“We expect new sanctions to be postponed, China will commit to purchases in the US and a negotiating table will open on patents and technology exchanges. But the gigantic distance between the parties will remain”. This is how a report by Anz, Australia's second largest bank, summarizes the market forecasts just a few hours after the opening of the G20: no illusions, but the hope that the thread of dialogue between the two Big Ones will be renewed, which is decisive for averting a recession. However, on the eve of Beijing made it known that the US veto on Huawei must be dropped, the White House replied that it will not accept any preliminary rulings. Europe is preparing for the umpteenth time to be the earthenware vase in the confrontation between the powerful in a difficult moment for democracies. In an interview with the Financial Times, Vladimir Putin argued that liberal doctrine is now obsolete because it goes against the interests of the majority of the population.
The markets are approaching the G20 with some caution regarding the key event: Saturday's face-to-face between Donald Trump and President Xi.
The Shanghai-Shenzhen CSI 300 index slows down -0,6%. Hong Kong's Hang Seng index fell by 0,6% in anticipation of the protests that could mark the weekend.
South Korea's Kospi loses 0,5%. Australia's ASX 200 index is down 0,3%.
Japan's Nikkei fell 0,5%. Trump has confirmed that he will meet with Japanese Prime Minister Shinzo Abe on the sidelines of the G-20 and expects a "major trade deal" to be announced. Dear Abe, “I appreciate that you are sending a lot of auto companies to Michigan, Ohio, Pennsylvania and North Carolina,” Trump said at the start of the talks, adding that they will also talk about Japanese purchases of US military equipment. Instead, the Japanese premier confirmed Xi's forthcoming visit to Tokyo.
Contrasted session yesterday on Wall Street: the Dow Jones flat (-0,04%), the S&P 500 index rose (+0,38%, just one point from the all-time record) and the Nasdaq (+0,73%) .
Boeing loses shots (-2,9%): other weaknesses of the 737 MAX have been identified. Ford, on the other hand, is up 2,9%, announcing cuts to 12 seats in Europe.
For the first time in 27 years, Nike fell short of analyst expectations for its quarterly profits.
Oil corrects by about half a point, WTI goes to $59,2, Brent $66,4.
The dollar consolidates on yesterday's levels against the euro, cross at 1,136.
Gold strengthens again to 1.416 dollars an ounce, +0,5%, in the week it touched the highest price since 2013 at 1.442,90 dollars.
JUNE RECORD FOR BUSINESS PLACE: +8,5%
The European stock exchanges are cautious but positive two days before the G20 summit in Osaka. A cautiously positive opening is looming for the last session of the month of June: the monthly balance sheet is very respectable. The EuroStoxx 50 is up +7%. Frankfurt Dax +6,5%. Milan gained 8,5%.
CONTE: "AGREEMENT WITH THE EU IS POSSIBLE". MILAN +0,26%
Piazza Affari, supported by the good performance of the BTP auction and by thepositive evolution of the dispute with the EU Commission, yesterday gained 0,26% to 21.110 points.
“The climate is constructive. The situation is objectively complicated but I am confident that a solution can be found,” said Prime Minister Giuseppe Conte upon his arrival in Osaka for the G20. Brussels would be ready to postpone the infringement procedure to October, then asking Italy for a strict budget law without a flat tax.
However, the latest data confirm the weakness of the economic situation. In June, the confidence climate fell again for both businesses (99,3 from 100,2) and consumers (109,6 from 111,6), after the unexpected rise in May. "The decline in consumer confidence which has held up better so far - notes Giuseppe Sersale of Anthilia - seems to indicate that the effect on consumption of the citizen's income will be ephemeral".
BAYER +9,2%, AN ASPIRIN FOR FRANKFURT
Positive Frankfurt (+0,2%), the market most sensitive to the tariff issue, is the liveliest list. But the index was pushed by Bayer's rally +9,18% in the aftermath of the board's decision to create a committee led by a US lawyer, John Beisner, to deal with the more than 13 lawsuits linked to the possible carcinogenic effects of its herbicide. The move was appreciated by the Elliot fund which announced that it owns Bayer shares for 1,3 billion dollars.
