The West, not just Italy, is holding back. Emerging economies are saving world growth. This is the unequivocal verdict that emerges from the IMF's autumn report. It is not just a question of the economic situation, underlines the chief economist Maurice Osbstfeld, but the combined effect of many critical issues, both political (Brexit, electoral uncertainty in the USA, the advancing shadow of protectionism) and financial (excess debt, non-performing loans, slowdown in investments).
Nothing new, but the result is heavy: the USA, the main engine of growth in the first part of the year, slows down by 1,6% against the 2,2% estimated in July. The same goes for the other countries in the OECD area, with the negative exception of Italy which stops at 0,8% (0,9% next year). Despite this disappointing performance, global growth is confirmed at 3,1% for this year. Thanks to Emerging Markets (+4,2% overall) starting from the boom in India (and Indonesia) and the recovery in Brazil and Russia (ruble at its 13-month high).
ABSOLUTE DESCENT OF GOLD
More than from the analysis of the Monetary Fund, however, the Stock Exchanges were conditioned yesterday by the storm on the pound and by the decline of the yen against the dollar which has also recovered positions against the Euro, to the benefit of the Stock Exchanges of the Old Continent grappling with the problems of banks. In the evening, the good mood was marred by news relaunched by Bloomberg: within the ECB, according to anonymous sources, the decision is maturing to reduce the purchases of securities (10 billion less per month), before the expiry of the Quantitative Easing March. The reaction of the markets was immediate: the euro strengthened against the dollar in the final session to 1,121 from 1,115, where it had fallen yesterday on the assumption of an increase in US rates.
Gold was the downside protagonist of the day. It closed down 3,4% to its lowest level since late June. The hypothesis of a rise in US interest rates diminishes its capacity as a safe haven.
THE US RATE RISE IS NEAR. GOOGLE CHALLENGES THE IPHONE
Asian stock markets in positive ground: Tokyo, stimulated by the fall in the yen, rises by 0,5%, Hong Kong +0,6%. The activity continues at a reduced pace in the absence of Chinese price lists, which are closed for the whole week for holidays. US stocks were weak, in the red for the second consecutive session: Dow Jones industrial -0,47%, S&P 500 -0,5%, Nasdaq -0,21%.
The words of Jeffrey Lacker, chairman of the Richmond Fed weighed heavily on the US markets: “If I had voted at the last meeting of the FOMC - said the banker who is not part of the committee that votes on rates - I would have voted for an increase in the cost of money. Rates should already be at 1,5%”, that is, one point up.
According to Thomson Reuter projections, the quarterly season that will begin in the coming weeks will be poor: profits should fall by 0,5%. Meanwhile, Alphabet (+0,30%) yesterday launched the challenge to Apple (+0,48%): the Pixel line, the first series of smartphones created under the Google brand, was presented in San Francisco. The goal is to create an alternative system to that of the Apple. At the heart of the new product strategy is the use of the voice which will activate a series of services based on artificial intelligence.
Oil stocks soared on the heels of the rise in crude oil. Brent crude advanced by 0,4% to 51,1 dollars a barrel, after yesterday's progress of 3,7%. Wti stable at 48,8 dollars. In Milan Eni marks an increase of 0,6%. Mozambique's state company, Enh, announced that it has signed an agreement with BP and Eni for the sale of liquefied natural gas (LNG) from the South Coral field, good news for the Italian company which is the operator in charge of the project . Saipem +1,9%, Tenaris +1,5%.
MILAN +0,21%, LONDON AT THE HIGHEST FOR 20 MONTHS
Positive day for European equities, which closed sharply higher on the wave of the rise in the dollar and the landslide of the pound that gave wings to the City. This morning, however, a downward opening is expected: London -0,7%. The weakest market yesterday was Milan, with an increase of 0,21%, ahead of Madrid (+0,37%).
The many declarations regarding the state of health of the credit system also held back investors on peripheral listings. According to David Bergman, a senior analyst at Moody's, the risky loans accumulated by the banking sector in Italy, Spain and Ireland weigh not only on the balance sheets of institutions but also on the real estate market and on the availability of credit. The rating agency pointed out that around 50% of the NPLs in the bellies of European banks, or 527 million euros, derive from these three markets: Italy, Spain and Ireland.
