It is difficult to find a key to understanding the flood of budget data that rained down on the markets yesterday. It can be said, however, that the global economy appears to be in good health, supported by the latest flash of expansionary monetary policies, both in the euro area and in the USA. In September, when the Fed should begin to tighten the shirts of the institution's balance sheet, things could change. Or maybe not, given the difficulties that Donald Trump continues to encounter. The fall of the dollar has slowed down German exports, Italy consoles itself with the lower cost of debt.
The surprise comes from Amazon's half cold shower: only 197 million profits in the second quarter. But behind the balance sheet figure there are massive investments which should, in Jeff Bezos's intentions, promote Amazon's leadership from e-commerce to the offer of services and entertainment. A new frontier for the great enemy of Donald Trump who yesterday via Twitter defined the Washington Post, revitalized by the cure of Bezos, "the first workshop of false news". However, the president does not bode well for the little bird: yesterday Twitter lost 14,1% on Wall Street. Advertising continues to ignore tweets, despite the exceptional testimonial.
JAPAN, MORE JOB VACANCIES THAN REQUESTS
The slowdown in technology stocks blocked the progress of the stock exchanges. In the meantime, the dollar recovered, traded at 1,167 against the euro, from 1,173 the day before.
The Asian stock markets closed in negative ground, but for the Asia Pacific index the balance for the week remains positive. Technology stocks are under pressure, starting with Samsung (-3,5%). The Nikkei index fell in Tokyo (-0,6%) despite positive indications coming from the consumption front +0,4% and the new, unexpected drop in unemployment: the supply of new jobs is equal to the request (1,01). It is the first time for 43 years, but the "hunger" of workers has not yet translated into salary increases. Hong Kong shows a drop of 0,7%, while the CSI 300 index of the Shanghai and Shenzen stock exchanges is slightly above parity. Samsung's -3,5% depresses Seoul's Kospi index, down 1,6%.
The Morgan Stanley index, calculated on the capitalization of the main 47 stock exchanges on the planet, set a new all-time high yesterday with an increase of 2,8%. It was the ninth consecutive month of gains, the longest streak since 2003/04.
VERIZON (+7,7%) DRAG THE OLD ECONOMY TO NEW BESTS
Seat in red also for the US markets. But not for everyone. The Dw Jones index +0,39% driven by the TLCs (Verizon +7,7%) and by Boeing (+2,8%) marks a new record at 21.796,55 points. The S&P 500 is lagging -0,10%. Sensitive drop in the Nasdaq (-0,63%). A positive sign came from durable goods orders up 6,5%. The GDP data for the second quarter will be published today: the forecast is for an acceleration to 2,6% from +1,4% in the first three months of the year.
A negative signal came instead from Dow Jones Transportation, the traditional thermometer of the state of health of the real economy. The index fell 3,1% following disappointing forecasts by UPS for the latter part of the year. Another alarm signal: despite the good performance of Facebook + 2,9%, the technology sector closes in the red. Profits were taken by Apple (-1,9%) and Nvidia (-3,3%), falls of more than 1% by Alphabet and Microsoft.
BEZOS IS THE RICHEST MAN IN THE WORLD. BUT ONLY FOR ONE HOUR
Attention was focused on Amazon accounts, which exited after the closure. The e-commerce giant reported revenues of $38 billion in the quarter, exceeding analysts' estimates (37,18 billion). But profits fell far short of forecasts: $0,40 per stock versus $1,42 expected. After the Stock Exchange, the stock lost 2,7%. Capitalization, which rose during the day to 503 billion dollars, slipped below 500 billion at the end. As a result, Jeff Bezos, who was the richest man in the world for a few hours, dropped back to second place behind Bill Gates.
Despite the recovery in oil prices (Brent at 51,35 dollars a barrel) the stocks of the sector retraced: Eni, in view of the results, lost 0,3%, Saipem - 0,81%, while Tenaris left the land 1,31%.
