The economy is improving, but a cold shower is coming from the EU Commission for the Italian accounts. In the meantime, two factors contribute to holding back the European stock exchanges, including Piazza Affari. First, the rise of the euro, to the fifth consecutive rise against the dollar (to 1,175 with an increase of 0,7%, the largest since the end of August), held back by the difficulties encountered by the US tax reform, bogged down in Congress.
Secondly, the drop in crude oil hit sector stocks. The International Petroleum Agency yesterday revised its estimates on demand for the next few years downwards, overturning OPEC's estimates: crude oil supply in the first quarter of 2018 will exceed demand by 600 barrels (300 in the second quarter) . Among the causes of the new scenario are the effects that mild winters have on the fuel market and the growth of shale oil production in the United States, destined to become the great, undisputed oil power in the 61,33s. Brent traded this morning at 1,4 dollars (-55%), Wti at 5 dollars. In one week the drop was XNUMX%.
ITALY DISCOVERS THE PIR JUNIOR
In the midst of these mega trends, it is worth mentioning a small but potentially important novelty for the PIRs, the savings investment plans, so precious for the relaunch of the Italian Stock Exchange: the investment facilitations provided for by the legislation on the PIRs can also apply to minors . This sets in motion an important lever at the level of family tax planning.
NIKKEI IN RED FOR THE SIXTH DAY
Stock market forecast signals new clouds on the horizon of stock lists. The Japanese Stock Exchange is about to close lower for the sixth consecutive day: the Nikkei index loses 1,2%. The data on GDP also weighs: the Japanese economy grew in the third quarter by 0,3% compared to the second quarter, slowing down from the previous +0,6%.
Chinese stock exchanges also fell: Hong Kong -0,5%, CSI300 index of Shanghai and Shenzhen lists -0,6%. The drop in raw materials, the movement which signals a loss of confidence in the strength of economic growth, penalizes above all the Australian Stock Exchange: S&P/ASX index -0,7%. The equity markets of India (BSE Sensex -0,2%) and South Korea (Kospi index -0,2%) decreased slightly.
THE REDUCTION OF GENERAL ELECTRIC DOES NOT STOP
The collapse of General Electric (-5,9% to 17,46 dollars, its lowest for six years) and the slowdown in oil have affected Wall Street, which however reduced its losses in the final: Dow Jones -0,13%, S&P -0,23%. NASDAQ -0,29%. The Energy index lost 1,5%, the steepest decline in the last four months. Exxon dropped 0,8%, Conoco Philips -2,5%.
SAIPEM LANDSLIDE, TREVI RAISED TO THE GROUND (-22%)
The decline coincides with the crisis of some oil stocks in Piazza Affari. Saipem (-7%), was the worst blue chip with a decline of 7%. The landslide began when it became known of the share's unexpected exit from the MSCI Global index. It should be noted that on 24 October, Morgan Stanley's team of analysts confirmed the Overweight rating on the stock, with a target price of 5,5 euros.
A day of passion also for another stock linked to the oil world: Trevi collapses by 22%, last price 0,41 euros, the lowest in the last 14 years (-60% since the beginning of the year). The board of directors postponed the approval of the financial data relating to the third quarter of the current year after acknowledging the uncertainties regarding the outcome of the ongoing negotiations with the creditor class for the definition and signing of the standstill agreement. Also down were Eni (-1,4%) and Tenaris (-2,4%).
VENEZUELA IN DEFAULT, ASTALDI DEVALUES AND ASKS FOR 400 MILLION
The crude oil price crisis is the root cause of Venezuela's default which threatens to widen: after the first non-payment (200 million dollars) a second will soon arrive from the state oil company.
The crisis in Caracas has fully invested Astaldi (-7% to 3,08 euros, after losing 44% last week) forced to write down its exposure to the South American country by 230 million euros. The company has set up a strengthening operation for a total of 400 million, divided into a capital increase of 200 million and the issue of additional financial instruments for 200 million.
EUROPE IN RED, VODAFONE SAVE THE CITY
The negative streak of European stock exchanges continues. In Milan, the Ftse Mib index (-0,63%) closed down for the eighth time in a row at 22.297 points. The other main squares in the area are also in red: Madrid -0,44; Paris -0,46%; Frankfurt -0,31%. London closed flat, -0,02%, with the euro up against the pound (0,8961, +0,73%). The City was also supported by the push from Vodafone (+5,1%), which improved its guidance.