More toned Paris (+1,29%) and Frankfurt (+1,18%). Noteworthy in the German list is the decline of Lufthansa (-2,4%): Ryanair has announced that it will open 10 new routes from Hamburg by the summer of next year. The American broker Raymond James lowered his recommendation to Underperform, with a target price of 9 euros. Deutsche Bank recovers (+2,2%), while the price of CDSs, derivative instruments used to protect themselves from default, falls by 3% While awaiting news on the 14 billion dollar fine, the group has defined an agreement with the German trade unions to lay off a thousand employees.
London was once again the most effervescent stock market yesterday under the pressure of the drop in the pound (to its lowest level in 30 years): +1,96%, the highest since April 2015.
RECORD DEBUT OF THE 50-YEAR BTP: YIELD AT 2,85%
Excellent debut of the BTP at 50 years old. The Treasury has collected orders for over 18,5 billion against a yield of less than 3% against the slightly over 7 billion and 10 billion of requests received respectively from Madrid and Paris for similar operations. The rate was set at 52 basis points above the March 2047 BTp, which at 14 pm yesterday yielded 2,33%. The yield on the 50-year bond should therefore be around 2,85%.
Stimulating the economy to achieve growth of +1% in 2017 is an "ambitious but achievable goal". Thus the Minister of the Economy, Pier Carlo Padoan, replied to the doubts about the Bank of Italy. However, the Monetary Fund has forecast an increase of 2017% for 0,9.
BREMBO SUPERSTAR. THE TITLES OF THE CAR IN POLE POSITION
The best performing sector on the European stock exchanges was the Automotive sector (Stoxx +2%). In great evidence Peugeot (+3,1%) and BMW (+3,3%) promoted by Exane BNP Paribas from Nneutral to Outperform (target 87 euros). The broker is convinced that the house will compensate for the expected decline for 2017-18 thanks to the bright prospects in emerging countries and a softer impact in the post-Brexit. Daimler +2,6% and Volkswagen +1,4%.
The increase of Fiat Chrysler was more modest, rising by 0,6%: the group's sales in Italy in September grew by 20,5% on an annual basis, with a market share rising to 29% from 28,3%.
In great evidence Brembo with an increase of 1,6% and marks the new historical record: tomorrow the company from Bergamo will take the place of Italcementi in the FtseMib index.
BANKS, ACCELERATE BPM IN VIEW OF THE DUEL AT THE SHAREHOLDERS' MEETING
The Italian banking sector is still under tension, down by 0,1% against a 1% rise in the European index. The sector discounts by the way the uncertainties about the sale of the four Good banks born from the rescue of Etruria, Banca Marche, Cariferrara and Carichieti.
Yesterday the board of Ubi, unchanged, reaffirmed the bank's position in the face of the conditions set by the ECB.
Bpm came to light (+2,2%), as the mid-month meeting for the merger approaches which should see a high turnout of shareholders. Although the outcome of the vote still remains uncertain due to the opposition of retired shareholders, several analysts are betting that the merger can be approved. The betrothed Banco Popolare earns 1,5%.
Unicredit sells about 1%. Credit Suisse analysts remain cautious on the stock awaiting the plan while they include Intesa (+0,1%) among their favorites as the "core business is very profitable both in terms of banking and wealth management".
Mps is doing worse, at the bottom of the FTSE Mib with around -1,4% despite the extension until January 5 of the ban, which otherwise would have expired today, on net short positions on the stock.
In asset management, Banca Mediolanum (+1%) and Azimut (+1,9%) rose.
Generali slips down by 0,25%, Unipol +2%.
LVMH LEADS LUXURY STOCKS
The luxury stocks advance in the wake of thepurchase by Lvmh +0,5% of 80% of the German Remowa, historic manufacturer of aluminum trunks and suitcases is 640 million with a multiple of 1,6 times the EV/sales, at a discount on the valuations of luxury companies: Ferragamo +1,6%, Tod's +2,7%, Moncler +1,9%, Yoox +2%.
Weak utilities: Terna -1%, Snam -1,1%, Atlantia -0,8%. Note the leap of Cairo Communications (+7,18%).
