A barrel of oil, which contains 158 liters of black gold, costs $1,10 this morning, more or less like a cup of coffee at a bar (before the quarantine). But yesterday, for the first time in history, the price of Texan crude oil, the WTI, plunged within a few hours in negative ground: -40 dollars per barrel. Madness, of course, but which can be explained by the approaching expiry of the crude oil delivery contracts at the end of May. Operators who had signed a crude purchase agreement found themselves in possession of oil that they didn't know where to place because US deposits were full. Hence the paradoxical effect: the cost of "parking" has skyrocketed. A technical phenomenon that did not involve Brent, i.e. the oil sold in Europe, processed in European and Gulf refineries and this morning traded at 25 dollars a barrel (-1% after -9% yesterday). But it is also the clamorous confirmation of the vulnerability of the global economy and finance, brought to their knees by the epidemic. Behind the collapse in prices, in fact, there is the collapse of consumption and the impotence of the leading countries, starting with the USA, unable to manage the economic situation. And the markets acknowledge that, today more than ever, the risk of being shipwrecked is really high.
ASIA IN RED, KIM HEART OPERATION
Tokyo's Nikkei fell 2%, Hong Kong's Hang Seng 2,4%, the Shanghai Composite 1,3% this morning. The Seoul Kospi is down 1,8% and the South Korean won depreciates against the dollar to 1.233. According to rumors circulating in the last few hours, President Kim Jong Un is said to be in poor health following heart surgery that took place in recent days.
THE DROP IN OIL PUT FUNDS AND ETFS IN CRISIS
The collapse of oil prices puts many subjects in crisis, first of all the large sovereign wealth funds of the producing countries, holders of important stakes in hundreds of listed companies: in the event of a rapid deterioration in market conditions, the managers must hurry to sell, in so as to respect the balance of the portfolios held. But ominous rumors also concern Wall Street's main ETFs, heavily invested in US crude oil bonds.
WALL STREET CONSOLE WITH NETFLIX AND AMAZON
This explains the sharp drop in US markets, hit by the storm arriving from Texas and Oklahoma. The Dow Jones was down 2,44%, the S&P 500 lost 1,79%. Nasdaq -1,03%, supported by the good performance of two heavyweights favored by the pandemic: Amazon (+0,8%) and above all Netflix (+3,4%). Ibm's rise was more modest (+0,5%) after the stock exchange following the announcement of the results.
The yield on the 0,60-year Treasury Note fell to XNUMX%.
Donald Trump, grappling with the epidemic, anticipated via Twitter that to deal with the spread of the infection in the United States, where confirmed cases have risen to almost 800.000, immigration to the country will be suspended. It is not known how. But the dollar is gaining positions on the currencies of oil-producing countries, starting with the ruble and the Mexican peso.
THE EURO MOVES LITTLE, TOWARDS DAY X FOR THE EU
The euro moved little while the great maneuvers in view of the European Council multiply: Germany shows its willingness to enlarge the EU budget. Southern Europe is also moving, despite the impasse of Italy, paralyzed around the dilemma Mes yes, Mes no. More concretely, Greece is asking for the removal of the bank bail-in while Spain is proposing the launch of perpetual bonds.
TENSION RISES ON BTPs, SPREAD TO 240
In anticipation of the summit between the EU premiers on Friday, the activity of the Stock Exchanges has meanwhile marked time. Above all, the tension on BTPs influenced yesterday's session: under the pressure of heavy sales, the 1,94-year yield rose to 16% (+240 basis points). The spread with the Bund widens to 5 basis points, on levels not seen since last month. A decline that can be explained by the launch of a new 2050-year BTP and the reopening of an issue to 750 announced in the afternoon. Meanwhile, the ECB continues to buy: last week the purchases of the 20 billion plan launched in March amounted to just over 5,6 billion euros, a daily average of XNUMX billion.
PARIS +0,65%. LUXURY BECOMES DEFENSIVE
Piazza Affari returns to positive ground at the end of the day: +0,07% above 17 points.
