The weekend rebound on Wall Street doesn't seem likely to continue. Asian stock markets fell this morning, starting with Japan (-1,4%), hit by the threat of US tariffs on cars. The Chinese stock exchanges also suffer: Hong Kong -1%, the CSI 300 index of the Shanghai and Shenzhen stock markets (-0,7%) is once again close to the lows of the last two years.
Despite the good start to the quarterly earnings season, the group of big names is growing (including Bridgewater, the most powerful hedge fund on the planet) who say they are pessimistic about the future of the markets, under pressure from China's slowdown and rate hikes USA. And so safe-haven assets are back in the news: gold rose tonight to the highs of the last two and a half months at 1.221 dollars an ounce. The yen is also appreciating, appreciated by investors in moments of high turbulence in the financial markets of Asia: the cross is at the lows of the last month at 112,1.
ARABIA UNDER FIRE AFTER KASHOGGI'S ASSASSINATION
Another alarm comes from Riyadh. Oil flies one step away from 82 dollars (against just over 79 for Brent over the weekend), while the big names in US finance, from JP Morgan to Ford, have decided to desert the Saudi investment conference. It is the reaction to the assassination of the Saudi journalist of the Washington Post Jamal Kashoggi, a crime that forced Donald Trump himself to distance himself from Mohammed Bin Salman. The pressure pushed the Saudi stock market down yesterday (-7%), together with that of Dubai. But Riyadh has already reacted harshly. The Saudi foreign minister warned on Saturday that the kingdom would respond in kind to any incoming measures.
THE GREENS TRIUMPH IN BAVARIA. CSU AND SPD IN CRISIS
Euro weak at 1,153 against the dollar. Weighs the political earthquake in Bavaria, the region that accounts for more than a fifth of the German economy, governed by the CSU since 1957. Angela Merkel's ally drops from 47,7 to 36,2% of the votes and will have to resign themselves to a coalition government with the local liberals and conservatives, who however have not shared the very aggressive policy on immigrants of Interior Minister Horst Seehofer . The real winners are the Greens, who rose to 18,1 from 8,4%, awarded for their policy of openness to immigrants and the battle for the climate. The result marks, a few months before the European elections, an abrupt defeat for the coalition that supports Angela Merkel's government in Berlin.
FINAL ADJUSTMENTS TO THE MANEUVER: THE PLATE IS CRYING
“History tells us that the world is about to go through another financial crisis. One of the places where it can break out, judging by a growing number of indicators, is Italy. Thus last Saturday the New York Times, awaiting the tax decree and the programmatic document that should arrive tonight at the council of ministers set for 18 pm: the government is still hunting for financial guarantees.
The stone guest remains the financial market which has already expressed its first verdict: the index (-0,5% to 19.265 on Friday) closed its worst week in the last two years with a cumulative loss of around 5,2%. To find a larger drop, we need to go back to November 2016. Piazza Affari is at its lowest for 18 months, the spread closed above 300.
STERLING DOWN, TIMES DECISIVE FOR BREXIT
Another area of tension, Brexit. This morning the pound retreated to 1,3077 against the dollar after the disappointing outcome of the Sunday meetings to find an agreement between London and Brussels. Tomorrow the UK will announce data on employment (the number of jobless, unchanged, is expected at 4%) and inflation (estimated +0,2% in September).
Light calendar for Piazza Affari: the delisting of Ei Towers and the shareholders' meeting of Ubi Banca to be recorded on Friday.
BANK OF ITALY TODAY UPDATES DEBT NUMBERS
Speeches by Ignazio Angeloni and Danièle Nouy, both members of the supervisory authority of the ECB, are scheduled for the day. Sabine Lautenschlaeger, vice president of the central bank's supervisory area and member of the central bank's executive council, warned on Friday that "Frankfurt will not help irresponsible governments."
Today the Bank of Italy will communicate the update of the amount of the public debt. In Bali, on the occasion of the IMF summit, the governor Ignazio Visco said that "there is no room for letting one's guard down".
CHINESE GDP AND FED MINUTES DURING THE WEEK
The most important macro data of the week will come from Beijing: Chinese growth in the third quarter, according to analysts' estimates, should have reached 1,6%, for an annual increase of 6,6%. The forecast was supported by the increase in exports in September (+12,3%) higher than forecasts. But an alarm comes from the car: for the first time the market in China is down.
The inflation data will be released today. Japanese industrial production is also outgoing.
Also very significant are the minutes of the last meeting of the Fed to be released on Wednesday. It will be an opportunity to have confirmation of the Central Bank's determination on the path to raising rates. The opportunity for a response to Donald Trump's invectives, agitated by the approach of the next elections. According to polls, the performance of Wall Street has a negligible value on the electorate as a whole, but it can be decisive in quite a few constituencies (just under 40) in the wealthiest America.
TODAY IN WALL STREET THE ACCOUNTS OF 54 CORPORATIONS
On the corporate front, after the brilliant debut of the big banks' quarterly reports (today it's Bank of America's turn) it will be the turn of 54 Standard & Poor's companies. Among them: Johnson & Johnson, Morgan Stanley, Goldman Sachs, American Express, Schlumberger and United Continental.
Despite the recovery on Friday, the balance for the week is strongly negative: Dow Jones -4,2%, S&P 500 -4,1%, Nasdaq -3,7%.
