A ghost is haunting the Swiss Alps. It is the spirit of the global economy, never so undermined since the end of the millennium, when the doors of the markets were thrown open. Unfortunately at the time none of the powerful who participated in the meetings in Davos, the chosen land of the global economy, foresaw the impoverishment of the middle classes under the pressure of the Chinese competition or the biblical migrations of these years which so frighten Western voters . And so the meeting in Davos opens today under the banner of concerns: Great Britain today launches the challenge of a hard Brexit; Donald Trump goes on the attack on the EU, already under pressure for the upcoming electoral challenges.
In this situation, the signs of Italy's fragility are multiplying: after the downgrading of the rating, the downward estimates of the Monetary Fund and the prospect of a maneuver encore which falls on the eve of the plan for the recovery of Monte Paschi. Finally, to damage Piazza Affari, the rain of sales on Fiat Chrysler. Luckily there is Luxottica. For now, because within the year the world capital of eyewear will move to Paris.
NERVE BAGS IN ASIA. THE YEN RISES, TOKYO DOWNS
Today the US price lists reopen. Meteo Borsa provides a session of high intensity. The expectation of the speech that the British Prime Minister Theresa May will give this morning weighs on the currency markets in Asia. The pound has recovered a few positions from its lows (1,2050 against a low of 1,1983 against the dollar) but continues to influence the rise of the yen, the safe haven currency par excellence. As a result, the Tokyo Stock Exchange ( Topix index -1,3%) was weak. Australia also down (-0,9%).
Futures on the S&P 500 index also fell (-0,3%). Yesterday the US stock exchanges were closed for the recurrence of Martin Luther King Day.
OIL CONTRASTED: THUD OF SAIPEM
The trend of the oil market was contrasted this morning: a slight drop for Brent to 55,72 dollars, a moderate rise in Wti to 52,45 dollars. "I am very satisfied - Saudi Energy Minister Al Faih said yesterday evening - for compliance with the agreements on production cuts".
Another sharp drop yesterday in Piazza Affari for Saipem: -4,3%, to 0,49 euro, a price it hasn't seen since December 22nd. The intervention of the Australian broker Macquarie weighed on the title, cutting the recommendation to Underperform from Neutral, while the target price was set at 0,45 euro. Eni and Tenaris drop by 1,7%.
THE BLACK JERSEY IN MILAN, AND THE EU PRESENTS THE BILL
The expectation for today's speech by British Prime Minister Theresa May, who should illustrate a "hard" exit plan from the European Union, also weighs on European price lists. The prime minister should announce that the government's priorities are immigration control, emancipation from the European Court of Justice and exit from the customs union. The impact of Donald Trump's words on NATO and the European Union is also heavy. Investor focus will also turn to the January Zew Index which will be released at 11am.
Milan closed yesterday at 19.247 points, down 1,37%, marking the sharpest decline among the main stock exchanges of the Old Continent: Paris (-0,7%), Frankfurt (-0,5%). London also down (-0,1%) after 14 positive sessions. The pound is down, but has recovered from the lows of the morning: the exchange rate with the euro is 0,8802 (-0,8%). In a week's time, on January 24, the Supreme Court will say whether the government can invoke Article 50 of the Treaty of Lisbon without first consulting Parliament.
The European Commission has complained to Italy that the 2017 budget risks not complying with the Stability and Growth Pact, while from Rome they let it be known that negotiations are underway to avoid a possible infringement procedure due to the high public debt . According to rumors, the EU Commission has asked for a corrective maneuver on the structural deficit - calculated net of the cycle and one-offs - of 0,2 percentage points of GDP, or 3-4 billion.
MONETARY FUND DOWN ESTIMATE FOR ITALY
The International Monetary Fund has revised downwards the estimate of the Italian GDP for this year. This is what emerges from the update to the World Economic Outlook, which cut the projection for growth of the Italian economy in 0,7 to 0,9% from 2017% indicated in October and to 0,8% (against +1,1% previous) in 2018.
