“Qe works”. Mario Draghi himself underlined it yesterday morning. And the trend of the European markets demonstrates that the number one of the Eurotower, once again, was right. In Milan, the FtseMib index rose by 2,1%, the Paris Stock Exchange gained 2,3%, Frankfurt +2,6%.
The dollar is advancing like a steamroller. The euro slips to 1,05 to a 12-year low: -4,8% in the last four days. And the effects on global finance are multiplying: in short, QE is not exclusive to Europe.
The Turkish lira and the South African rand suffered a similar devaluation, the Brazilian real lost twice as much. This morning, surprisingly, South Korea lowered rates to 1,75%, with the aim of countering deflation and boosting growth. Thailand did the same. India and China are also recovering from monetary easing operations, as are Singapore, Indonesia and Australia.
The effect on Asian price lists was not long in coming. Tokyo advances +0,9%, as does the Asia Pacific index.
TURNING POINT AT THE FED, WALL STREET DOWNSTROKE
Wall Street, on the other hand, is lagging behind: the Dow Jones index fell by 0,16%, the S&P 500 by 0,19% and the Nasdaq by 0,2%. Apple is down 1,8%. After the Stock Exchange, the Fed communicated the results of the stress tests on the banks: Citigroup and Morgan Stanley awarded, both up by 3,1%, Bank of America down which, although promoted, will have to strengthen their capital.
Wti oil stable at 48,17 dollars and Brent at 57,3 dollars a barrel. The US stock markets are starting to deal with the effects of the strong currency: the first quarter profits of the companies in the S&P basket will be, according to initial estimates, 2,7% lower than twelve months ago.
But the slowdown will not, in all probability, slow down the Fed's decision to raise rates. James Bullard, president of the Saint Louis Fed, argued yesterday that "postponing again would be a big mistake". The meeting of the FOMC, the monetary committee, is set for March 17-18.
BTP MATURITY 2045 FALLS BELOW 2%
The flattening of the European interest rate curve continues, perhaps faster than expected, under the pressure of operators willing to ride the ECB's action. The yield of the 10-year BTP fell to 1,11%, the spread with the Bund is 91, despite the run towards zero of the Bund yields. Yesterday the German government placed 4 billion 2-year government bonds at a negative rate of -0,2%.
Meanwhile, again yesterday, the Treasury placed 6,5 billion one-year BOTs at an unprecedented yield of 0,07%, up from 0,20% at the February auction. Meanwhile, the auction on medium and long-term BTPs will be held this morning: 3,7, 30 and 2046-year bonds will be offered. There is strong anticipation especially for the new thirty-year 2: yesterday the rate of the extra-long bond slipped below 10% for the first time and the 30-XNUMX section of the curve is flattening further.
TELECOM GOES BOOM, FINMECCANICA FOLLOWS
Along the list of titles awarded by Toro. Leading the race was Telecom Italia, which achieved a leap of 7,7% after the indiscretions of the Financial Times which believes the merger between Wind and 3Italia is very close. For the former incumbent, the news should be positive because competition on the domestic market should decrease.
China's Hutchison Whampoa is expected to have 51% of the aggregate. The first shareholder of VimpelCom is the Russian billionaire Mikhail Fridman, who took the field last week with the purchase for over five billion euros of some assets of the German RWE.
The publication of an interview with Franco Bassanini, president of Cdp, also benefits the former incumbent: the company led by Marco Patuano, explains the president of Metroweb, could be reserved the right to increase to 51% of the company, once the investments for ultra-broadband.
Another stock in great evidence Finmeccanica (+5,5%): the market is betting on the sale of Drs and on the purchase of Avio. Also noteworthy are the increases in Prysmian (+4,2%) and StM (+3,5%). Enel performed well (+3,1%), accompanied by A2A (+2,8%) and Terna (+2,2%). Nearly invisible government bond yields make high-dividend companies attractive.
CAR IN RALLY. FCA AND PIRELLI EXTEND
With the rise in the dollar, the shares of cyclical companies benefit above all, with a large share of exports to the USA. The European Stoxx automotive index gained 3,6% yesterday. The German auto giants are in a state of grace: Volkswagen advances by 4,7%, BMW +4,9%. Fiat Chrysler rose 3,4%, also on the back of analyst promotions.
Bnp Paribas revised the target to 16,5 euros, from 15 euros, maintaining the Outperform rating. Barclays has raised its target price to 15,5 euros from the previous 11,5, confirming the Overweight. Tireless Pirelli (+5,2%), brilliant Brembo (+3,8%).
SPOTLIGHTS ON THE LION'S DIVIDEND
Attention is focused on Generali's results (+1,9%) which will be announced this morning. The market is betting on an increase in the coupon, crowning Mario Greco's strategies. The banking sector was brilliant, following the growth of the securities portfolio. In this context, MontePaschi's rise (+3%) stands out. Unicredit +0,9%, Intesa +1,4%. Pop.Milano shines +2,8%.
CUCINELLI FLOPS AT THE LUXURY FASHION SHOW
The luxury stocks sector is on the rise. Awarded the strongest brands on the US market. Starting with Luxottica (+4,11%). HSBC raised the target price from 56 to 61 euros (rating neutral). Followed by Yoox (+3,3%) and Tod's (+2,6%). Salvatore Ferragamo +2%. Mediobanca Securities raised its target price from 28 to 30 euro, confirming the outperform opinion.
The exception is Brunello Cucinelli (-5,08%) who finished the session at a low of 18,31 euros, paying the indications on the evolution of the ebitda margin for 2015. Tp from 56 to 61 euros (neutral rating). After the data many brokers have worsened their view on the prospects of the cashmere company.
Natixis cut the rating to Hold da Buy, targeting 18 euros from 19 euros. Nomura has maintained the Reduce, reducing the target price to 18 euros from 18,50 euros. SocGen reiterated the Sell, lowering the target to 15 euros from 17 euros. Kepler Cheuvreux has decided to cut the Hold da Buy recommendation, lowering the target price to 18 euros from 19 euros.
CAMPARI ADVANCES, PRELIOS GOES INTO ORBIT
Also note the rise of Campari (+3,4%) after the good results. The stock received positive reviews from analysts: Nomura raised the target price of the stock to 7 euros from 6,5 euros, Ubs to 5,6 euros from 5,1 euros, Equita Sim to 6,6 euros from 5,8 euros, Kepler Cheuvreux at 6,9 euros from 6 euros and Banca Akros at 6,3 euros from 5,7 euros.
In the meantime, the race for real estate securities continues, rewarded by the revival of mortgages linked to the start of Qe. In great evidence Prelios (+11,91%), which celebrated the results of 2014 and the appointment of the CEO for the spin-off of the assets. Among the positive real estates also Hi Real (+23,76%), Gabetti (+12,31%) and Risanamento (+10,9%).
