After ten years of growth, the US economy is officially in recession. And the Federal Reserve warns that no one is deluded that the economy can restart soon. But Jerome Powell reassured him about maintaining zero rates and the other measures already adopted and promised other interventions, should the situation worsen in May. Meanwhile, the ECB is ready to act today to avert the default risk of the BTPs. This is the context in which one of the most vigorous rises ever in the stock markets matured, canceling everywhere the falls suffered from March onwards.
But what happened? The reasons are more than one, but above all the judgment of the most respected man in America stands out: Anthony Fauci, the virologist that Donald Trump wants to fire. The scientist yesterday promoted the results of tests on remdesivir, the Gilead drug tested on patients affected by the coronavirus, as "good news". The stock market, now vaccinated against Donald Trump's scoop, trusts the opinion of the scientist, so far very cautious in matters of therapies and vaccines, just as it appreciated the words of the president of the Fed, who also underlined that things are destined to worsen in the short term and that it will be possible to speak of a full recovery only next year. A bath of realism, in short, while awaiting the moves of the ECB.
TOKYO BOOM, CHINESE INDUSTRY AT FULL RUN
Asian stock markets adjusted to general optimism this morning. In Tokyo, closed yesterday, the Nikkei advanced by 2,5%. Shanghai (+1,7%), Sidney (+2,2%) and the Taiex of Taipei (+2,1%) also rose. In Hong Kong and Seoul people don't work because it's a holiday.
Data on the Chinese manufacturing industry were released tonight, returning in April to more or less the levels prior to the explosion of infections in Wuhan. However, the same does not apply to consumption and exports.
IT'S WALL STREET'S BEST MONTH SINCE 1975
US markets rose sharply yesterday at the end of a field day. The Dow Jones rose by 2,21%, the S&P 500 even better: +2,66%. Triumphant final for the Nasdaq, up 3,57%. April could be the best month on the US stock market for 45 years.
GOLD ACCOUNTS FOR FACEBOOK AND TESLA
In addition to the earnings of Gilead Sciences (+6,57%), the home of remdesivir, the rally was supported by the results and prospects of the big names in the digital economy. Together with Alphabet (+8%), the shares of Facebook (+10% after the Stock Exchange) went into orbit. Tesla is also in great turmoil (Elon Musk called the governor of California a fascist who prevents the recovery of activity) and Microsoft, both on the rise after the Stock Exchange. In particular, according to Facebook's quarterly, social media has seen an 11% increase in traffic since January.
TOWARDS 30 MILLION US UNEMPLOYED
In this context, the decline in the US gross domestic product, which fell by 4,8% in the first quarter, negative for the first time since 2014, was absorbed without damage. It is the worst fall for the American economy since the crisis in 2008. Today the US government will release new data on applications for unemployment benefits: according to analysts, the number of applicants will rise to 30 million.
NORWAY CUTS, OIL ON THE RISE
Brent oil rose this morning: +9% to 24,7 dollars, from +10% yesterday. Norway tonight announced a historic production cut, the first in 18 years. The reduction, starting from June, will be 250 barrels per day, 13% of the current value. Norway contributes about 2% of the world's oil supply: in April, experts calculate that demand shrank by about 20 million barrels a day, roughly 20% below 2019 levels.
THE ECB SPEAKS TODAY: PEPP INCREASE EXPECTED
On the day of the official start of the US recession and the downgrade of the Italian rating, the European stock exchanges also took flight. Eurostat will today release data on the trend in the first quarter of GDP and unemployment in the Eurozone.
Meanwhile, yesterday the ESI index, which measures sentiment in the Eurozone by assessing various confidence indicators, fell sharply in April. The drop of almost 29 points is the worst ever recorded since 1985, and brings the parameter "very close to the levels of the 2009 recession", underlined the Commission.
In this context, the markets await the decisions of the ECB. The ECB's executive committee will meet at 10: a new expansion of the scope of the PEPP, the emergency bond purchase programme, could be at the door
FITCH DOESN'T STOP THE BULL'S CHARGE. MILAN +2,2%
Piazza Affari achieved a rise of 2,21% to 18.067, to new highs compared to mid-March.
THE CAR SPEEDS UP: DAIMLER +6,7%, STATE MONEY FOR RENAULT
The other price lists show a decisive rally: Frankfurt is up 2,67%, despite the gloomy forecasts of the economic institute Diw, which estimates a fall in GDP in the order of 2020% for 6. Car stocks set the tone: Daimler +6,68%, Volkswagen +5,79%.
