GERMANY AND OIL BEND WALL STREET. MOODY'S RATING ARRIVES FOR ITALY AND FRANCE
Wall Street's optimism lasted the space of one session. Yesterday US price lists plummeted. The fall in German exports -5,8% in August was the trigger for the decline: it is the third negative data arriving from the locomotive of Europe in three days.
The most sensational consequence was the collapse of the crude oil price dam, under the pressure of lower consumption and abundant supply: crude oil, in free fall, slipped to 84,77 dollars in the US session; in London, Brent closed at 89,24 dollars a barrel. Within two months, prices fell by 20%.
Sales affected all markets including Tokyo (-1,2%). On Wall Street, the Dow Jones suffered a 2% loss, along with the Nasdaq. The Standard & Poor's 500 did worse -2,1% which moves away from 2,000 (1.928,21). After Wednesday's jump (the biggest gain of the year), all ten sub-funds of the S&P index closed in the red, as did all thirty stocks of the Dow 30.
Retail stocks fell (Gap left 12,7% on the ground), coal stocks plummeted, dragged down by crude oil, now in free fall: Exxon and Chevron show a 3% drop. Volatility is surging again: the Vix, or fear index, has risen by 24%. From February lows. The dollar falls to 1,2687 against the euro, gold climbs again (fourth day of rise), to 1.229 dollars an ounce (+0,7%).
PLAZA AFFAIRS BLACK JERSEY OF EUROPE. AND THE IPOS JUMPED
The US landslide represents a heavy mortgage for today's session of the European lists, already grappling with a very delicate appointment: tonight Moody's ratings will be announced on Italy and France, the two special observations of the eurozone.
Yesterday the London Stock Exchange closed down by 0,7%, Paris -0,6%, Madrid -0,6% Frankfurt +0,2% was the exception, the only positive list despite the bad news coming from the economy real. Piazza Affari led the decline of the Old Continent with a drop in the FtseMib index of 1,3%.
To underline the negative moment came the second renunciation of the listing in a week: after Italiaonline, Intercos also withdrew the IPO.
DRAGONS TO GOVERNMENTS: EITHER THE REFORMS OR GO HOME
EU governments must carry out structural reforms and act against unemployment or they will be sent home. Mario Draghi's ultimatum resounded yesterday at the meeting of the Monetary Fund, dominated by increasingly dramatic echoes: fear of Ebola is growing, after the first victims in the West (the financial cost for West Africa can reach 40 billion dollars , 4% of the area's GDP, according to the World Bank), geopolitical risks are increasing.
In this framework, European governments must act, underlines the director general of the Fund, Christine Lagarde who has launched an invitation to the ECB for various new and more effective stimuli to support growth in Europe. Draghi's response is ready: the central bank is ready to leverage extraordinary tools, but now it's up to governments to move quickly. The only positive fact, according to the ECB president, lies in the fact that EU governments have understood that if they don't bring the economy back to growth and reduce unemployment to record levels, they will disappear from the political scene because they won't be re-elected.
BOT AUCTION TODAY, BTP YIELDS LOW
It is in this turbulent context that the Treasury is preparing to launch the first of the October operations this morning, pending the BTP Italia scheduled for 220 October. We start with the 12-month Bot auction for an amount of 8 billion, less than the securities maturing (9,7 billion). But this is not the only region of optimism.
Yesterday, thanks to the stock market crisis, the race for Treasuries and Bunds intensified, which infected other European government bonds. The Spanish ten-year rate updated its record lows to 2,03% and the Italian one touched the lows reached in early September at 2,26%, falling to 2,27%.
HEAVY BANKS. IN SIENA THE NEW SHAREHOLDERS ENTER THE BOARD OF DIRECTORS
The heavy losses of the banks are at the origin of the negative performance of Piazza Affari, the worst in Europe. Evil the Bigs: Unicredit lost 2,1%, Understanding -2,9%. They do worse Where's Banca -4,3% and Pop.Milan -3,4%.
Mount Paschi +0,2%. Yesterday the representatives of the new members of the syndicate pact finally entered the board of directors: Roberto Isolani (Btg Pactual) who will take the place of Marco Turchi in the MPS executive committee, while David Martinez Guzman (Fintech Advisory) will be part of the nomination and remuneration. Both will sit on the control and risk committee.
Among financial companies, Mediolanum drops by 2,8%, Azimuth -2,3%. The data published today by the Bank of Italy show that in August the demand for credit remained very low, total loans fell by 1,2% year on year, from -1,3% in July. Both the business segment (-1,4%) and the household segment (-0,9%) are down.
FIAT
Fiat -2,1% is preparing to make its debut on Wall Street in a difficult moment. Also for this reason JP Morgan lowered the target price to 8,0 euro from 8,90 euro, confirming the Neutral rating. The Lingotto has confirmed that it has chosen not to place the shares resulting from the withdrawal of the FCA merger on the Stock Exchange. The shares will remain in the company pending the results of Sergio Marchionne's road show among overseas investors.
Meanwhile, the buyback operation of the Exor 2017 bond, coupon 5,375%, closed with subscriptions and buybacks for 238,6 million euros, compared to the 690 million outstanding. The purchase price was 112,791. Among other industrial companies it defended itself StM, unchanged,
The other titles are heavy: Prysmian -2,7%. Finmeccanica leaves the subsidiary 3,6% on the ground Ansaldo sts -2,2%. The crisis in crude oil prices weighs on energy values but also on utilities, which risk having to rough up forecasts on margins and turnover. Eni drops by 0,7%, Enel -0,3%. T is bad tooelec Italy which closed down by 2,3% to 0,832 euro after reaching intraday lows of 0,8165 euro.
ADVERTISING OVERWARDS THE MEDIA
Chapter of Mediaset which lost 5,2% after the negative data on advertising revenues in August (-11,3% on an annual basis). Mondadori -4,78%, Rcs -2,46%, L'Espresso -1,82% are down. Class also decreased -3,58% while Caltagirone publisher held -0,49%.
AUTOGRILL AND WDF, THE LANDSLIDE CONTINUES
in luxury, Luxottica rose by 0,6%: Deutsche Bank raised the target price to 47 euros from 46,6 euros, confirming the Buy rating. Tod’s drops by 0,6%, Ferragamo -2,8%, it fell Yoox -3,8%. The landslide continues Rest e World Duty Free which decrease by 3,6% and 3,1%.
