SPECULATION PUNISHES THE UNCERTAINTIES OF GOVERNMENTS
ITALY BLACK SHIRT, EU AND US BUDGET UNDER FIRE
Milan black shirt, with a drop of 3,96 percent. Followed by Madrid, the other targeted country, with a drop of 2,69. Then, in line, Paris (-2,71%), Frankfurt (-2,33%), Amsterdam (-1,85), Athens (-3,48%) up to London (-1,03%) and Wall Street where the Dow Jones closed at -1,20%. Then it was the turn of Asia: Hong Kong's Hang Seng fell by 1,99%, Tokyo fell by 1,44%. The big exporters like Sony (-2.9%) pay the highest price, which places a fifth of its production in Europe. The euro in Tokyo is worth 111,68 yen this morning, the lowest since March 18. In short, the tsunami of distrust spared no one, while the rescue teams, i.e. governments and institutions, were struggling to set up a network of aid.
In Italy, the epicenter of the crisis, the financial package will only take shape today, despite Angela Merkel's drastic invitation to Silvio Berlusconi to act quickly. And in the climate of uncertainty, today's auction on Bots and, above all, the appointment on Thursday 14 with the offer of 5 billion BTPs take on a dramatic flavour. Meanwhile, in Brussels the finance ministers are not getting out of the impasse on Greece: having discarded the French plan which involved the banks in rescuing Greece, the German thesis of a partial default by Athens has once again become topical, which provides for the partial repayment of the bonds of state. Complex negotiations, which risk lasting for months: too long to prevent speculation from dragging the public debt of sovereign states to the bottom, starting with Italy, the most widespread public debt on the planet in international portfolios after American bonds. Meanwhile, in the US, the budget negotiations are taking on no less dramatic tones.
ALCOA OPENS THE ACCOUNTING SEASON WITHOUT SURPRISES
WALL STREET, DOWN, FEARS OF CONTAGION FROM EUROPE
The most terrible day for the financial markets in recent years ended with a new, albeit small, disappointment: Alcoa, the aluminum multinational which traditionally opens the quarterly season on Wall Street, closes the second quarter with profits of 32 cents per share, slightly lower than the previous estimates, 33 cents. CEO Klaus Kleinfeld also said he was confident about the aluminum market prospects, thanks to the resilience of the Chinese market: at this rate, demand will grow by 12 percent this year and will double in 2020. But, for the moment, it prevails the feeling that the accounts of the companies, this time, will not reserve big positive surprises, sufficient to counter the rampant pessimism on both sides of the Atlantic. Estimates, moreover, suggest that, based on second-quarter profits (13 percent on average) the Wall Street stock market will be worth 13,5 times profits, or at least 7-8 percent below average.
A clear sign of undervaluation but which, in these days, does not trigger buying currents. During the week, however, the numbers of bankers are expected, such as JP Morgan (Thursday) and Citigroup (Friday), and those of the king of Internet search engines Google (Thursday). negative: the Dow Jones lost 1,20% to 12.505,54 points, the Nasdaq 2% to 2.802,62 points, while the S&P 500 lost 1,81% to 1.319,50 points. Meanwhile, the debt problem is becoming more and more pressing: President Obama has called for an agreement on the debt ceiling "in 10 days", i.e. by July 22, to leave Congress the technical time to raise the legal debt limit by August 2, when without a definitive agreement the United States could default. But the fear is that, even earlier, the S&P's agency will implement the threat already aired by lowering Washington's triple-A rating.
EURO, STOCKS AND GOVERNMENT SECURITIES, BTP/BUND SPREADS
THE MILAN STOCK COLLECTION OF NEGATIVE RECORDS
Meanwhile, Italian finance is celebrating the day of negative records, the one that wiped out the stock market gains since spring 2009. In short, Piazza Affari returned to the dark days after Lehman Brothers, with the FtseMib index down by 3,9, XNUMX%. But it is not only Piazza Affari that is suffering, it is the whole of financial Europe that is reeling under the blows of a wave of sales that affects all the stock exchanges of the continent and Italian public debt securities, the most liquid and the most significant in terms of value absolute (the stock of Italian public debt is in first place in Europe together with German debt).
The war bulletin shows that: 1) The euro fell 1,6% against the dollar to 1,402 (from 1,4265 on Friday night). The Swiss franc shot up to 1,1715 against the euro (+1,8%), a new all-time high. 2) Gold also rose to 1.546 dollars an ounce (+0,1%) and to 1.108 euros, a new all-time high for quotations in euros. 3) The yield on the 43-year BTP rose by 5,68 basis points to 17%. The yield on the 2,65-year German Bund fell 4 basis points to 10%. In order to feel safe, investors choose the German government bond that yields as much as inflation. 304) The yield spread between XNUMX-year BTPs and Bunds continues to widen until it reaches a new record: the yield differential between XNUMX-year BTPs and Bunds, on the Tradeweb platform, is XNUMX basis points.
