Expectations of an increase in the cost of money are rising almost everywhere. The rain of sales involved Bonds, BTPs and Bunds at all latitudes, causing a simultaneous growth in yields. The US ten-year bond rose to 1,87%, the German five-year bond returned for the first time since June above the ECB deposit rate threshold. The same script for BTPs: the yield on 10-year bonds goes to 1,57%, a level not seen since February. Difficult to identify the triggering cause of the phenomenon: the movement was accentuated by the rise beyond the expectations of the GDP of the United Kingdom, which caused the technical levels to break starting from the British Gilts. Others, given the intensity of the movement, evoke the shadow of China: the resumption of capital flight from Beijing may have forced the authorities to liquidate large stocks of securities.
What is certain, however, is that the market is beginning to discount the effects of the economic recovery and, in parallel, of inflation, trying to anticipate the moves of the central banks. The publication of US GDP data for the third quarter, scheduled for today, could confirm the recovery trend of the US locomotive. In Europe, the signals on the ECB's next moves are multiplying: at the December meeting, the extension of Qe until next September will be announced, but, if the macro data confirms the current trend, the monthly amount of purchases will be reduced, which could be concentrate on the countries (see Italy) where the supply of “paper” is still high.
The news on the debt market front had an immediate impact on the dollar, which remained at the highs of the last three months (1,0899 against the euro) and on the stock markets, starting from the most interest-sensitive sectors. The companies most penalized by the rise in interest rates were sold, starting with real estate companies and sectors exposed to consumption. Telephone companies, on the other hand, are considered a defensive segment: the sector index actually gained 1,5%.
But the positive trend of the quarterly campaign made it possible to reduce the impact on the indices. However, the perturbations on the debt market affected Meteo Borsa.
AT WALL STREET SALE ALPHABET, ROUND BY AMAZON
Tokyo rose slightly (+0,6%), committed to digesting the latest macro data: inflation continues to fall (-0,5%), but unemployment also falls, down to 2,3%. Traders are betting that the Bank of Japan, which meets on November 0,3st, will launch new anti-deflation measures. Hong Kong loses 0,3% and Shanghai climbs slightly. Seoul -0,1%, Mumbai -XNUMX%.
Closing down for the American indices: Dow Jones -0,16%, S&P -0,3%, Nasdaq -0,65%. Contrasting reactions after the Stock Exchange for the Bigs who released the data last night: Alphabet advances (+2,3%) after the strong increase in revenues of the parent company of Google (22.45 billion dollars in the quarter against 18,68 previous ones) . Amazon plunged (-6%): the quarterly profit was only 0,52 dollars (against 0,78 expected). Comcast also falls (-0,9%): Barclays and Deutsche Bank have revised their target downwards for fear of competition from AT&T. The health and pharma sector did very well. Bristol Myers up 5,4%, Celgene up 6%.
Oil has returned to growth: Brent gains to 50,51, Wti above 50 dollars: the signs of difficulty for the agreement on OPEC production cuts are multiplying. Positive session yesterday for Eni (+1,56%) and Tenaris (+1,3%). Still sales on Saipem (-2,59%) after the write-downs of the quarterly.
CAR 1/ TESLA IS WORTH FORD FOUR TIMES
Great news emerges in the trend of automotive stocks from the US and European quarterly reports. In the USA Tesla flies (+4%) after closing the quarter with a profit of 22 million. The electric car company currently has a market capitalization of 30 billion dollars.
On the contrary, as Reuters points out, "Ford and GM's attempt to convince investors that they are no longer prisoners of the car market cycles, but that they are ready to respond to the challenge from Silicon Valley, seems to have failed". General Motors, which also reported record revenue on Tuesday (quarterly revenues at 2,8 billion), left 5% on the market.
Ford, which promises the self-driving car as standard by 2020, loses 1% after the results: against sales of one billion in the quarter, capitalization fell to 7 billion dollars (-17% in a year).