Paris also shines (+2,22%). The European Commission has given the green light to a French state guarantee on 5 billion euros of loans to the Renault car group (+7,9%) to mitigate the impact of the coronavirus crisis.
Madrid also advances (+3,17%): Banco de Santander gains 4,87%.
London +2,7% thanks also to the surge in Barclays and Standard Chartered, despite the additional billion-dollar provisions aimed at covering potential credit losses due to the coronavirus epidemic.
TREASURE AUCTION OK, THE LOYALTY AWARD FOR BTP ITALIA RISES
Today's Treasury auctions went very well, especially when you take into account the unexpected cut of the Italian debt rating by Fitch. The Treasury had no problems in achieving the objective of the operation, equal to six billion euros. For all three titles on offer, demand has been very strong. The 1,78-year bonds were awarded at a rate of 228%. The increase in the spread was also modest, to XNUMX basis points.
The Treasury emissions factory, which has already collected over 30% of the 2020 requirement, does not stop. The Btp Italia on offer to the retail public from 18 to 21 May is already taking shape. The issue provides for a maturity of five years for the first time and a loyalty bonus of 8 per thousand (double compared to previous issues) for those who buy the security at issuance and hold it until maturity, in 2025.
OIL FLYING, UTILITIES STAYING ON THE GROUND
The great rebound of oil prices was also broadcast in Piazza Affari. Tenaris (+5,85%) leads the race ahead of Saipem (+5,56%) and Eni (+3,27%). Saras also flies (+11,68%): the slowdown in prices benefits the refining companies.
Although the crisis is more violent than ever, the appetite for risk is back. Managers are thus changing investment themes: utilities, the defensive sector par excellence, are slowing down, cyclical stocks are being reviewed. Among the few stocks in the red are Hera (-0,54%) and A2A (-0,2%). At the head of the main basket Buzzi Unicem (+6,3%).
FROM LEONARDO TO PRYSMIAN THE INDUSTRY STARTS AGAIN
The other industrialists also shine: Leonardo +5,43% on which Fidentis has brought the recommendation to Buy from Hold.
Prysmian advances (+1,89%): factories in China are at full capacity, says CEO Valerio Battista in an interview with Sole24Ore. The number one cable manufacturer says all the orders received have been confirmed, other orders should arrive during the year, in particular from Germany. The financial structure, adds the manager, is solid and there are no liquidity problems.
STM IN BUSINESS WITH HUAWEI FOR THE AUTONOMOUS CAR
Stm is even more lively (+2,76%). According to the Nikkei Asian Review, the group is collaborating with Huawei on the co-design of microprocessors in the mobile and automotive sectors. Stm, which already supplies Tesla and BMW in this sector, is developing a project with the Chinese group for the supply of components for self-driving cars, a move that could make the US nervous. The CEO reiterated the validity of the 2022 targets provided a few months ago, 12 billion dollars in revenues with an operating profit of around 18%. Runs Tim +5,75%.
ATLANTIA ALLOCATE FUNDS TO LOWER RATES
Atlantia also performed well (+2,68%), after the publication of the 2019 accounts and awaiting the possible agreement with the Government on the subject of the concession. In the fourth quarter of 2019, an extraordinary provision of 1,5 billion euro was made in favor of Autostrade per l'Italia, an amount to be allocated to toll reductions, discounts and contributions to the Italian infrastructure network: the company announced that it had launched a negotiation with the ministry on the concession. Equita sim raised the target price of the share by 8% to 16,4 euro (rating hold confirmed).
Fincantieri +5,57% and Salini Impregilo +1,26% following the completion of the new bridge over the Polcevera, built by the two companies.
THE CAR AND THE BANKS ALSO ADVANCE
Positive day also for the Italian automotive sector. Sales Fiat Chrysler (+3,66%), Pirelli +3%. Ferrari moved little (+0,31%). Tim also runs (+5,75%). Among the pharma stocks, Recordati stands out (+5,86%). Diasorin (-2,93%) in retreat after the government has chosen Abbott's kit for coronavirus tests.
The cut in the spread did not slow down the banking sector: Banco Bpm +2,53%, Intesa Sanpaolo +2,29%, Unicredit +2,05%.
JUVENTUS, AMPLIFON AND IMA DOWN
Juventus (-3,61%) and Amplifon (-1,27%) close in the red. Ima was also down (-3,86%), on which Kepler Cheuvreux confirmed the hold recommendation with a target price of 48 euros. Negative session for Erg (-4,27%), Datalogic (-2,28%) and Cerved (-1,97%).
