The world is about to experience a new weekend of fear after Pyongyang's latest statement. Kim's Foreign Minister Ri Yong Ho said the government was considering carrying out a nuclear test of "unprecedented power": a hydrogen bomb to detonate in the Pacific.
The Asian emergency overshadows the events of the Eurozone. Today Theresa May in Florence will try to unblock the Brexit negotiations. Meanwhile, the tension between Madrid and Barcelona does not subside, but the spotlights are already focused on the German vote on Sunday, which will crown Angela Merkel for the fourth time (but with the thorn of a growth of the right).
The feeling is growing that, after the vote, it could speed up the EU integration process, with immediate effects on the business world. It is no coincidence that the question of a settlement of Commerzbank, the most important commercial bank, has arisen. And there is talk again with insistence of a deal between Siemens and Alsthom.
WALL STREET STOPS AFTER NINE RISES. WEIGH APPLE
The latest threat from Pyongyang has frozen Asian price lists. The Seoul Stock Exchange's Kospi index fell 0,7%, while the won, the currency of South Korea, weakened against the dollar by 0,5% to 1,138. Hong Kong lost 0,9% and the CSI 300 index of the Shanghai and Shenzen stock exchanges recorded a drop of 0,7%.
The Japanese Stock Exchange falls, while the yen, perceived by investors as a safe haven asset, strengthens against the dollar to 111,8 from 112,5 yesterday: the first appreciation after six consecutive days of weakening. The Indian stock market also falls: Sensex index -0,7%.
Setback for US markets after nine consecutive days of gains. Wall Street revises accounts in light of the probable rate hike in December. The pressure of sales on Apple weighs even more (-1,3%), linked to the fear of a lukewarm reception for the latest iPhones. The Dow Jones finished down 0,24% after managing to update its all-time high at 22.419,51 at the start; S&P 500 index -0,23% and Nasdaq -0,52%.
THE T-BOND CURVE IS INCREASINGLY FLAT
The dollar recovers positions against the euro, traded at 1,1954. The 10-year Treasury Bill trades at 2,27%. The spread between the ten-year and the thirty-year yield fell to 53 basis points, close to the lows of the last two months, levels close to the low of January 2009.
The flattening of the curve signals that investors are skeptical about the chances of seeing a strong and structural recovery in the US economy. Indeed, Janet Yellen herself has admitted that the weakness of inflation, whose estimates have unexpectedly been revised downwards, is a mystery.
STABLE OIL, TODAY THE ANALYST DAY OF TENARIS
Brent oil unchanged at 56,3 dollars a barrel, Wti at 50,55. Kuwaiti oil minister Essam al-Marzouq said the possibility of an extension of the deal on cuts in global crude stocks would not be discussed at tomorrow's OPEC meeting.
Both Saipem (+0,5%) and Eni (+0,7%, at 13,74 euros) grew in Piazza Affari. Declining Tenaris (-1,2% to 11,96 euros) on the eve of the Analyst Day: Morgan Stanley pointed out that the stock has done worse than the sector during the meeting 7 times in the last 8 years.
Saras sale: +1,47% to 2,07 euros. Mediobanca Securities raised the target price on the stock from 1,9 to 2,1 euro, confirming the neutral recommendation.
LEAK OPENING IN EUROPE. TODAY THE UK PROPOSALS ON BREXIT
Futures signal a half point downward opening for European stock exchanges. Milan leads the charge of the lists, thanks to the push of the banks, The Ftse Mib index rises by 0,6% to 22.484 points, reaching a new high since the end of 2015. In the morning it reached 22.500,18 points: the next target it is set at 22.850 points.
Good for Paris: the CAC 40 index gains 0,6%. Frankfurt's Dax advanced by 0,4%. The Madrid Stock Exchange also rose: +0,1% in the aftermath of the demonstrations in the square by Catalan independence activists, triggered by the arrest of the organizers of the referendum on autonomy, declared illegal by the Spanish high judiciary. In the last month, the Spanish Stock Exchange has lost 0,3%, against +3,3% for the Milan Stock Exchange.
On the other hand, the London Stock Exchange fell, -0,11%, on the eve of the expected Brexit speech that Theresa May will give in Florence. According to the BBC today the British prime minister will say he wants a two-year transition deal with the EU, following the UK's exit from the European Union in March 2019.
THE ECB RAISES ITS ESTIMATIONS ON GROWTH
Eurozone consumer confidence improved more than expected in September, according to the flash estimate released by the European Commission. The figure rose to -1,2 from -1,5 in August. Analysts had expected the reading unchanged from the previous month.