CAR/2. BMW OR PSA, POSSIBLE SUITERS FOR FCA
Great movements also in Europe. Positive Volkswagen (+0,82%) which absorbed the maxi-outlay for Dieselgate in the USA. Japanese houses have decided to stay in Great Britain despite Brexit. After Toyota, the confirmation came yesterday from Nissan, which will develop the new Qashqai in the Sunderland plant.
But the brightest stock is still Fiat Chrysler, which gained 6% after rising 4,3% the day before following good quarterly data. The rally is favored by the rumors about the appointment of two advisors to plan its future. There is talk of a possible merger with Psa or agreements in the high-end segment with BMW.
CAR PUSHES CHIPS. QUALCOMM BUYS NXP
Movements in the semiconductor sector, among the liveliest in terms of mergers, are closely linked to the new arrivals in the automotive sector, now much more linked to electronics than to more traditional technologies. Yesterday, the giant Qualcomm bought the Dutch NXP Semiconductors for 39 billion dollars, expanding its empire into a supplier of chips for the automotive industry. The deal is one of the largest in semiconductor history, second only to Dell's $60 billion acquisition of EMC. Nxp is one of the protagonists of the chip market for the auto industry, and Qualcomm with the acquisition shows that it intends to supply its chips to autonomous cars.
StM also operates in this market segment, which gained 10% after announcing good results for the third quarter, which closed with an increase in the Gross margin above analysts' expectations. A statement announces that profitability will continue to grow in the fourth quarter, whereby the company expects “sequential growth in net revenues of approximately 3,2% at the midpoint and gross margin of approximately 37,0%. Additionally, we expect to improve our profitability for 2016 and continue to generate robust free cash flow. We remain cautious with respect to macroeconomic factors and their potential impact on our customers and the semiconductor market,” the group writes.
DEUTSCHE BANK WAKES UP. MILAN +0,84%
A mixed day also for European equities, affected by the upward movement in rates. Today the spotlight will be on the accounts of the big banks in France and Switzerland. Attention also to the results of the French GDP.
Milan, together with Madrid (+0,14%), closed in positive territory: the Ftse Mib index rose by 0,84% to 17.427 points. London is also on the positive side (+0,29%), on the wave of GDP data. Slight drops for Paris (-0,13%) and Frankfurt (-0,01%), despite the surprising recovery of Deutsche Bank accounts (+0,60%). The accounts of Nokia are disappointing, falling by 7,6% in Helsinki after issuing a "warning" on the deterioration of the business in the coming months.
Great expectations, given the market situation, for today's auction of government bonds. Between 7 and 8,5 billion euros will be offered in 5 and 10-year BTPs in addition to the new CctEu February 2024. The forecast is for a significant rise in yields. At the end of yesterday's session, the 5-year was trading at 0,583% from 0,28% of the placement at the end of September, while the 2026-year December 1,614 soared to 1,21% from 2015% at last month's auction. If confirmed by tomorrow's placement, it would be the highest five-year yield since September 2015 and the record ten-year yield since August XNUMX.
MPS STARTS AGAIN. DB AWARDS BPM AND BANCO POPOLARE
The performance of Piazza Affari was once again hand in hand with that of the banking sector. Monte Paschi recovers (+1,3%), up Banco Popolare (+3,08%) and Bpm (+4,88%), which Deutsche Bank judged the top picks of the Italian sector, reiterating the buy ratings, but reducing the respective target prices from 3,3 to 3,2 euros and from 0,56 to 0,51 euros. Progress also for Unicredit (+2,7%) and Intesa (+1,5%).
KEPLER GIVES THE CHARGE IN CAIRO
Recordati reports an increase of 0,6%: profit for the first nine months of 2016 rose by 19%, exceeding analysts' estimates. In the media sector, the promotion of Kepler Cheuvreux drove RCS (+1,51%) and Cairo Communications (+1,35%). The business house has raised its opinion on the two titles from hold to buy, raising their respective target prices from 0,77 to 1,2 euros and from 4,2 to 5,3 euros. The group could "become one of the leaders in Italy in multimedia, while increasing its geographical exposure (Spain)".