In the third quarter, the GDP of the Eurozone recorded a +0,6% compared to the previous three months, according to the preliminary estimate released by Eurostat, the EU statistical agency. In the second quarter the GDP had marked a +0,7%. The data slightly surprised economists, considering the solidity beyond expectations of the figures from Germany (the growth of the German economy accelerated to 0,8% in the third quarter) and Italy (in the third quarter the gross domestic product increased by 0,5% compared to the previous quarter and 1,8% compared to the third quarter of 2016).
JP MORGAN SEEING THE SPREAD AT 100 POINTS
Positive end of session for the Italian secondary, which in any case retreats from the highs of the day. The spread on the Bund, which slipped to 138 basis points, recovered to 143. A study by JP Morgan Asset Management predicts that the Btp/Bund spread will remain closer to 100 than to 200 ticks and that the volatility generated by the election could be equivalent to a purchase opportunity for Italian paper.
The ten-year reference rate is once again above 1,80%, that of the thirty-year March 2047 above 3%. Out of a total of 900 million euros, the specialist operators asked for and obtained only 308 million in the reopening reserved for them of yesterday's auction on three, 7 and 15-year BTPs. According to Reuters calculations, taking into account today's reopening but not the BTP Italia, the Ministry of the Economy has satisfied approximately 88,4% of the total funding needs for 2017.
The Bundesbank reopens the Bund today August 2027 0,50% for 3 billion euros: a good welcome is expected after last week's rise in rates.
BTP ITALIA RISES TO 3,325 BILLION
The second day of the placement of the new Btp Italia closed with orders for 1,139 billion euros, with the total requested rising to 3,325 billion. This is the twelfth edition of the BTP Italia, the second this year after the one completed in May with the issue of 8,59 billion. In May, after the second day, retail requests amounted to 2,7 billion.
KEPLER BOCCIA LEONARDO, FOR AKROS IT'S BUY
Two heavyweights from Piazza Affari are still down. Leonardo's rebound attempt failed in the morning (-4,6%) at the end of the ninth consecutive session of declines. Kepler-Cheuvreux confirmed Hold's judgment, cutting the target to 12 euros from 15 euros. The group has cut its targets to 2017 in terms of revenues, gross profit and orders, while the third quarter data are well below forecasts. Analysts revised “their valuation approach and estimates after the profit warning in the quarterly report, obtaining a more prudent target price. The helicopter crisis", concluded the Kepler experts, "remains a puzzle for us".
On the other hand, Banca Akros has a completely different opinion, upgrading the rating of the stock from neutral to buy, leaving the target price unchanged at 14,25 euro. For the experts, who recall the -25% lost by the stock in recent days, "the reasons behind the profit warning", ie the performance of the helicopter division, "are sufficiently clear and other surprises are unlikely".
TELECOM AT THE MINIMUM SINCE JULY 2016
Telecom Italia's hemorrhage continues, -2,5% (it is the eighth consecutive session with a minus sign). The stock has touched its lowest since mid-July 2016. The declarations of CEO Amos Genish contributed to the drop today, which cooled speculation on the network and M&A.
TODAY THE CARIGE INCREASE, BPM LIQUID UNIPOL
The banking sector was weak with the sector index down by 1,11%. Banco Bpm (-2,49%) was one of the stocks most affected by sales, which yesterday evening announced the definitive price of the Popolare Vita share taken over by Unipol. Bper Banca (-2,2%) and Ubi (-1,98%) also fell. Down Carige (-10,58%) as the capital increase approaches, the price of which will be established by today's Board of Directors.
POSITIVE NOTES FROM A2A AND CAMPARI
Utilities are up, more than ever safe haven assets. Italgas +1,1%, Enel +0,5%. A2A is in great shape (+5,61%) after the accounts for the quarter and the revision of the guidance on the 2017 EBITDA. Mediobanca Securities promoted the stock from neutral to outperform, with the target price rising from 1,47 to 1,61 EUR.
Campari celebrated its entry into the MSCI index in place of Saipem with a 2,3% increase: Raymond James lowered the target price of the stock from 7,1 to 6,8 euros, a level which is still higher than current prices of Stock Exchange. The recommendation is confirmed outperform.
CLOUDS OVER FERRAGAMO, THE AZZURRI KILL RCS
In luxury Yoox net à Porter shines with a rebound of 1,8%. Today is announcing a difficult day for Ferragamo -0,37%. The quarterly report showed sharply declining profits on substantially stable revenues. In the conference call, the CEO Eraldo Poletto reiterated that 2017 is "a year of transition" and predicted that "2018 will be another year of hard work".
Italy's failure to qualify for the World Cup was a bad blow for RCS. The share of the group that controls La Gazzetta dello Sport lost 8,7%. The market thus quantifies the potential lower revenues in terms of diffusion and advertising.
