Saudi Oil Minister Al Naimi has chosen Houston, home to most of shale oil's rivals, to reiterate that the kingdom's crude output will not drop in the absence of an agreement among the industry's big names. Iran's response is ready: the request to freeze our oil exports is "simply ridiculous". Thus the great cold has returned on the oil front, with immediate negative consequences for the financial markets. Piazza Affari opened down (-1,01 at 10,13 on Wednesday morning), when the euro/dollar fixed 1,0999 in line with the previous day and the spread rose to 139 points. Other European capitals also opened lower.
Oil prices fell sharply: Brent -4,1% to 33,27 dollars in London, WTI -4,6% in the USA. Correspondingly, the oil stocks index in New York fell by 3,2%. The worst blue chip was Chevron, down 4,5%. Eni also suffers the consequences of the drop in crude oil in Piazza Affari and closes the session down by 2,1%, Tenaris -3,6%.
Financial stocks are paying a steep price: JP Morgan drops 4,2% after announcing that it will set aside another 500 million dollars to cover losses in the energy sector.
Wall Street's slowdown is inevitable: Dow Jones -1,14%, S&P 500 -1,25%. Worse was the Nasdaq (-1,47%). After the accounts, the prices of Fitbit, the manufacturer of electronic bracelets for fitness and sport, collapsed: -20,8%.
The fall in the yuan contributed to complicating the performance of the stock exchanges after the Chinese central bank decided on Tuesday morning to lower the reference on the exchange rate to the lowest level in the last six months. Meanwhile, US consumer confidence fell to its lowest level since July.
Despite the negative signals Stanley Fischer, number two at the Fed, believes it is "too early" to measure the consequences of oil and China on growth. Therefore, in the opinion of the leader of the Central Bank's “hawks”, further rate hikes must be undertaken.
RISK ATTITUDE FALLS: JAPANESE 0,0004-YEAR YEAR AT -XNUMX%
The storm continued in Asian markets this morning. Tokyo retreats (-0,7%), affected by the rise in the yen, close to its 15-month high. The ten-year government bond yield fell to -0,0004%. Chinese stock markets are also weak. But the performance of Hong Kong (-1,8%) is above all to be monitored. The drop in Standard Chartered (-6,8%) was significant, after the Bank, which specializes in emerging markets, closed the year in the red as it hasn't happened since 1988. The commodities giant Bhp Billiton suffered a drop in 9,8%, the worst one-session loss since 2008.
MILAN LEAVES 1,9% ON THE GROUND. TREASURY AUCTIONS UNDERWAY
In this context, it is very probable that the descent of the European Stock Exchanges, already suffering yesterday, will continue. Futures signal an opening down 1,5% in Frankfurt and 1,4% in Paris. London is holding up better (-0,4%), but only due to the downward pressure on the pound, still under fire due to the unknown factor of Brexit.
In Milan, the FtseMib index closed yesterday's session with a drop of 1,9%, with a downturn also for the other Stock Exchanges: Paris -1,4%, Frankfurt -1,6%, Madrid -1,3%.
Government bonds in the periphery are also under pressure on the eve of the Treasury auctions. Today the Btpei (from 500 million to 1 billion) will go to auction. Tomorrow it will be the turn of 6,25 billion semi-annual bots. Finally, on 26 February, 1,75-year BTPs will be offered from 2,25 to 5 billion, from 3,5 to 4,5 billion for the new ten-year 1/6/2026, and from 1,5 to 2 billion Ccteu .
THE LONDON (AND MILAN) STOCK WEDDING WITH FRANKFURT
In Europe, the stocks most exposed to economic growth fell the most, such as the automotive industry (Stoxx of the sector -2,2%) and banks (-2%).
The London Stock Exchange, which owns the London Stock Exchange and the Milan Stock Exchange, and Deutsche Boerse started merger negotiations. The news made the share prices of both soar: Deutsche Boerse +8% and Lse +18%. Rival Euronext instead earns 4,6%.
