The Asian stock exchanges are advancing, towed by the bull that comes from the USA. The Tokyo Stock Exchange is running, or rather galloping: +4,1%. What made the rally possible, in addition to the good news from the USA, are the measures taken by the central bank to relaunch the Abenomics slowdown, as confirmed by the latest, disappointing, data on inflation (down to 1%, far from the 2% target) and on consumption. The Bank of Japan has raised the amount of Japanese QE to 80 trillion, while the GPIF, the world's largest pension fund, has raised the percentage of assets to be invested in shares from 12 to 25%. Hong Kong is also on the rise (+0,9%). The dollar advances: the cross with the euro drops to 1,2598, the one with the yen to 110,1.
The US locomotive has restarted: GDP growth in the third quarter (+3,5% on an annual basis) was higher than expected, justifying the note of optimism on the labor market present in the statement issued by the Fed on Wednesday evening, the day of the closure of the American QE. The Dow Jones index rose 1,3%, the S&P 500 0,62% and the Nasdaq 0,37%. Some quarterly records also pushed the price lists: Visa +10,2% and Mastercard +9,4%.
The unexpected growth of GDP in the United States in the third quarter made it possible for European stock markets to rise after a difficult start. The decline in German inflation did not however affect Frankfurt, which rose by 0,35%. Paris advances by 0,74%, Madrid by 0,16%, London loses 0,15%. Investors' attention is focused today on inflation in the Eurozone: JP Morgan analysts have revised their expectations downwards from +0,4% year on year to +0,3%. The Milan Stock Exchange closed a session of very large fluctuations slightly higher. The Ftse Mib index rose by 0,2% to 19.194 points, reaching a low for the day at 18.701 points (-2,3%).
ENRIA (EBA) KNOCKS THE BANKS. BUT IT'S NOT A KO
The session was marked by the Enria effect. Yesterday morning, the president of the EBA argued that European banks, even those that passed with flying colors in the stress tests (run by the EBA themselves) should not be too calm. In the wake of this "cold" alarm, sales in the sector rained down with strong repercussions on prices, which then returned in the afternoon after the opening of the US Stock Exchanges.
In the end Unicredit closes at -0,3%. Intesa +0,1% (it had fallen to -3,9%), Ubi Banca -0,6%. Banca Popolare dell'Emilia Romagna -1,6%, Banca Popolare di Milano -1,5%, Banco Popolare -2,2% remain in negative ground, losing more than 5%. Even more dramatic was the day of the "rejected" banks, in search of solutions to present to the ECB. Meanwhile MontePaschi closed at -7% (it had reached -17%). The bank trades at less than half the value it had at the beginning of June, when it collected 5 billion in fresh funds.
Accelerates the development of the plan which should be approved by Montepaschi's board of directors in the first week of November to end up on the ECB's table by mid-November. A one-year extension of the repayment of the Monti bonds will be requested, with new sales envisaged and new provisions identified for the 2014 budget. But the words of the chairman Alessandro Profumo weigh heavily: bank".
Banca Carige closes even lower (-11%). The market capitalization was reduced to just 690 million euros and since the beginning of the year the stock has widened the loss to -62%. Meanwhile Banca Akros has decided to suspend the recommendation on the stock. At the beginning of October it was Hold with a target price of €0,15. The bank, which must raise 814 million to meet ECB standards, has concluded an agreement with Apollo Management for the sale of 100% of Carige Assicurazioni and Carige Vita Nuova for a total value of 310 million euro. The positive impact on Core Equity Tier 1 is 94 points.
The end-of-month Treasury auctions close well, but not very well. Yesterday securities worth 7,205 billion euro were placed against a total offer of 7,25 billion. For the 5-year BTP, there was an increase in the rate to 1,23%, the highest since June, from 1,06% in September. For the ten-year term, rates at 2,44% from the 2,45% of the last placement. The spread between Btp and Bund closed at 164 basis points, the ten-year market yield fell to 2,48%.
Meanwhile, the ECB has announced the start of the purchase of asset backed securities, the securitized loans of banks, starting from November. The team chosen to assist Eurotower in the deal includes Deutsche Bank. Ing,, State Street and Amundi to help you with the operation. The action is part of the stimulus measures planned to counter the risk of deflation and is added to the covered bond purchase programme, already launched this month. According to a Reuters survey, ABS purchases could reach 250 billion while requests for Tltro loans by banks could rise to 175 billion in December (against 82,3 billion in September).
EXOR RISES ON THE FERRARI EFFECT. FCA'S TARGET RISES
In the Milanese list, Exor, the financial company of the Agnelli family is up by 5% following the announcement of the reorganization of the activities of the subsidiary Fiat Chrysler Automobiles (-0,3%). For the Fitch rating agency, the decisions taken by the board represent a positive development for the group's debt profile, however ratings are still conditioned by expectations of a negative free cash flow until 2016. In the meantime, many brokers have adjusted towards high target price. Among these, Equita at 10,50 euros from 9,20 euros, confirming the Buy recommendation and increasing the weight of the stock in the main portfolio by 50 basis points. SocGen also raised the rating to Hold da Sell, while the target was raised to 8,60 euros from the previous 5,5 euros.
Pirelli +1,2%. CNH IndustryL -0,4%. The truck, bulldozer and tractor company released the quarterly data this afternoon and confirmed the 2014 targets. Immediately after the announcement of the results and the confirmation of the 2014 targets, it had risen by almost 5% with a maximum of 6,73 euros.
THE LIGHTER TAX PUSHES ENI
Eni +1,5% presented accounts better than expected. The oil major closed the third quarter with an adjusted net profit (excluding extraordinary items) of 1,17 billion euros, a slight increase compared to that recorded in 2013 thanks to lower taxes in the period. The announcement of an offshore discovery in the Congo also contributed to the upside.
Saipem-1,9%. Eni confirmed its intention to sell but did not provide details. Banca Imi which cut the share recommendation from add to hold and the target price from 19,6 to 14,3 euros and Bernstein from 14 to 10 euros, leaving the recommendation at underperform.
LUXOTTICA OK, CARRARO AND IMPREGILO UNDER FIRE
Luxottica performed well (+2,6%). The world leader in eyewear closed the third quarter of 2014 with revenue growth at current exchange rates of 5,5% to 1,88 billion euro. On the other hand, the thud of Carraro (-8,73% to 1,767 euros) should be noted. Banca Imi notes that, based on the slowdown in orders in the third quarter, the Padua-based company has announced that the fourth quarter could also show a loss. Lastly, sales continued on Salini Impregilo (-3,93%), triggered by concerns over third-quarter results and the slowdown in debt reduction, despite the company confirming the estimates in the business plan.
