Ahead of the November election, Republicans are playing the Wall Street card again. Yesterday Donald Trump's party announced a new tax cut, with the aim of supporting the market rally, fueled by buybacks and super dividends. The news favored a timid rebound on Wall Street, back from four sessions in the red. But concerns remain about the next barrage of tariffs against China, for another 267 billion dollars, destined to hit Apple and other big tech companies like a boomerang.
According to Deutsche, among the goods not yet affected are smartphones (43 billion dollars), PCs and Pads (37 billion), as well as 12 billion electronic games. Hence the conflict between Apple, which signals the risk of large increases for US consumers, and Trump who replies: "As long as they decide to produce the iPad in the US".
A NEW MEETING BETWEEN KIM AND THE US PRESIDENT IS AHEAD
Against this backdrop, Asian stock markets are expecting and achieving a modest rebound, in line with the USA.
Hong Kong +0,1%, CSI 300 index of Shanghai and Shenzhen stock exchanges +0,2%.
The dollar strengthened for the fourth consecutive day to 6,86 against the yuan.
The South Korean stock market fell slightly, Kospi index -0,2%, after the announcement by the White House of a new meeting between Donald Trump and Kim Jong Un.
The rebound of the Tokyo Stock Exchange is more robust. The Nikkei index rose by 1,1% at the end of the session, thanks to the push of companies linked to domestic demand. Chip giant Reneas has announced the purchase of Integrated Devices Technology for 6,7 billion cash.
The yen weakens against the dollar to 111,4. The euro restarts from 1,160 against the dollar, the day closed with an increase of 0,4%. Again this morning the pound at 1,3032 against the dollar.
RATES HIT APPLE AND BOEING. ALIBABA IN DECLINE
Wall Street closed slightly higher last night after four consecutive days of declines. S&P500 +0,2%, Nasdaq +0,3%. The Dow Jones, down 0,2%, was weighed down by the companies most exposed to trade wars: Boeing -2,5%.
Apple also suffers (-1,3%). The decline of Alibaba was heavier (-3,7%) after the announcement of the return, in a year, on the news of the departure of Jack Ma, the founder, in a year. Daniel Zhang, the company's number two and general manager, will take over from him.
OIL STILL ON THE RISE. UBS PROMOTES SAIPEM
Brent oil trades at 77,5 dollars a barrel, the third consecutive day of gains. Wti at 67,58. In Libya, yesterday there was an attack on the headquarters of the national oil company in Tripoli, but production did not stop or slowed down.
Saipem rises in Piazza Affari (+3,4%) approaching the record price of 2018 of last week marked at 4,85 euros. The decision taken by UBS to raise the target price to 4,90 euros from 3,40 euros also contributes to the purchases. The upside potential is around +45%.
Eni +1,1%. With the leap in production announced by the Zohr field, Egypt becomes the company's first hydrocarbon producing country.
Tenaris, on the other hand, falls (-0,96%), among the few stocks in the red yesterday.
MORGAN STANLEY PROMOTES BTPs TACTICALLY
Buy Btp, sell the Spanish card. This is the “tactically” operation suggested yesterday morning by Morgan Stanley to its customers. The broker acknowledged the words of Minister Giovanni Tria at the Ambrosetti forum, from which they have drawn the belief that for the next budget law, scheduled for September 27, the government will aim for a deficit/GDP ratio of around 2,2% . In this case, according to MS, the BTP could recover further ground after having already reduced the spread from the August peak (175 points) to 146. Hence the advice to sell the Bonos and focus on the BTPs. But soon, given the size of the Italian debt.
MEDIOBANCA: THE SPREAD WILL FALL TO 220 BPS
Morgan Stanley's report interpreted the general sentiment of the market. Mediobanca believes that the spread will drop to around 220 basis points, even if the correct value, that expressed by Italy's fundamentals, should be between 100 and 150 basis points. The policy is worth about 70 basis points more than the spread.
The most important appointment on the calendar this morning is at 11, with the publication of the Zew index on the prospects of the German economy.
BUSINESS PLACE NEAR 21 THOUSAND POINTS
The Milan Stock Exchange (+2,30%) broke through the wall of 20.900 points yesterday (20.919 at the end). According to Morgan Stanley, Italian shares have a potential for appreciation of around +12%, starting with bankers. Preferred stocks: Mediobanca, UniCredit and Intesa.