Better Paris (+0,65%). The luxury stocks lead the race: Kering +1,09, Hermes +1,6%, Lvmh +0,7%. The luxury goods sector has surprisingly outperformed the European market since the beginning of the year (-16% against -25% in the Eurostoxx), unlike in other previous crises, writes Citi. Moncler shines in Milan: +2,11%.
FRANKFURT +0,37%. MERKEL OPENS ON THE EU BUDGET
Sale Frankfurt (+0,37%), on the day of the partial reopening of schools for exams and many factories. From Angela Merkel came the willingness to consider an increase in the budget of the EU 27. London +0,45%.
ZURICH BURST WITH HEALTH THANKS TO NOVARTIS AND ROCHE
Best of all, the Zurich stock market (+1,79%), thanks to the boost from pharma stocks: Novartis +2% after the go-ahead from the Food and Drug Administration for a trial of the antimalarial drug hydroxychloroquine against Covid-19. Roche also rose (+0,6%), which is testing an old drug that could be repurposed to fight the epidemic.
IN RED MADRID: SANCHEZ OFFERS PERPETUAL BONDS FOR THE EU
Only Madrid closes in the red (-0,64%). According to reports from El Paìs, the Spanish government intends to ask the European Union to create, within a month, a fund with a firepower of 1.500 billion with the issue of bonds with no expiry (perpetual or irredeemable). The new debt would be guaranteed by the EU budget, increased by 0,8% for the occasion, in addition to the +1,2% already discussed by the European Council. Perpetual bonds would not represent debt for individual countries, just transfers. Individual countries would benefit from these funds not according to the size of the economy, but according to the impact of the virus, measured for example in terms of decline in GDP, increase in unemployment, percentage of the population affected by the virus.
ENI -1,8% BEFORE THE STORM. SAIPEM GETS ON THE TRAIN
The collapse of oil, which exploded shortly before the closing, only touched the Italian list yesterday. Eni, which will announce the 2019 data on Friday, still lost 1,8%: Jefferies reduced the recommendation on the stock from buy to hold (target 8,05 euros), Tenaris -0,59%), after Kepler Cheuvreux reduced the recommendation from buy to hold, (target from 7,5 to 7 euros). Saipem is on positive ground (+1,42%). Yesterday, the consortium to which the company is a part started construction of the second lot of the Brescia Est–Verona high-speed section, for a value of approximately 514 million euros, of which approximately 304 million pertaining to Saipem. Sales on Saras, which lost 0,5% after the stop on the coupon which nullified the advantages for the oil drop for refining companies.
DIASORIN RUNS AGAIN, JUVENTUS (+11%) TOWARDS RECOVERY
She ran again on Diasorin (+5,6%), after the go-ahead for the CE mark of the serological test capable of identifying the IgG antibodies of the new coronavirus.
Juventus stock (+11,3%) led the race of football clubs pending the resumption of preparation at the beginning of May. AS Roma (+3,3%) announced the salary cut for the current season with savings of 30 million euros. Lazio +3,8%.
Against the banks, despite the widening of the spread, Unicredit (+0,9%), Intesa Sanpaolo instead yields 0,2%. Heavy Nexi, down by 2,8%.
FERRARI RELEASES THE COUPON, ATLANTIA STARTS AGAIN
Money on the industrial sector, with CNH up 2,2%, FCA up 1,1%. Pirelli grows by 2,8%. In contrast Ferrari (-2,2%), which yesterday detached the coupon. Fincantieri was well collected, with an increase of 3,7%.
Important points for Amplifon (+10,8%) and Atlantia (+3,77%).
A CHAMPAGNE FOR CAMPARI, CHINESE MASKS FOR GIGLIO
Campari -2% after the start of an exclusive negotiation for the purchase of Champagne Lallier. Fly Giglio Group (+15,2%) in the wake of the announcement of a framework agreement with the pharmaceutical group Sinopharm, for the import and export of healthcare products from and to China. The range of items covers masks, sanitizing gels, gloves and other sanitary devices. But also kits for Covid-19 and serological tests.
