Stock Exchanges contrasted: the Dow Jones flat +0,01%, S&P 500 down by 0,27%. The decline in the Nasdaq -1,06% was more marked. The drop in telecommunications and utilities, the sectors most sensitive to dividends and interest rate trends, conditioned the lists: the S&P utility index fell by 3,2%, the AT&T share -2,2%. Tech stocks are also not participating in the rally. Apple -0,5%, Amazon -0,6%, Facebook -0,8%.
TREASURY: TRUMP WILL CUT TAXES BY 15%
Banks and financial companies are flying. Steven Mnuchin, who has just been nominated by Donald Trump for the position of secretary of the Treasury, has revealed that cutting corporate taxes to 15% is among the priorities on the president's agenda. Wilbur Ross, the incoming commerce secretary, said Janet Yellen "did a good job". Bank of America climbed 4,5%. Goldman Sachs +3,6% to 220,77 dollars, the highest since the days of the subprime crisis.
MILAN, THE BEST. THE TREASURE IS THE CENTER OF THE 2016 COLLECTION
The official news of the oil deal came just minutes before the European stock exchanges closed. But since the morning, the markets have bet on the rise in crude oil, shelving (or almost) the stress for the December 4 referendum. Milan was the best market, re-tasting the threshold of 17.000 points at 16.930 thanks to an increase of 2,23%; after Monday's sharp fall, prices are already discounting a large part of the effects of a no victory. The rebound of the other Stock Exchanges was more limited: Paris +0,68%, Frankfurt +0,12%, London +0,2% and Madrid +0,16%.
The Btp/Bund spread also contracted, closing at 171,318 basis points. With yesterday's reopening, the Treasury has fully achieved its refinancing target for 2016. The mid-month Bot auctions, the last to be settled in the current year, will be added to the total amount.
BANKS (+3,1%) ARCHIVE BLACK NOVEMBER
New recovery day for Italian banks. The sector index marked a rise of 3,1%. The sector has left behind the "horrible November": MontePaschi -14%, Banco Popolare -26%, Ubi -15%, Unicredit -11%, Pop.Emilia -10%.
Returning to yesterday's changes, Unicredit was leading the race, closing up 4,23% on the wave of news on the formation of the consortium for the capital increase in February. Banco Popolare +4,3% and Bpm +4,48% did even better. Slightly behind Intesa, which finished up 2,85%.
Monte Paschi makes history in itself: +5,68% after the double-digit gains on the eve. Yesterday the BoD took stock of the conversion of bonds: after the adhesion of Generali (400 million) the minimum target of conversion into shares of 1,04 billion is within reach. The forecast is now 1,5 billion. In terms of new potential shareholders, pending Qatar, the intervention of another four to five leading investment funds is looming, including BlackRock and Paulson, willing to put into the basket between 150-200 million each.
Banca Ifis stands out among the small caps (+3,33%). The institute has completed the acquisition of Ge Capital Interbanca for 160 million euro to which must be added the full repayment of the debt which amounts to 2,1 billion. The CEO Giovanni Bossi said that the bank will draw up the new strategic plan within the first quarter of 2017 and, thanks to the acquisition of Ge Capital, he thinks he can enter the corporate npl market.
FCA TITLE LEADER OF THE MONTH. MONDADORI AMONG THE STARS
Enel +0.6% has won the tender for the purchase of Celg-D, the Brazilian public electricity distribution company that the government has decided to privatize. The hammer price is 2,18 billion real, equal to about 640 million US dollars.
Fiat Chrysler +1,11%. Fitch has revised upwards the outlook on debt from stable to positive, confirming the rating at BB-. The revision reflects the agency's projections of an improvement in cash generation in the near future, which, if confirmed, could lead to an upgrade. During November, Fiat Chrysler rose by 9%, surpassed only by StM (+9,8%).
Sale Mondadori (+2,65%): from 7 December the title will enter the Star segment. Among the smaller capitalization stocks, Falck Renewables gained 9,72% the day after the presentation of the strategic plan. Kepler-Cheuvreux rewarded the stock by confirming the Buy rating. Target price raised by 20% to 1,10 euro from 0,90 euro.
Chief Executive Officer Toni Volpe announced that the coupon for the next distribution will be 4,9 cents which corresponds to a dividend yield close to 7%. For the period 2018-20, the same dividend will grow by 8,5% per year up to a maximum of 6,3 cents, equal to a yield of 8,3%.