The other European stock exchanges were also positive, supported in the afternoon by the brilliant opening of the US markets: Frankfurt +0,24%; Paris +0,33%; Madrid +1,12%; Zurich +1,03%.
STOCKHOLM +0,37%. BUT VOLVO POSTPONES THE IPO
Stockholm also rose (+0,37%): the populist right gained positions but did not break through. The Chinese shareholder Geely has decided to postpone the listing of Volvo to next year: the uncertainties on the US tariff front are weighing.
Flat in London (+0,01%), soaring the pound (0,891 against the euro) driven by the prospect of a "realistically" Brexit agreement within the next two months, according to what was foreseen by the EU chief negotiator, Michael Barnier. The British currency appreciates against the dollar, but also against the euro, with the exchange rate in the 0,891 area. The single currency instead dominates the greenback and the cross returns to the 1,16 area.
ASTON MARTIN'S DEBUT READY
Aston Martin's next IPO has been confirmed. The British group, whose main shareholder is Investindustrial, confirmed its listing in London with a minimum free float of 25%. The 5,5 billion euro operation coordinated by Deutsche Bank, Goldman Sachs and JP Morgan.
The Eurostoxx 50 gained 0,9%. For the first time after 25 consecutive weeks of capital outflows from Europe, -40 billion since the beginning of the year, a trend reversal was recorded last week: +300 million dollars in investments.
THE CDS DOWN ON ITALY. 7,75 BILLION BTP ARRIVES
Day of recoveries for Italian debt securities, in view of the forthcoming auctions (starting on Wednesday with 12-month BOTs).
Compared to last Friday's 250 basis points at the close, the yield gap between ten-year BTPs and Bunds narrowed to below 235 cents, with a plunge to 233,6 basis points, a record since 2 August.
Parallel to the narrowing of the yield gap on Germany, the decline in credit default swap derivatives, which insure against the risk of sovereign insolvency, with the five-year contract at around 222 cents.
The Treasury returns to the market on Thursday with 7,75 billion lire divided over 3 lines (3,7, 30 and XNUMX years). It will be an important test to test the demand, especially from abroad.
SUPERSTAR BANKS, MPS FLY
Glorious day for Italian banks, with the sector index up 4%, well above the European one.
Bpm led the race (+4,85%), ahead of Unicredit (+4,67%) and Intesa (+4,53%). Snatch Mps to +8,24%.
Mediobanca, which has been at the center of speculation on possible M&A transactions for days, stands at +4,4%. This morning, meanwhile, sources reported that Unicredit is oriented towards not giving early notice of the syndicate pact.
Off the main list Banca Intermobiliare, which approved the strategic plan to 2021 last week, jumps up by 26,76%.
LEONARDO AT THE TOP. THE TIGER FUND BETS ON MANLEY
Not just banks. The top stock of the day was Leonardo: +8%, at 10,42 euros, after the purchase of Vitrociset. Mediobanca Securities reiterated its "overweight" opinion with a target of 14 euros.
Fiat Chrysler, in the red in the morning, reversed course, closing up by one point. Tiger Global, the hedge fund led by Chase Coleman, strengthened its presence up to 3,85% of the capital going from 26 to 60 million shares and thus becoming the fourth shareholder of the group. The operation, which took place on September 3, is the first under Manley management.
Among the blue chips, Mediaset was well bought, rising by 4,79%. Il Biscione has denied the indiscretion of being interested in the purchase of the remaining 48% of its subsidiary Mediaset Espana, up by about 10% after a flare up to +15%.
Telecom Italia was also brilliant (+3,4%) which has moved away from the lows of the last five years, helped by the drop in the spread which has a positive effect on financial stocks and highly indebted ones such as Tim. Deutsche Bank has upgraded its rating on European telecoms to "overweight". The Board yesterday confirmed the broad mandate to managers for the presentation of a bid for the 5G auction.
JUVE TRAVELS FROM RECORD TO RECORD
Utilities were positive: Enel +3,5%, Snam +2,2%.
Juventus' march continues: +8,02% to 1,1522, above the placement price in 2002.
Eurotech did well (+7,35%) after half-year results judged strong by Mediobanca Securities.
FRIED OIL IS BIO-ON'S SECRET WEAPON
Sull'Aim Bio-on rose to 57,70 euros per share (+6,07%), following the news of a new patent for making plastic from frying oil.
Among the few stocks in the red, Astaldi stands out, losing 6,27%. On Friday Fitch cut its rating to 'CCC-' from 'B' and placed the company on rating watch evolving.
