Credito Valtellinese was shot on the ball on Wednesday. Yesterday was Astaldi's turn. Two completely different corporate histories but with a common trait: the violence of the fall, around 30%, without the market having had any inkling of a dramatic crisis, which in both cases will impose heavy capital increases. Other double-digit reductions, from Geox to Maire Tecnimont, to cite a couple of examples, take a back seat.
We are not at a source, as far as we know, at particular risks or worse. But after a season marked by the Bull, favored by internal and international factors, the Bear can play the dartboard against prices judged too tight. It may not be a trend reversal but many elements suggest that a correction is imminent.
Not so violent as to compromise the accounts of a good year, perhaps so short as to leave room for a mini-rally at the end of the year. But investors would do well to heed Alessandro Fugnoli's advice: subject the portfolio to some form of stress test, after which they will be able to continue to enjoy what the bull market will still want to give.
The difficulties encountered by the US tax reform are favoring the slowdown in the markets. The text that the Senate should present in the Senate next week is very different from the one that has seen the light of day in the other Chamber. The cuts to the corporate tax, in particular, are only foreseen from 2019. If the reform, the great propellant of the increase in recent months, were to water down, the markets would have to revise the estimates of company profits downwards. Wall Street thus reversed: Dow Jones -0,43%, S&P 500 -0,38%. The Nasdaq fell 0,58%.
The companies in the pharmaceutical sector suffered: Pfizer -1,4%. General Electric has reached its lowest level since 2012. In the after market, Walt Disney has 2% for oil on the wave of the quarterly judged disappointing. To avoid worse losses the news that a new Star Wars trilogy will be produced. Macy's (+10,98%) went against the trend thanks to the strong rebound in revenues.
The dollar weakened to 1,164 against the euro. The Treasury Bill yield rose to 2,34% from 2,31%. Brent oil traded at $63,8 a barrel this morning, down 0,2%, and closed up 0,7% last night. In Piazza Affari Eni -0,7%, Tenaris -0,5% and Saipem -0,7%.
Under pressure from Wall Street, Asian stock markets closed the week in the red, reducing their recent records.
Tokyo's Nikkei index lost 0,9% under pressure from Toshiba (-8%), probably forced to sell shares to deal with the crisis generated by nuclear losses. The CSI300 index of the Shanghai and Shenzhen stock markets rose by 0,4%. Donald Trump's visit to Xi Jinging was a great success from a business point of view (283 billion dollars in the amount of agreements signed) but a political flop for the US president who has not obtained any new commitments on North Korea nor in terms of trade rebalancing.
The Hong Kong Stock Exchange is flat. There was a slight decrease in Seoul (Kospi index -0,2%) and Mumbai (BSE Sensex index -0,2%).
DISAPPOINTING QUARTERLY REPORTS HOLDING DOWN EUROPE
The main European stock exchanges have retreated from their recent highs a few days ago. In this context, the upward revision of the estimates on economic growth by the EU Commission has taken a back seat. The Italian GDP in 2017 was brought to +1,5% from the previous +0,9%. The deficit/GDP ratio was revised downwards to 2,1% from 2,2%.
Piazza Affari is down, albeit supported by the rebound in bank stocks after the about-face of Danielle Nouy, head of ECB Supervision, on the non-performing front. Milan closes the fifth consecutive session down (an event that hasn't occurred since April) . The Ftse Mib loses 0,8% to 22.641: at the beginning of the week it had reached the new highs since September 2015 at 23.130 points. The Eurostoxx 600 index lost 1,1%, the largest daily decline in ten weeks. In Europe, a series of disappointing quarterly results weighed down and the indices closed down by around 1%. Thus Frankfurt -1,34%, Paris -1%, Madrid -0,74%, London -0,56%.
RATES RISING AROUND THE WORLD. BUND AT 0,37%, SPREAD AT 144
Interest rates are going up all over the world, having dropped a lot in the last two weeks following the communications from central banks. The German Bund goes to 0,37% from 0,31%. The Treasury Bill is up 2,33%, up from 2,31%. Second consecutive session down also for the Italian secondary, in line with the rest of the Eurozone. The 1,82-year yield rose to 1,74% from 1,70% at the start of the session. The rate had dropped to 10% on Wednesday. The 144-year Btp/Bund spread stood at 141 points (from 141) to 30 at the end. The most substantial losses were concentrated on the long stretch of the Italian curve with the 3-year rate back above the XNUMX% level.
