Will the stock exchanges find an opportunity to arrest the fall today? The uncertainty and volatility of the international scenario do not promise signs of calm in the short term. According to the consensus of experts gathered by Bloomberg, the chances that the Fed will not raise rates but rather cut them have even now increased by four times.
On the markets, after a volatile session for Wall Street closed around parity, this morning oil experiences a small rebound with the WTI rising by 1,65% to 28,4 dollars a barrel and Brent by 1,68% at $30,83. But yesterday crude oil experienced another vertical drop with WTI closing on Wall Street down 5,89% below $28, with intraday sales peaking at -8%. Sales still hit Tokyo down 2,3% as Asian markets remain closed (until the 12th) for the Chinese New Year. But tomorrow Tokyo will also stop for a session.
RACE TO REFUGE GOODS
SPREADS ON THE RISE
Investors are back to buying safe-haven assets such as the German 6-year, gold and the yen. As a result, Japan's XNUMX-year government bond yield fell into negative territory yesterday for the first time in history. The result is that the stock of global debt that currently has a negative yield rises to $XNUMX trillion.
While gold continues to rise to 1190 dollars an ounce, the purchases have also rewarded the Bund and the Btp bund spread has widened up to 150 basis points. Yesterday the Ftse Mib was the worst European stock exchange with a drop of 3,21%
The other European Stock Exchanges were in red yesterday: Paris -1,69%, London -1%, Frankfurt -1,11%. Athens – 2,89% after a 5% drop in intraday. The euro-dollar exchange rate is at 1,1291
MARKET MOVERS ON THE DIARY
YELLEN AND OIL STOCKS IN THE USA
Investors are weighed down by fears about the bail in, with the alarm that also overwhelmed Deutsche Bank which had to reassure its ability to repay subordinated loans, but also the return of uncertainty linked to the Fed's moves. The testimony is expected today by Janet Yellen to the US Congress. Meanwhile in Europe Jens Weidmann, head of the German Bundesbank, has warned that the drop in oil prices will significantly reduce inflation estimates for 2016. In the USA, macro data on weekly applications for new mortgages are expected for the week ending 5 February and DoE energy inventories for the week ending February 5, the US Treasury Department's monthly budget for December and on the corporate side the quarterly results of Carlyle and Time Warner, Cisco Systems, Twitter and Tesla. Treasury Secretary Jack Lew testifies before the Senate Finance Committee on the budget.
BANKS DECREE IN CDM
GHIZZONI, MARKET WAITING FOR STRONG SIGNALS
Today, at 21, the new government measures on the banking system arrive in the Council of Ministers. Confidence in the Milleproroghe decree is being voted in the Chamber, while on the macroeconomic front, data on industrial production is expected in December in Italy and France.
In Italy yesterday all the main banks were knocked out: Ubi Banca -8,87%, Banco Popolare -8,63%, Bpm -8,35%, Unicredit -7,91% and Intesa Sanpaolo -6,21%. This is a busy week for the whole sector: there is anticipation for the decree on bad banks, Bcc and debt collection, the engines of M&A are heating up and the market is expecting possible news on the front of the Banco Popolare-Bpm marriage for the end of the week and several large groups are announcing their 2015 results.
Among these also Unicredit which yesterday announced profits for 1,7 billion euro and a proposed dividend scrip of 12 euro cents per share. The CEO Federico Ghizzoni, during the presentation of the results, confirmed his intention to return to the cash dividend next year. For Ghizzoni, the sell-off on the markets will not stop in the short term.
“I think it won't stop being realistic in the short term – he commented during the press conference on the results – there is no such news as to reverse the negative trend. It is a market looking for reasons to reverse course, until there are strong signals from central banks or the government, the market will not reverse the current trend. However, the enormous liquidity that is created by selling equity does not re-enter the circulation, it is parked, in my opinion it will return to equity when the market has the perception that a solid basis has been reached from which to start again”.
Some stocks closed yesterday against the trend on the Ftse Mib: Telecom Italia +3,57% awaiting the plan, Campari +1,56%, Mediaset +1,36% and Luxottica -1%. After the turbulence related to the reorganization of the top management, the stock rebounds in the wake of the evaluations of Jefferies analysts who improved the recommendation to hold from sell.
