The markets continue to dance to the rhythm of oil. The robust rally (+7% for the WTI) gave wings to Wall Street and European stock markets. But the stock exchanges remain fragile: this morning a setback in crude oil, together with the decrease in the fixing of the yuan, caused a slowdown in Asian lists. In Tokyo, the Nikkei index, which started with a rise of 1,5%, practically wiped out the gains. Hong Kong (-0,2%) and Shanghai (-0,8%) were weak.
In short, the rise still appears vulnerable, dependent as it is on the Byzantine moves of oil producers. But for Deutsche Bank's strategists, Wall Street's recovery should be interpreted as a real return of interest in medium-long term equity investment, not a mere rebound generated by hedges.
SUPERSTAR OILS. THE SAUDI MINISTER TODAY IN HOUSTON
On Wall Street Marathon Oil scored a rise of 6,9%, Chevron +2,9%. The energy stocks in Europe are no less lively. The Stoxx sector index is up 3,17%, in Milan Eni +3,6%, Tenaris +4,2%. Saipem (+5,8%) celebrates the underwriting of the capital increase by the underwriting syndicate.
The rebound was caused by the rise in the prices of Brent (+6%) of the American WTI (+13,4% to 33,6 dollars a barrel). The rally was supported by a report by the International Energy Agency (IEA), which predicts a decrease in the production of shale oil in the United States in both 2016 and 2017. This year there is talk of a decrease of 600 barrels per day and another 200 next year. However, the IEA has made it known that the excess supply will continue if producers do not decide to proceed with an agreed cut in extractions.
Saudi Arabia's oil minister, Ali al Naibi, will speak today in Houston, the headquarters of the main shale oil companies, with which he has waged a war for the conquest of the market since the middle of last year.
The push from crude oil contributed to the advance of the indices. On Wall Street Dow Jones and Standard & Poor's are up 1,4%, Nasdaq +1,5%. Of note among the tech stocks was the move by Intel (+2,23%), which yesterday announced a technology alliance with Ericsson, LG Electronics, Nokia, Sk Telecom, Verizon and KT to accelerate the take-off of 5G technology in the mobile phone. Stm's reaction was immediate: +4,3% in Piazza Affari.
PINK JERSEY BUSINESS SQUARE (+3,5%), SPREAD BELOW 135 BP
A day of substantial increases for all the European stock exchanges with Piazza Affari in particular evidence thanks to strong gains by the banks. The eurozone private sector grew in February at its slowest pace in over a year, with both manufacturing and services firms performing less than expected, thus reinforcing expectations for the ECB's expansionary intervention as early as March .
The Milanese FtseMib index rose by 3,5%, double that of Paris (+1,7%). Plus signs also in Frankfurt (+1,9%) and Madrid (+2,2%). The spread between BTPs and German Bunds opened the week below 135 basis points, with the yield on Italian bonds at 1,53%. The Treasury announced that on Thursday the 25th six-month BOTs for 6,25 billion will be offered in auction.
STERLING AT A MINIMUM, BUT THE CITY TOASTES THE COMMODITIES
London also advanced (+1,4%), but the pound lost 0,8% against the euro, to 1,283, from 1,294 at Friday's close. The fall of the pound caused a sharp rise in commodity stocks (European Stoxx of the sector +6,3%), made up largely of British companies that benefit from the drop in the currency: Glencore achieved a leap of 11 %, Anglo American +10,8%, Bhp Billiton +8,4%, Rio Tinto +8,3%.
GOLDMAN SACHS CHARGES THE BANKS
A day of great increases for bank stocks in Piazza Affari, also fueled by the latest report cards from Goldman Sachs, which yesterday took stock of the sector. In general, American analysts expect a "challenging" scenario for Italian banks in terms of revenues, but see signs of improvement on the capital front and expect a further drop in non-performing loans.
On the eve of the Board meeting on the results, Intesa (Neutral for Gs, target confirmed at 3,60 euros) rose by 3,2%. Neutral also for Unicredit, up 6,9% yesterday (target price reduced to 5,20 euros from 6,50 euros), and Monte Paschi (+4,5%). The bank's target drops from 2 euro to 0,80: compared to yesterday's prices, the upside potential is in the order of 50%.
The preferred title is Banca Pop. Emilia (+10%), yesterday's best blue chip at Piazza Affari, confirmed in the Conviction Buy list of the US broker which however cut the target price to 9,10 euros from the previous 10,70 euros. More Buy for Pop. Milan (+2,7%).
Banco Popolare, +8% (neutral, but the target price, albeit reduced to 12,50 euros, guarantees a gain of around 60% on paper), and Ubi (+7,9%). Outside the main basket, Credito Valtellinese jumped by 7,93% after the president Giovanni De Censi said he was ready for mergers.
On the Financials front, insurance companies also rose: UnipolSai +3%, Generali +3,5%, Poste Italiane +3,5%.
VIVENDI PUSHES TELECOM, BUT COOLS MEDIASET
The Vivendi effect pushed Telecom Italia upwards (+5,5%). The French group increased its stake to 22,2%, thus offering indirect confirmation of its intention to rise to 24%. The purchases were made on the market between 16 and 19 February at a price ranging from 0,822 euro (16 February) to 0,891 euro (18 February) per share. The total investment was 161,4 million.
However, the company chaired by Vincent Bolloré has cooled the rumors about the offer for Mediaset (+2,7% but slowing down from the morning's highs of 3,39 euros): the group, internal funds told Reuters, is too busy other fronts to think about starting negotiations on Mediaset Premium.
FINMECCANICA ALLIES WITH RAYTHEON, FERRARI'S RACE CONTINUES
Among the industrial stocks, Finmeccanica stands out (+1,5%) which announced an agreement with Raytheon to participate in the tender for the advanced training system for US Air Force pilots. Prysmian also stands out (+2,9%).
Brilliant team Agnelli: Fiat Chrysler +4,1%, CnhIndustrial +4,4%. Ferrari's race continues, with its sixth increase in the last seven sessions, reaching 35,97 euros (+4,68%). In its brief history on the stock market, the stock has recovered 11% from the historic low recorded on 27,91 February at 28 euros.
RCS REVENUES FALL. INDEBTEDNESS AT 487 MILLION
Finally, Rcs (+2,55%) did well which communicated its 2015 accounts in the evening. The company ended 2015 with revenues down by 3% to 1,03 billion. Ebitda closed down at 16,4 million euros, almost half of the 2015 result, also due to a provision of 55 million euros considered non-recurring. The cash flow from ordinary operations shows an improvement of around 32 million euro. Net financial debt is equal to 487 million euros.
The company has confirmed that it will achieve its 2016 objectives: stable revenues compared to 2015 and net efficiencies of 40/45 million Euros. Ebitda margin before non-recurring charges at 10%. Slightly positive net result and net cash flow at break even. Reduction of the debt/ebitda ratio to about 4 times.
During the board meeting, the negotiation with the banks aimed at redefining the terms of financing of the group was taken stock. Strong differences remain over the destination of the collection of the 127,5 million for the sale of Libri to Mondadori. The banks would like to collect at least 80-90 million to get back the exposure, the company would instead like to return much less.