The first European stock exchange will be born and one of the first in the world both for trading on shares and for those on derivative products, capable of competing in terms of size on equal terms against the US Cme Group and Intercontinental Exchange as well as with the Hong Kong Stock Exchange.
FOR CREDIT SUISSE, INTESA IS THE BEST IN EUROPE
Banks under pressure, at the center of analysts' reports. The long crisis of Deutsche Bank weighs (-3,6%). Since the beginning of the year, the loss has largely exceeded 30%. The tension on the CDS also remains high. Also down were BnpParibas (-2,6%) and Société Générale (-3,7%).
A Credit Suisse report considers the decline in the banking sector excessive, but does not believe that the sector at European level has returned to being an interesting long-term investment.
For the broker in Europe there are three lenders on which to bet. One of these is Intesa Sanpaolo (-2,6%), the leading Italian bank, which closed the fourth quarter of 2015 with a comforting increase, quarter on quarter, in the interest margin.
Unicredit lost 2,5% yesterday. Banco Popolare -4,2%. Poor also Pop.Milano (-2,9%). It is unlikely that the preparations for the merger of the two institutes will be completed in time to celebrate the wedding next weekend. Population Emilia -3,7%. Monte Paschi goes against the trend (+1,9%). In asset management, Anima suffers above all (-3,5%).
INDUSTRY, ONLY FINMECCANICA HOLDS THANKS TO THE TOP GUN
Difficult day for industrialists. The auto sector is holding back: FiatChrysler fell by 2,9%, Volkswagen-2,8%, BMW-2,7%. StM (-2,4%) and Buzzi (-3,2%) also down.
Finmeccanica (+0,5%) is among the few blue chips to have closed in positive territory. The group has allied itself with the US giant Raytheon, fourth in the world in the defense sector, to participate in a maxi tender from the Pentagon to supply 350 new generation aircraft that will train American top guns. The order has an estimated value of several billion dollars.
BARCLAYS HOLDS BACK TELECOM, EXOR EXITS TV PRODUCTION
Backtracking by Telecom Italia (-1,6%). Barclays cut the target price on the stock to 0,90 euro from the previous 1,08 euro, confirming the Underweight rating. British analysts have also revised the target price on savings shares, bringing it to 0,70 euro from the previous 0,86 euro, Underweight assessment.
Out of 34 analysts surveyed by Bloomberg, optimism prevails: 20 recommend buying the stock and 9 to keep it in portfolio, the remainder to sell it. The average target price is 1,13 euros.
Weak Mediaset (-2,8%). The Spanish subsidiary concluded the treasury share buyback plan after investing 132,6 million euros out of a possible maximum of 150 million. 14,2 million shares were repurchased, equal to 3,89% of the capital.
Meanwhile, Exor (-0,64%) exited Banijay, a television production and distribution company, selling its 17,1% stake for 60,1 million in cash with a capital gain of 24,8 million.
TAMBURI LAUNCHES “ASSET ITALIA” FOR NEW INVESTMENTS
Tamburi Investment Partners drops by 0,5% to 3,138 euros. The investment company has launched an initiative called Asset Italia, a new company with "option" capital of several hundred million euros, to be paid on call, but which, contrary to all similar initiatives, does not envisage the obligatory adherence to each of the investments that will be proposed. Tip will target participants in this company for all future club deal deals, for five years. Tip will participate with 100 million. After five years, an exchange with listed Tip shares will be activated.
THUD OF RECORDATI. CHINA IS HOLDING BACK LUXURY
Weak utilities. Sales on Enel which falls by 2,4%. The subsidiary Endesa closed 2015 with a net profit of 1,09 billion. A2A -1,7%. E.On, the leading German utility, fell 4,5%.
Tonfo di Recordati (-8,9%), which paid for the placement of Torre Ss, which sold its 3,2% stake in the company's capital at 21,65 euros per share.
Fears about China affect the performance of Ferragamo (-4,4%) and other luxury stocks: Tod's loses 2,3%, Moncler -2,3%.