In its monthly bulletin, the ECB revises the prospects for growth in the Eurozone upwards, emphasizing however that this has not yet been translated into prices due to the strength of the Euro. The Institute also recalls that "it will decide in the autumn on the calibration of monetary policy instruments in the period following the end of the year".
Monetary policy "is not the right tool to manage financial imbalances in the euro area, which is instead the task of national governments". This is what Mario Draghi argued yesterday in his speech at the second annual conference of the European Systemic Risk Board (Esrb). The president of the ECB focused on the level of non-performing loans in the balance sheets of European banks "equal to approximately 1.000 billion at the end of 2016".
The situation, he said, is improving but "a structural weakness persists, which includes inadequate internal governance structures, ineffective and costly debt collection procedures in some member countries and misaligned incentives that block speedy NPL resolutions".
RATES ON BTPs GO UP. 3 BILLION CTZ AT AUCTION
European bonds are in fibrillation in the wake of the strengthening of US T-bonds. The yield of the 10-year BTP rises to 2,16, while the spread with the Bund returns to 170.70 points. The political tensions in Spain also weighed on securities in the European periphery.
The Treasury of Madrid has placed four medium-long bonds for a total amount of 4,68 billion euro, with declining rates. France is also active on the primary market, with the placement of 7 billion Oat. On the occasion of the auction on Tuesday 26 September, the Ministry of the Economy will make available to investors up to 3 billion euros between Ctz and Btpei. In detail, the Treasury will offer between 1 and 1,5 billion of the ninth tranche of the CTZ 30 May 2019 together with an amount between 1 and 1,5 billion overall of the two Btpei 15 May 2022 and 15 September 2032.
ITALIAN BANKS. IN 2017 +27% (+15% EUROPEAN)
Also in Milan, the prospect of rising interest rates has boosted the financial sector: the index of Italian banks gained 1,66% reaching 12.055 points, one step away from the highs of the year set in mid-August in 12.145 points.
The increase since the beginning of the year is approximately 27%, well above the Eurostoxx figure for the sector (+15,5%). The race is led by Ubi Banca (+4,35%) after the bank announced management's participation in securities purchases for a total value of 1,6 million euro as part of a long-term incentive plan launched in support for the business plan. Intesa Sanpaolo (+1,4%) closed at its highest level since January 2016.
The credit default swap auction on Monte Paschi's subordinated bonds established a bond valuation of 49,5 out of 100, which values the bank's shares at around 4,30 euros.
NEW STATUTE FOR UNICREDIT. MERKEL BRAKES ON COMMERZBANK
Under the spotlight Unicredit (+2,3%) which recovered the losses incurred in the face of rumors of an interest in Commerzbank (+3,46%). In reality, the betrothed of the Bavarian institute (in bad waters) should be the Parisian Bnp Paribas (+1,01%), owner of Bnl. This is what the weekly WirtschaftsWoche claims. The Berlin Finance Ministry's denial was flat: “There are no negotiations and we have not given a mandate to an investment bank”.
Meanwhile, the Bank has announced the changes to the statute which will be presented at the shareholders' meeting on 4 December: the board will be able to present a list of candidates; the 5% ceiling on voting rights will be eliminated and savings shares will be converted into ordinary shares. Finally, the headquarters will be moved from Rome to Milan.
FLY YNAP/YOOX. LUXOTTICA AND ATLANTIA SLOW DOWN
The best stock of the day was Ynap +4,17% on the wave of rumors about the possible entry of the giant Alibaba into the fashion portal. Ferragamo is also brilliant +1,46%.
The EU Antitrust verdict on the (at risk) merger between Luxottica and Essilor (-0,95%) is approaching. Rbc cut the recommendation to underperform from sector perform with the target price falling to 47 from 55 euros.
Atlantia is still holding back (-0,59%) on the wave of rumors of a counter-offer for Abertis orchestrated by Acs through the German subsidiary Hochtief.
TISCALI DISCOVERS PROFIT. GEOX AND TREVI GO BOOM
There is no shortage of positive notes among the medium/small caps. Geox (+3,85%) closed the session up sharply on the highest since February 2016 at 3,56 euro. Balzo di Trevi (+14,78%), inflamed by new orders.
Tiscali also stands out (+10,5%) after announcing the first half of its history with a profit (24,5 million euros). Revenues stood at 103,6 million (+6,9%), in the high part of the targets communicated to the market last July. Ebitda amounted to 14,4 million (+16,3%), well above the 2017 target.