MILAN AND MADRID PUSHED BY ACCOUNTS, FRANKFURT HOLDS BACK
An avalanche of company data, the most numerous of the year, hit the European stock exchanges yesterday. Milan closed up 0,26% at 21.634 points in line with Madrid. Modest reductions for London (-0,12%) and Paris (-0,06%); weaker Frankfurt (-0,76%), folded by sales on Deutsche Bank. The best stock exchange was Zurich (+0,31%), thanks to Roche's accounts (+1,2%).
NESTLÉ CONFIRMS THE SALE OF CAKES IN THE USA. FERRERO LURKING
Nestlé -0,97% after CEO Mark Schneider said he expected a full-year increase "at the low end" of the +2-4% target. This is how the sale of the confectionery sector in the USA in which Ferrero is interested is approaching. “We have seen significant interest in our business from both strategic and financial buyers – said Schneider – our clear priority is a direct sale of the assets”.
SPREAD AT 152, LOWEST SINCE DECEMBER. BTPs AT AUCTION TODAY
Positive closure for the bond markets of the Eurozone. Italy, on the day of the Bot auction, was no exception. The Italian 2,09-year rate fell to 2,12% from 156% at the end of yesterday's session, while the spread with the same maturity of the Bund decreased slightly to 157 basis points from XNUMX.
While awaiting this morning's appointment with the medium-long term auctions, the BTPs travel just below the highs seen during the week, when the 10-year rate fell to 2,03%, its lowest for about a month, and the Bund spread at 152 bp, the lowest level since mid-December.
Today's placements - the last in the medium-long term between now and the end of next month, given the usual cancellation of the mid-August auctions - include the launch of the new 5-year BTP August 2022 with a 0,90% coupon and the reopening of the ten BTPs in August 2027 and the CCTEU in October 2024, for a total supply of up to €7,75 billion; at the same time, over 22 billion Italian paper expires.
On the MTS gray market, the new five-year bond traded at a yield of 0,91% at the close of the trading session against 0,77% of the current April 2022 benchmark, coupon of 1,2% and 0,81% of the five-year auction at the end of June .
MACRON'S BLITZ SINKS FINCANTIERI. BUT THE NAVAL BATTLE CONTINUES
The Piazza Affari session was dominated by the reactions to the quarterly reports. But attention was also attracted by the France-Italy duel.
Fincantieri (-2,61%) loses new blows after the blitz by Emmanuel Macron. Paris has announced its intention to exercise the right of pre-emption to acquire the shares of Stx France which it does not own. French Economy Minister Bruno Le Maire announced that he will travel to Rome on Tuesday to attempt a solution to the case. But Italy, after rejecting the proposal for a 50-50 split of the capital in recent days, is asking for the previously agreed conditions to be respected.
QUARTERLY. MONCLER AND MANAGED SAVINGS IN THE LEAD
Among the quarterly most appreciated by the market, some champions of Made in Italy stand out. At the top of the standings is Moncler (+5%): the quarterly report beat expectations, both in terms of revenues and profit. Goldman Sachs has raised the target price of the stock from 25 to 25,6 euros, confirming the buy recommendation after the accounts.
Close behind is Yoox Net a Porter (+3,2%), supported by expectations on the results that will be published on August 2nd. Also in favor of the company is the news that the advocate general of the European Court of Justice has established that companies in the sector will be able to prohibit physical partners and distributors from selling online through agreements with "popular" platforms such as Amazon and eBay.
No less brilliant was the asset management team driven by accounts showing strong improvement: Azimut Holding +3,1%, Banca Generali +2,8% and Banca Mediolanum +2,6%. Fineco Bank was also positive (+1,6%).
The sharp fall of Deutsche Bank (-6,48%) did not weigh on the banks. In the second half of the year, the institute recorded revenues down to 6,6 billion euros, while the profit of 446 million beat expectations, thanks to cost cutting. Profitability, while improving, is still below long-term aspirations, according to executive director John Cryan.