BOT AUCTION UNDERWAY, BTP ITALIA COUPON TONIGHT
The mid-month auctions kick off today with the placement of the 12-month Bot (5,5 billion offer). On the gray market of Mts the yield of the Bond with maturity November 14th. The Treasury will announce today the minimum coupon of the new Btp Italia November 2023 whose launch will begin next Monday. According to analysts it could settle between 0,2% and 0,23%, the lowest ever.
In addition to the new Btp Italia, on Monday the MEF will also be the protagonist with medium-long auctions in which between 4 and 6 billion euros will be made available to investors in the reopening of 3, 7 and 15-year BTPs.
BPER LEADS THE REFUND OF BANKS, AZIMUTH SUFFERS
The happiest notes come, after the shivers of the past few days, from the banking sector after the number one of the banking supervision of the European Central Bank Daniele Nouy opened the possibility of delaying the introduction of the disputed new rules on non-performing loans after strong opposition in the method and on the merits by Italy and the European Parliament.
Bper Banca flies upwards (+10%). The quarterly data released yesterday are comforting, especially as regards capital ratios: the threat of a capital increase is receding. The other former Popolari are recovering positions: Banco Bpm +3,7%. Ubi Banca +4,5%. Mps is also recovering (+1%). Conversely, Credito Valtellinese (-1,4%) fails after an attempt to rebound at the start. Positive Mediobanca (+1,8%) and Unicredit (+1,7%), after confirmation of the results, anticipated in October.
In the asset management sector, Azimut landslide (-5%): yesterday the company announced a plan to reorganize its activities: some financial advisors have decided to open their own management company.
BANCA IMI'S AX HITKS ON YOOX
Heavy day for luxury in the wake of Yoox Net a Porter (-10%): yesterday the company presented data for the quarter that were not entirely convincing, especially as regards revenues, but the most worrying issue, for a company that justifies its multiples with buoyant earnings growth, is the downward revision of earnings forecasts. Banca IMI's ax fell on the stock, cutting the Hold rating from Add (accumulate) and the target price to 28 euros from 35,20 euros (a drastic -20%). Moncler -3%, Ferragamo -1,1%, Luxottica -1,5%. Safilo hits new five-year lows (-4,55%, at 4,88 euros). Kepler-Cheuvreux reduced the target price to 4,80 euros from 5,50 euros.
Campari also down (-3% to 6,55 euros): Goldman Sachs lowered the recommendation to Sell from Neutral, the target price was cut to 5,50 euros from 6,20 euros.
INDUSTRIAL IN RED: BREMBO BRAKES, HELICOPTER ALARM FOR LEONARDO
Industrialists are also in red. Profit taking affects Stm (-5,5%). New red for Prysmian (-1,4%). A problematic session for Leonardo is announced for today, yesterday -1,4%. Here are the words of CEO Alessandro Profumo after the board meeting: “The performance of the first nine months of the year is in line with expectations for the Aeronautics and for Electronics, Defense and Security Systems; however, some critical issues have emerged in the Helicopters sector for which we have already undertaken a series of actions. 2017 will be a more difficult year than expected but I am confident in the strengths of the three main businesses of the Group and I am confident in the growth prospects in the medium-long term". The company has decided to revise its 2017 guidance for ebita (from 1,25-1,3 billion to 1,05-1,1) and revenues (from approximately 12 billion to 11,5-12).
Brembo closed down 2% at 13,41 euros after the third quarter data. Turnover stood at 589,6 million euros, +4% compared to the same period of 2016. The consensus expected a slightly higher increase. The increase in raw materials reduced the Ebitda margin, which fell to 19,3% from 20,2% of revenues in the first half.
TURKISH FEARS FOR ASTALDI, THUD OF GEOX
Dramatic drop of Astaldi (-30%), the company announced this morning that it is preparing a capital increase of 200 million euros. The 750 million bond maturing in 2020 should also be rescheduled. It is also possible to withdraw from the concession for the third bridge on the Bosphorus and from other investments in Turkey. Equita recalls that the company has a gross debt of 2,1 billion. Against this debt, the capital invested in the concessions amounts to 700 million.
Geox also screwed up (-15%) after the downward revision of the estimates. Banca Imi has reduced its opinion on the stock from hold to reduced, with a target price of 2,9 euros. Analysts cite the stock's strong relative performance, up 44% in 12 months. Banca Akros also downgraded the share rating from accumulated to neutral. After the accounts, Aedes also retraces (-9%), one of the protagonists of the rally in real estate securities.
FALCK RENEWABLES BUCKS THE TREND
Falck Renewables went against the trend, up 2,5% to 1,488 euros. The company has raised its Ebitda estimates for 2017, originally forecast in the range of 132-136 million, thanks to the favorable trend of the partial results for the period. The new forecast is "not less than 138 million".
