Italy, but not only, to stir the waters of the markets. The rise in the spread, after the debut of Prime Minister Giuseppe Conte, which obtained the confidence of the Senate yesterday, signals the concern of operators about the financial stability of the Bel Paese and consequently the euro area. As a consequence, the race for "safe havens" resumes, starting with US bonds.
But Bloomberg's indiscretion arrived yesterday evening to make the recovery of the euro possible: at the next meeting of the ECB board, set in Riga for 14 June, the members of the directorate will discuss the end of the ultra-expansive monetary policy. The announcement of the end of Quantitative Easing could already be in the press release at the end of the meeting, but even if it were not formalized, Mario Draghi should provide precise indications on the next stop to bond purchases during the press conference. The reaction of the euro was immediate, jumping to 1,172. But the end of the interventions, although widely expected, is certainly not good news for the Italian accounts.
FLYING TECHNOLOGY: AMAZON +82,5% SINCE SEPTEMBER
Once again technology has taken care of banishing the uncertainty from the price lists. The Nasdaq set a new all-time high (7.637,86 up 0,41%) while the Dow Jones (-0,06%) and the S&P500 (+0,07%) lagged. The FANG (Facebook, Apple, Netflix, Google) index rose for the fourth consecutive day, to its highest level in its history. Second record-breaking day for Apple (+0,7%), which yesterday presented its new products at the developer conference.
Twitter flies (+5%) on the wave of its entry into the index of the 500 most representative companies on Wall Street, the S&P500, up 0,1% last night. But the most impressive performance concerns the escalation of Amazon, +1,9% yesterday: in September it was worth 932 dollars per share, 8 months later we are at around 1.700. A progress of 82.5%. Not on a niche stock: on the contrary, a colossus that has gone from 450 to 820 billion dollars in capitalization in 8 months.
THE CUSTOMS WAR WEIGHTS ON THE REAL AND THE MEXICAN PESO
On the geopolitical front, just a few days after the Singapore summit between Kim and Trump, trade disputes continue to take hold. The rumors about a forthcoming US withdrawal from NAFTA, the trade agreement with the countries of Latin America, have knocked out the major currencies of the area, starting with the Brazilian real (3,81 against the dollar) and the mexican peso.
In return, there is a possible improvement with China. Washington and Beijing have reached an agreement in principle: the Chinese ZTE will be able to return to purchasing high-tech products and services from US companies, subject to the payment of a 1,7 billion dollar fine.
LITTLE MOVED ASIAN PRICE LISTS. OIL RECOVERY
Asian stock markets moved little this morning: the Japanese Stock Exchange rose by 0,2%, that of Hong Kong by 0,3%, that of India by 0,2%. The Singapore stock market was down (-0,2%) and the CSI 300 index of the Shanghai and Shenzhen stock markets (-0,2%).
Oil recovered this morning to 75,63 dollars a barrel. In Piazza Affari Saipem +0,1%; JP Morgan raises the target price to 4,30 euros from 3,80 euros, rating Overweight from Neutral. Tenaris unchanged. Eni -0,8%, Saras +2,5%.
THE EUROPEAN RECOVERY SLOWS DOWN: PMI AT THE LOWEST SINCE NOVEMBER 2016
Another day of contrasts for the European markets starting from Milan. The debut of the government led by Prime Minister Giuseppe Conte has not reassured operators either on the management of public finances or on relations with Europe. The European price lists have reacted in no particular order to the Italian case. The decline in the Old Continent's PMI indexes, which fell to their lowest since November 2016, did not help.
MILAN BLACK JERSEY RESETTS THE 2018 EARNINGS
The main index of Milan closed down by 1,18%, at 21.750 points, at the lows of the day, after reaching a maximum of 22.194 in the morning on discrete volumes (3,09 billion) but lower than those reached last week.
After yesterday's drop, the performance of the Ftse Mib since the beginning of 2018 was zeroed, from +13% in April, thus aligning itself with the rest of the Eurozone.