In Milan, Bper Banca +1,5%. Unibelieve
FCA, PROFITS RISE, SALES STALL. FERRARI STILL RECORDS
Countered the car. Ferrari is still progressing (+1,8%) pending the board of directors on the quarterly report (set for 2 August). Fiat Chrysler (-0,1%) closed slightly after the results of the second quarter. Turnover drops to 27,9 billion euros against 28,7 billion estimates, but profit before financial charges rose by 16% compared to 2016 to 1,9 billion euros (estimates were 1,8 billion) , thanks to the doubling of sales of the Maserati division following the creation of the new SUV. Earnings growth quadrupled as performance in Europe offsets 1,7% decline in US earnings. In the first half, demand for the automotive market in the United States fell by 2,2%, and Fiat sales decreased by 6,9%. In contrast to the results obtained in Europe, where there was an 11% growth (compared to the sector's growth of 8,2%). CEO Sergio Marchionne underscored his goal to eliminate all of the company's debt before his retirement in 2019. Net industrial debt decreased to $4,23 billion (from $5,11 billion in March), a figure that is expected to fall to 2,5 billion by the end of the year.
Brembo turned down in the final stages to 13,26 euros. In the first half, revenues rose by 10,1% year on year to €1,26 billion, +8% on a like-for-like basis. Profit at 136,7 million, +7,6%. Ebitda grew by 12,8% to 255 million euros. Debt at the end of June at 259 million, from 226 million euros at the end of March. The company declares itself cautiously optimistic about the second part of the year.
THE RECORDATI LIFT SWITCHES OFF
Two-faced session for Recordati (-0,22%). The stock cleared more than three gain points that had pushed the price up to 37,34 euros. The closing is just below parity at 36,02 euros. The pharmaceutical group closed the first half with an increase in net profit of almost 20% to 147 million. Ebit up 19,4% to 203,2 million. The management has improved the estimate of net profit for the whole of 2017 to 290-295 million (from the previous 275), that of operating profit to 400-410 million, Ebitda to 450-460 million and revenues to 1.290-1.300 million. The net financial position as at 30 June 2017 shows a debt of 356,3 million which compares with that of 198,8 million at the end of December.
Brilliant Molmed (+2,42%) after signing yesterday a licensing agreement for an anticancer drug and today an agreement for the development of CAR-T products.
After the stock market closed, the results of several blue chips were announced. Enel (+0,66%) approved the accounts at June 30 which close with a group net ordinary income of 1,809 billion, up 3,8% on the 1,742 billion recorded in the first half of 2016. In the conference call with the analysts the CEO Francesco Starace explained that he is totally against a merger between Open Fiber, controlled together with Cdp, and Telecom Italia, which would be completely useless. In the meantime, Open Fiber is going ahead with its work and "next week the contracts for the credit lines for around 500 million will be concluded with three banks to carry on investments in the fiber network".
Prysmian (+1,19%) closed the first half with revenues and profit down, Ebitda up, confirming the guidance on 2017 adjusted Ebitda, but leaking optimism about achieving a margin at the top of the range. Revenues recorded an organic decline of 1,5% to €3,936 billion. The company confirmed its year-end adjusted EBITDA guidance.
Telecom Italia unchanged. The company has approved the expected accounts, the latest legacy of the Cattaneo management. The half-year closed with a double-digit gross margin and the domestic division achieving the best growth ever. In the first half, Ebitda rose by 10,4% to 4,1 billion, revenues by 7,4% to 9,8 billion, the domestic business unit reported an increase in revenues of 3,4% and Ebitda by 5,6%. In the second quarter revenues amounted to 5 billion, up by 6,4%, Ebitda was equal to 2,1 billion, +5,5%. The proxies of the outgoing CEO, Flavio Cattaneo, were temporarily given to the executive president Arnaud De Puyfontaine, with the exception of those on security and Sparkle, which went to the vice president Giuseppe Recchi.
