A buying opportunity or the beginning of the end? Capital managers are asking this a few hours after the announcement of Fitch's rating on Italy which comes after the BTP auction from which conflicting signals have arrived: spreads on the rise, but also a strong demand for Italian paper. As usual, the tension was transmitted to the banking sector, down 17% since the beginning of the year, again at prices on balance: the sector is traded at 0,65 times book values, less than half of US banks (1,34 times). The fragility, of course, derives from the growth of BTPs in the portfolio: 76 billion for Banca Intesa, 54,5 for Unicredit. But also by the low rates (even after the closure of the Qe) which make it difficult for institutions to recover profitability.
TRUMP THREATENS TO LEAVE WTO
This is not the only dilemma agitating the markets on the eve of the long weekend of US finance (Wall Street will be closed on Monday for Labor Day). Donald Trump, furious because in these days the US scene will be occupied by the funeral for John Mac Cain, the hero who despised him to the last, has re-launched the challenge on duties: "If they don't intend to change, I will let the United States from the WTO” thundered against Europe because “an agreement on the car is not enough to rebalance relations with an area that is as hostile to us as China” against which, as early as Tuesday, it will raise duties on 200 billion of goods.
ARGENTINA, RATES AT 60%. Türkiye AND BRAZIL IN THE SIGHT
Meanwhile, the collapse of emerging currencies is taking place, overwhelmed by the rise of the dollar and the liquidity squeeze imposed by the Fed. They are suffering more than all the countries most indebted to dollars, starting with Argentina, which raised rates to 60% in attempt to buffer the flight from the peso (-12,5% yesterday) and from Turkey (-40% since the beginning of the year). But the alarm also concerns the Indonesian rupiah as two heavyweights enter the sights: the Brazilian real, at its lowest since 2015 under fire (-10% since January) one month before the elections, and the Indian rupee, at its lowest for three years .
ASIA IN RED, AMAZON AND APPLE STILL RUNNING
There is no shortage of reasons to justify the markets' caution on the eve of the last weekend of summer.
Weak Asian markets. Shanghai -1,1% slips to the lowest level since June. Surprisingly, the PMI manufacturing index rises, but the news does not warm up the stock markets, worried by the arrival of new US tariffs.
Tokyo recovers in the final, The Asia Pacific index closes the month with a drop of 1,6%. Wall Street broke a four session positive streak: Dow Jones -0,53%, S&P 500 -0,44%. NASDAQ -0,26%.
However, Apple's race +0,9% to new highs continues after the announcement of the presentation of the new i Phones on 12 September. Amazon does even better, breaching the ceiling of 2.000 dollars per share: only 25 billion dollars separate Jeff Bezos' company from the trillion wall. Abercrombie & Fitch shoulder bag down 17,2% due to declining sales.
OIL RISES UP, SAIPEM IS GOOD
Oil on the rise Brent (+0,6% to 77,6 dollars), the highest since mid-July after the contraction of US weekly inventories.
Goes down Eni -1,3%, although it announced the acquisition of 124 exploration licenses, which include a total area of about 1.400 square kilometers, in Eastern North Slope, Alaska. Standard & Poor's upgraded its issuer rating to 'A-' from 'BBB+' with stable outlook thanks to deleveraging and solid performance.
In contrast to Piazza Affari Saipem + 0,84%.
ITALY, THE GOVERNMENT READY TO ANTICIPATE THE DEF
Argentina, Türkiye. But, above all, the sore spread. On the eve of Fitch's judgment on Italy's rating (confirmation of the Bbb rating is expected, but with a negative outlook from stable) the European markets are once again having to deal with the Italy syndrome. Thus the dollar, perceived as a safe haven, strengthens again against the euro at 1,164 (from 1,17). Meanwhile, the reassuring messages that Minister Giovanni Tria continues to send from Beijing are falling on deaf ears: "Italy is a reliable and integrated country in the Euro, it has already adopted and will adopt other measures in the name of stability".
A coup de théatre is not excluded: the government would be ready to bring forward the Def (Economics and Finance Document) to reassure investors. For now, according to the Observatory on Italian public accounts led by Carlo Cottarelli, between May and August the public budget suffered an increase of 898 million euros and mortgaged a greater disbursement for 2019 of 5,1 billion.
BUSINESS PLACE LIGHTING UP AGAIN
Piazza Affari closed in heavy declines, the FtseMib index lost 1,2% slipping to the lows of the last 15 months at 20.495 points (high at 20.781). In today's session, the value of trades rose to 1,81 billion euros, compared to 1,7 billion the day before.
It is the worst price list in Europe, where smaller losses are recorded. Frankfurt -0,54%, Paris -0,42%, Madrid -1,06%, London -0,63%, Zurich -0,46%.
The month of August is about to end with a balance sheet in deep red: -7%. A loss three times that recorded, for example, by the Frankfurt Dax (-2,3%) and not even remotely comparable to the +4% (expressed in euro) by Wall Street's S&P500 index.
FLY THE SPREAD, THE 3,25-YEAR AT XNUMX%
Tensions rise after the chiaroscuro outcome of this morning's auctions. The Treasury has placed the maximum quantity on offer but the yield on the 3,25-year BTP rises to 2,87%, from 2014% at the end of July, the highest since March 285. Spread 269 from 2013 yesterday evening, the widest level since XNUMX.
The new 5-year Btp maturing in October 2023 extracts a yield of 2,44%, up from 1,8% in July.
ONLY SIX STOCKS CLOSE WITH A PLUS SIGN
The stocks of the main basket can be counted on the fingers of one hand and ended the day in positive territory. Among these stands out Brembo +2,25% ahead of Tod’s + 1,90% Pirelli, + 0,36%, Exor +0,11% (John Philipp Elkan left the chairmanship of Partner Re), e Campari +0,13%. Complete Saipem patrol.
For the rest, deep red prevails, with investors lightening their portfolios with the widening of the Btp-Bund spread.
BANKS SUFFER, INTESA -2,4%.
The banks are above all paying the price: the Italian sector index falls by 1,7%, against 0,99% of the European Stoxx, also weighed down by the note from Moody's in which it is recalled that, between June 2020 and March 2021, the institutions will have to repay loans to the ECB for 250 billion.
The Bigs suffer, starting from Iunderstanding -2,4% (stock symbol of the Italian system), and from Unicredit -1%. It's no better for the former Popolari, starting from Bper -3,76% and Ubi -2,57%.
ARGENTINA CRUSHES TENARIS, ISTANBUL OVERWARDS ASTALDI
The list of titles under fire is long. Starting from Tenaris -5,6%, overwhelmed by the crisis of the Argentine peso. The US decision to exempt two Korean companies from duties on steel and aluminum did not help either.
The landslide of Turkey, hit by the downgrade of the Banks by Moody's has fully invested Astaldi -7,41%. The sale of the third bridge over the Bosphorus is increasingly problematic. The creditor banks would have asked for further guarantees from the company. The company denied: “negotiations are continuing - says a note - and are at an advanced stage. There were meetings between the parties in July and August with the aim of defining a binding offer in a reasonable time frame”.
TELECOM AT THE MINIMUM SINCE 2013
Telecom Italy – 2,97% at 0,57 euro has once again updated the lows of the year to levels it hasn't seen since 2013, with a much weaker performance than the European Stoxx for the sector. Thus the landslide triggered by the competition from Iliad and by the uncertainties about the evaluation of the network continues.