Preliminary June data on consumer prices in Germany were slightly above monthly and year-on-year estimates: +1,6% from +1,4% in May. Analysts were expecting 1,4%.
Paris slightly decreased (-0,13%). Madrid -0,14%, London -0,2.
Swedish clothing giant H&M closed the first six months of the year with revenues down 10% compared to the same period of 2018
BTP AUCTIONS: XNUMX-YEAR YIELDS COLLAPSE
The Treasury successfully placed 2,75 billion 10-year BTPs at a yield of 2,09% from 2,60% in May, the lowest level since April 2018. Bid to cover 1,32. Also placed 2,25 billion 5-year Btp at 1,34% from 1,81% at the end of May. Bid to cover 1,48 and one billion Ccteu.
After a start marked by a slight weakness especially on the long end, the Italian card has thus recovered much of the ground. "The results, positive on all three lines, offered the starting point for a further extension of the Italian paper", writes Filippo Mormando, strategist of Mps Capital Services in a note, speaking of "test fully passed" by the Treasury.
IN THE FIRST SIX MONTHS THE TREASURY HAS RAISED 235 BILLION
“In the three days of auctions – he adds – the funding for the first half of the year was completed at approximately 235 billion euro with an annual target in the 400 billion area”.
The spread with the Bund stands at 245 basis points. The 2,15-year rate is at 0,31%, the XNUMX-year Bund is at -XNUMX%.
Preliminary June data on consumer prices in Germany were slightly above monthly and year-on-year estimates: +1,6% from +1,4% in May. Analysts were expecting 1,4%.
BANKS RECOVER, UTILITIES DOWN
Positive banks. Equities continue to recover after the recent declines: expectations of further rate cuts are reduced, a scenario that does not help institutions' profits. The increases of Unicredit stand out with a leap of 2% and Ubi Banca with a growth of around 4%.
For the same reason, however, the utilities sector linked to regulated activities, such as Terna (-1,2%), Snam (-1,5%) and Italgas (-1,9%) slowed down.
“DECOTTO WILL BE HER”: ATLANTIA REPLICA AT DI MAIO
Atlantia (-0,26%) hit by the offensive of the 5 Stars, once again asking for the revocation of the concession for the subsidiary Autostrade per l'Italia, even if the opposition of the League remains. Deputy Prime Minister Luigi Di Maio said that Atlantia cannot be involved in the rescue of Alitalia, because after the revocation of the concession "it would be a broken company". “We are ready for legal action” is the reply of the company.
EXOR AND CNH SHINE, THE RUMBERS ABOUT QATAR DO NOT HELP JUVENTUS
Money on stocks benefiting from positive expectations on the US-China dispute: Cnh Industrial +0,72% and Stm +1,65%.
In the Agnelli group, Exor shines (+2,27% to 61,4 euros), also due to the successful investments in gold mines: Equita Sim has raised its target price to 77 euros from 65,45 euros. Juventus decreased (-2,83%), which certainly did not benefit from the rumors about the possible arrival among the Qatari shareholders.
CADORET (CALAN +) IN TIM. RAIN OF SELLS FOR TOD'S
Tim advances (+0,93%) on the day of Amos Genish's resignation. The former CEO was dismissed with a liquidation of 4,2 million euros. In his place, Frank Cadoret, deputy director general of Canal +, with a Vivendi stake, joins the board.
Strong sales on Tod's, down by 4,12% penalized by some downward revisions to the estimates in view of the results which will be announced to the market on August 7th. Bryan Garnier confirmed the Sell judgment, cutting the target price to 35 euros from 38 euros. Intermonte also intervened by reducing the target price to 31 euros from 32 euros, reiterating the Underperform opinion. A few days ago Credit Suisse cut the recommendation to Underperform from Neutral, target price reduced to 32 euros from the previous 38 euros.
Big hit by Coima Res (+0,8%). The company sold to Meritz Financial Group, a Korean financial holding company with a market capitalization of 1,6 billion euros and consolidated assets of 40 billion, 50% of the Vodafone complex in Milan for an amount of 44 million euros, net of the loan component. The operation values the complex at 213 million euros (at a premium of 4% with respect to the acquisition price and 2% with respect to the last evaluation).