Opposite indications for global growth: the IMF confirmed its forecasts for the current year at +3,4% and +3,6% for next year and improved the estimate for the Eurozone by a tenth of a point for 2017 at 1,6%.
HOLDING THE SPREAD: THE 1,91 YEAR AT XNUMX%
In the secondary market, Italian debt narrowed the decline at the close, limiting the damage after Italy's downgrade by DBRS. The yield differential between the BTP and the Bund on the 10-year stretch stands at 166 basis points from 164 at the end of Friday's session. The 1,91-year rate rises to 1,90% from XNUMX% at the last close.
In addition to the risk of a corrective maneuver, the rumors on the possibility that the Treasury will soon launch a new 15-year BTP through a syndicate weighed on the session.
THE MARKET PROMOTES SUPER LUXOTTICA
On a gray day, Luxottica's star shines (+8,2%), illuminated by the surprise wedding of the world leader in eyeglass frames with the French company Essilor (+11,8%) which is in turn the world leader in lenses. The transaction provides for the French company to launch an offer on the shares of the Italian group based on an exchange ratio of 0,461 Essilor shares for each Luxottica share.
Leonardo Del Vecchio's Delfin will control between 31 and 36% of the new entity, world leader. The second shareholder, i.e. the employees of Essilor, will have approximately 4%. The title will be delisted from Milan and will be treated in Paris. The company will have combined revenues of more than $15 billion, more than 140.000 employees, and a presence in more than 150 countries.
According to the Equita Sim experts, the exchange rate in the transaction is "fair" and the synergies are significant. The exchange rate, the analysts specify, is slightly more favorable to the French shareholder, but offset by strong synergies. Finally, Equita does not rule out antitrust problems, the main risk element in the deal.
Kepler Cheuvreux also highlights possible critical issues on the antitrust front, but still promotes the deal by raising the recommendation on Luxottica from a veteran to a buy with a target price that has gone from 44 euros to 56 euros. Safilo (+3,7%) is also moving in response to the Luxottica-Essilor deal.
CAR, TRUMP ATTACKS THE GERMANS. BERLIN TARGETS FCA
Another difficult day for the automotive sector: the Stoxx index for the sector fell by 1,3% on the wave of statements by Donald Trump, who threatened 35% tariffs on German cars imported into the USA. Daimler and Volkswagen lose 2,1%. BMW -1,5%.
Germany vents its anger on Fiat Chrysler (-4,1%): German Transport Minister Alexander Dobrindt has asked the European Union to recall three models of the group: Fiat 500 X, Doblò and Jeep Renegade. Minister Graziano Del Rio retorted that "there are no illegal devices on the group's cars". Great Britain has made an urgent request for information to the US agency for environmental protection (EPA).
According to Fitch, the disputes by the US environmental protection agency, which has targeted the emissions of some car models produced by FCA, could, if they prove to be founded, put pressure on the group's rating.
Difficult day also for Exor (-4,9%) still under pressure together with the subsidiary. Equita revised the target price upwards to 45 euros from 39 euros, leaving the Hold judgment unchanged.
DB CUTS GENERALI'S RATING
Weak banks, under pressure from the downgrading of Dbrs. Unicredit fell by 1,9%, Intesa -1,8%, Banco Bpm -2,5%. An investigation by the judiciary is underway into the institute for the hypothesis of a crime of insider trading on alleged possible omissions in the communication to the market of data on the coverage of non-performing loans.
Generali lost 2,2%, downgraded to Sell by Deutsche Bank (target price at 13,3 from 13,8 euros). Unipol-1,9%.
MEDIOBANCA PROMOTES AMPLIFON
Cementir slides (-6,90%): Kepler Chevreux cut the rating to 'hold' in anticipation of pressure on the stock also due to the exchange rate effect in Egypt and Turkey.
Amplifon +1,01% thanks to the promotion of Mediobanca Securities (outperform, target 1,04). The new law on the introduction of tax credits for hearing aids presented in the US Senate and the new essential levels of assistance in Italy play in favor of the title.