The other European stock exchanges are also in the red, albeit to a lesser extent compared to the Milanese list, except Frankfurt (+0,13%).
London and Madrid lost 0,7% and 0,66% respectively, while Paris dropped 0,22%
THE SENATE TRUSTS CONTE. SALVINI: THE VAT WILL NOT GO UP
In the evening the government obtained the majority: 171 senators voted in favour, 117 against, 25 abstentions. But after the trust, the statements of Deputy Prime Minister Matteo Salvini have increased, if possible, the uncertainty. The government will not allow the increase in VAT and excise duties, as envisaged by the safeguard clauses on the budget, because, said Interior Minister and Deputy Prime Minister Matteo Salvini, "we certainly were not elected to increase VAT, excise duties and taxes, and therefore VAT will not increase”. Furthermore, he added, Alitalia should not be sold, at the cost of having the State intervene.
Mario Monti's warning to the Senate sounds sinister: “It is not excluded that Italy may have to suffer what it avoided in 2011, that is, the humiliation of the troika. I sincerely hope not. Today the spread is 213 for Italy, 98 for Spain, 143 for Portugal, and this under the Qe regime. Remove that, as will soon happen, and this 213 is not enormously different from that 575 that many here remember”.
SPREAD OVER 240 POINTS IN THE EVENING AND OVER 250 TODAY
But the numbers listed by the former Premier were soon surpassed. The spread, in the last stages, has increased significantly.
Around 17,20, the 10-year Btp/Bund differential, which a week ago had widened to 324 points (the highest since May 2013), closed the session at 239 points from 216 on Monday, after a peak at 241. But this morning the spread jumped over 250 bps.
The Italian 3,20-year rate, which rose to 2,75% last Tuesday, when the political crisis seemed likely to evolve into a return to the polls perhaps already in the summer, closed the session at 2,57% from 2,77% on the previous day, after a peak at XNUMX%.
BANCASSURANCE, THE UNICREDIT-GENERALI AXIS IS BORN IN THE EAST
The banking sector weighs heavily on the stock, losing 1,7% (-1% in Europe).
Under fire Intesa Sanpaolo (-3,8%), which would be about to sell the stake in the Brebemi motorway to the F2i fund, and Unicredit (-3,5%), in negotiations with Generali (-2%). It seems they are negotiating a bancassurance alliance in Eastern Europe. UnipolSai -0,8%.
PLACES TOWARDS THE PURCHASE OF SIA. COSTAMAGNA LEAVES CDP
Poste Italiane (-2,6%) could buy 35% of SIA from Cassa depositi e prestiti. Meanwhile Claudio Costamagna has communicated the decision not to continue with a second term at the helm of Cassa Depositi e Prestiti.
Among the utilities, Enel (-1,8%) took over 73,4% of the Brazilian Eletropaulo for 1,61 billion euros. The buyer will also subscribe to a capital increase of 343 million euros. The company was bought at an 11-fold Ev/Ebitda multiple. Enel becomes the first Brazilian distribution operator.
Italgas slows down (-0,65%): Equita Sim has reduced the target price of the share to 5,2 euro from the previous 5,4 euro, to reflect the effect of the coupon detachment.
Atlantia -1,5%. Abertis has launched a private placement on 4,1% of Cellnex.
STM SUPERSTAR, BANCA IMI AWARDS FERRARI
Highlights among the industrialists: the best blue chip was Stm (+4,43%) which entered Socgen's favorites list.
The Ferrari stock (+3,14%) stands out in the Agnelli stable. Banca Imi raised its target price to 135 from 121 euros, confirming the buy recommendation. Timid recovery also for Fiat Chrysler (+0,9%) after two sessions in significant decline.
Leonardo (-0,3%) is expected to participate in a maxi tender of the United States Air Force on trainer aircraft (see turbo strategy).
Purchases on Luxury: Brunello Cucinelli (+3,3%9 and Moncler (+3,7%) mark new all-time highs.
Also noteworthy is the leap by Recordati (+3,65%) in the wake of the rally that began on 26 May.
