“They tell me I was too heavy on North Korea. On the contrary, my words weren't strong enough: they don't know how much they are risking". Donald Trump has thus raised the tone of the war, fortunately only verbal for now, with Pyongyang, which threatens to launch four missiles on Guam, a US territory in the heart of the Pacific. And so the financial markets, while convinced that in the end there will be no clash, are forced to gear up for a mid-August full of nuclear fear. Hence the slowdown of the Stock Exchanges and the race, more convinced than in recent days, for safe-haven assets. Even after a long hibernation, the Vix, the index of fear, rises again to the maximum for nine months. The feeling is that many fund managers are ready to take advantage of the situation to "take their foot off the accelerator" after the long series of increases, especially in technology, convinced that it is more prudent to monetize part of the gains. Certainly the situation, on the eve of the mid-August break, makes you want to prefer the beach to price lists that risk burning.
Meteo Borsa reports strong sales on eastern markets this morning. The Asia Pacific index fell (-1,4%), as did the Sydney Stock Exchange (-1,3%). The most conspicuous losses affected Seoul (-1,8%). Hong Kong was also down sharply (-1,9%). Shanghai down (-0,6%). The Tokyo Stock Exchange is closed for holidays. However, the yen is recovering strongly to 109 against the dollar.
Gold is trading at $1.287,12 an ounce this morning. An invitation to buy gold, as a form of hedging, came in tonight from Ray Dalio, one of Wall Street's top investors. The chairman and managing director of the Bridgewater fund, the largest in the world, warns that the risks are on the rise, the market is not pricing them correctly. In addition to a possible military confrontation with North Korea, there is also the possible default of the United States, caused by a possible lack of political agreement on raising the maximum debt.
TECH STOCKS ARE SHARP DOWN, UTILITIES HOLD ON
Wall Street is also down. Leading the descent was the Nasdaq, which dropped 2,13%. The S&P 500 index fell by 1.45%, the biggest drop in a session since May 8th. Dow Jones -0,93%. The sector that suffered the most was tech (-2,2%). Apple (-3,1%) was sued by a group of 28 Chinese app developers who accuse it of violating antitrust laws with its App Store.
Meanwhile, the war between the big names in multimedia is accelerating. Netflix loses another 4,1% after the break with Walt Disney (-1,44%) . Not even Facebook is saved (-2,21%) which has launched the challenge to the big TV corporations and the big rivals of the web with Watch, a new platform on its social network, the largest in the world, capable of offering short episodic videos.
The only sector on positive ground is that of utilities (+0,25%). The unexpected drop in producer prices (-0,1%) also helped to keep things going, leading to forecasts of a decrease in inflation and increasing uncertainty about future rate increases. According to fed-funds futures, the probability of an increase in the cost of borrowing by the end of the year is 42% compared to 59% last month.
TRADITIONAL TRADE SINKS: MACY'S -10,2%
Under pressure from Amazon, traditional commerce sinks: Kohl's drops by 6%, Macy's -10,2%. Even though profits rose to $116 million thanks to cost-cutting, sales continue to decline as sales shift to the online channel. At current prices, the company capitalizes on just 6,44 billion euros, the loss since the beginning of the year is 40%.
Busy day for oil. In the early afternoon, crude oil appreciated on the wave of the upward revision of OPEC estimates. Then, due to the increase in production (+0,5%) in July, the price turned downwards: this morning Wti and Brent traded respectively at 48,42 dollars and 51,53 dollars. In Piazza Affari Eni closes unchanged, Saipem -0,8%, Tenaris +0,6%
DOWN EVEN EUROPE. THE SPREAD GOES BACK TO 162
European price lists in red throughout the day, in a careless search for ideas to raise one's head in the balance between mid-August apathy and the fears aroused by the Korean crisis. The European futures signal a start down by half a point. In Piazza Affari, the Ftse Mib index closed down by 0,76% at 21.681 points, further and further away from the 22 mark.
Frankfurt, -1,15%, to its lowest since the end of April, and Madrid -1,38% lost more than one percentage point. Limit Damage Paris – 0,59%. The worst Stock Exchange was London, -1,44%. British industrial production showed an unexpected recovery in June, posting a +0,5% but the decline in car production (-3,6%) and the construction sector (-0,1%) does not leave good hope for the next few months.
Istat has announced that in June the balance of the Italian trade balance recorded a surplus of 4,502 billion euros, compared to a surplus of 4,661 billion in the same month of 2016. From the annual analysis of the Mediobanca research office on the data financial results of the 2065 large and medium-sized Italian industrial and tertiary companies, it emerges that in 2016 large Italian industrial and service companies lost 2% of their turnover over the year, the fourth consecutive decline since 2013.
Session in the sign of weakness for the Italian secondary. The ten-year term closed at 2,028%. The spread recovered in the evening around the highs of the day before, at 162 basis points. The Italian Treasury placed 6,5 billion euros in 12-month Treasuries with a yield up to -0,337% from the previous -0,352%, an all-time low. It was the only mid-month appointment, after the cancellation of the medium-long term auction (in addition to that of the month-end indexed auctions).
The European Central Bank is likely to announce changes to its bond purchase program in September. This is what emerges from a Reuters poll after the ECB left its ultra-accommodative monetary policy unchanged last month and said it had not discussed Qe, stressing that the topic will be addressed "next autumn". Twenty-eight of the 50 economists interviewed between August 7 and 9 said they expected Frankfurt to give its opinion in September, while 15 of them will have to wait for October.
BANKS AND INSURANCE SUFFER
In Europe, all the Stoxx sector indices finished down, with the greatest losses for Banks (-1,6%) and Insurances (-1,2%). In Piazza Affari, Unicredit lost 2% despite Berenberg raising the target price on the latter to 16 from 15 euros. Intesa -0,2%, Banco Bpm -1%, Ubi -2,1%. Among the insurance companies, Generali -0,5%, Unipol -1,9%. Banca Generali drops by 1,7%.
ROOMS ONLY CAMPARI. DOWN THE INDUSTRY
Enel slips (-1%), a sharp decline in Telecom Italia (-1,6%). Industrial stocks fell: Leonardo -0,8%, Stm-1,4%. Reductions for Recordati (-1,7%) and Prysmian (-1,5%). Good rise for Campari (+2%), supported by the promotion of SocGen to Buy from Hold with target price rising from 6,1 euro to 7,2 euro. Morgan Stanley analysts have raised the target price from 4,75 to 6 euros with unchanged equalweight opinion.
SIAS, ERG AND BANCA INTERMOBILIARE FLY AMONG THE SMALLS
Sias, the second Italian motorway concessionaire, located above all in the western part of the country, closed up by 4,7% at 12,25 euros. The stock reacts to the publication of data for the six months: net income stood at 95,3 million, up 24% (consensus at 81 million). Equita Sim raised the rating of the stock to buy and the target price to 14,4 euro.
Erg closed up 2,04%, at 12,53 euros. The stock reacts to the publication of quarterly data. In the April-June period, with unfavorable weather conditions, Ebitda fell by only 3% to 107 million euros, less than analysts' expectations. Net income rose to 27 million euros.
Vola Banca Intermobiliare, +8% on the prospects of the change of control of the institution after the liquidation of the reference shareholder Veneto Banca.
Save deals above 21 euros in the mandatory takeover bid following the share reorganization and which could lead to the delisting of the airport company. The stock closed at 21,12 euros after reaching a session high of 21,35 euros.
Il Sole 24 Ore is back (-1,76%) after having revised downwards the forecasts of the industrial plan for 2020 compared to the targets communicated in March.