A real descent into hell: last Friday the spread had risen to a peak of 248 basis points, with a closure at 245 bps. The previous Friday, i.e. July 190st, it was at 4 bp. The most evident effect of this situation is the recovery of the dollar or the crisis of the euro as an alternative to the dominance of the US currency: the main houses specialized in currency trading have issued the same verdict, at the request of Bloomberg: for the dollar, the worst is over. Compared to the lows of May 6, the US currency has recovered XNUMX percent.
DANIEL GROS: "ITALY IS NOW EXAGER"
BINI SMAGHI: "COUNTRY TOO RICH TO FAIL"
“Of course, Italy has problems. But this reaction is undoubtedly exaggerated” points out Daniel Gros, director of Cerps from Brussels. Of course, the economist points out, the situation in the peninsula is becoming increasingly precarious, in view of the debt maturities. But for the rest of 2011, starting with today's Bot auction, the situation still seems to be under control. Another note of optimism comes from Lorenzo Bini Smaghi, member of the directorate of the ECB: "Italy is a rich country, it will never fail". Meanwhile, George Soros, suspected by many of being part of the platoon of financiers who are putting the stability of the euro at serious risk, has dispensed a "lesson" from the columns of the Financial Times.
Europe, he writes, needs a plan B which consists of: a) a piloted default by Greece; b) the massive use of Eurobonds and a continental deposit insurance scheme. It is essential that the elites of the Old Continent commit themselves in this direction. By mobilizing pro-European public opinion, without however remaining stuck in the principles that gave birth to the single currency. "An open society must not consider treaties as untouchable taboos. If a solution proves ineffective, the register can be changed". In the meantime, while meetings and proposals multiply, the crisis worsens.
INTESA AND UNICREDIT AT 2009 LEVELS
BLACK DAY FOR ALL BLUE CHIPS
In the Stock Exchanges everything or almost everything has gone down. In Europe, the greatest losses concerned insurance companies (European Stoxx of the sector -3,6%), the car industry (-3,1%) and banks (-2,8%). In Milan Intesa lost 7,7%, Unicredit 6,3%, The third big player in Italian finance, Generali, 4,6%. The only stock that rises is Fonsai which rebounds after four consecutive downward sessions in which it lost 26%. Since the beginning of the year, the decline is 42%. This morning Deutsche Bank cut its target price to 2,5 euros from 7,2 euros to incorporate the impact of the 450 million euros capital increase. The useful period for the negotiation of subscription rights closed last Friday. The rights are exercisable until July 15th. The capital increase provides for the pre-emption offer to shareholders of two new ordinary shares at 1,5 euro for each old share held.
For the rest, the negative records are wasted: those of Mps, at their lowest for 5 years (-4,48% to 0,49, the same value as June 28) or of Bpm, at the new historic miniman at 1,42. Only Mediobanca, despite a decline of 4,28% to 6,15 euro, returned to the levels of August 2010 and still remains, the only exception, above the lows of March 2009. Financial stocks also suffered in France and Germany : French banks BnpParibas and SocGen are down 6,7% and 5,7% respectively. Axa insurance lost 6,5% and Germany's Allianz closed down 4,1%, while Deutsche Bank was also heavy, down 3,4%. Black day for all the blue chips, Fiat fell by 5,3%, Finmeccanica by 2,2%. Enel is also down by 4%, Eni is down by 2,7%.
RESTORATION, STROPPIANA'S OFFER FOR SANTA GIULIA
GOOGLE RENEWS CONTRACT WITH SEAT (+6,63%)
On the day of the great crisis, a breath of fresh air for two companies at risk. Yesterday Seat shares had a tear upwards thanks to the news that Google has renewed for the next two years the contract that allows Seat to be the authorized reseller of Adwords, the program that allows companies to promote their products and services on Google.
Negotiations continue for Milano Santa Giulia, one of Risanamento's main real estate assets, with the consortium led by Stefano Stroppiana who deemed it possible to attribute to the area, free of seizure and gross of reclamation costs, the value of 850 million euros that can be increased up to 1,2 billion. He said it in a Risanamento note, stating that in today's board of directors, the CEO Claudio Calabi illustrated the contents of the offer of the consortium led by Stroppiana presented on 30 June last. "The proponent, following the due diligence activities, deemed it possible to attribute to the Milan Santa Giulia area, free from the seizure that currently persists on the real estate complex and gross of reclamation charges - the value of 850.000.000 euros , which can be increased up to the maximum amount of 1.200.000.000 euros if certain conditions are met”, reads the note. Furthermore, according to the board of directors of Risanamento "the willingness of the proposing party to continue the negotiations emerges".
