“Patience and flexibility” is the new mantra of the Fed which, frightened by the winds of crisis in China and in the Eurozone, retraces its steps, to the delight of Donald Trump and the stock exchanges. There will be no talk of rate hikes for a while, the reduction of the federal budget is also slowing down. “In coming meetings” the Fed will decide how to manage the reduction of its balance sheet (inflated in the crisis years by purchases of Treasuries and mortgage bonds). "No decision has yet been taken - reads the statement - some changes may be necessary".
POWELL HOLDS DOWN RATES. OVER ASIA, THE YUAN IN FLIGHT
The central bank's turnaround, reaffirmed by Jerome Powell in the press conference after the board meeting, gave wings to the stock exchanges, now focused on the developments of the delicate and complex negotiation between China and the US underway in Washington.
Asian price lists are advancing this morning, at their highest in 4 months. Tokyo's Nikkei is up 1,1%. Hong Kong's Hang Seng of 1,2%. The CSI 300 of the Shanghai and Shenzhen stock exchanges by 1,2%. No less significant is the leap in the yuan: the Chinese currency, up for seven consecutive sessions, rises to 6,70 against the dollar.
The real economy is stabilizing after the worrying series of negative data: the PMI index on the expectations of the managers of the purchasing offices of the manufacturing industries rose to 49,5 in January from 49,4 in December: the consensus expected 49,3 ,XNUMX.
APPLE AND BOEING ACCELERATE, FACEBOOK GOES INTO ORBIT
Strong acceleration on Wall Street, also driven by some sensational quarterly results. The Dow Jones index is up 1,77%, S&P 500 +1,55%. The Nasdaq scores a 2,2% jump.
During the session, Apple (+6,83%) confirmed the gains recorded after the publication of the quarterly.
Boeing (+6,25%) recorded a strong increase in profits and orders.
The most extraordinary performance, however, is that of Facebook: +4,3% during the session but up another 11,5% after the Stock Exchange, when much higher than expected bills were announced, weighed down by fears of scandals that have marked the last few months of the social network. Earnings jumped 61% to $6,88 billion ($2,38 per share), revenues grew 30% for the year to $16,91 billion. Daily users rose to 1,52 billion in December 2018, up 9% year over year.
THE CITY RUNS, THE ITALIAN GDP DOESN'T
Those who feared the fall of the London Stock Exchange after the vote of the British Parliament which increases the risk of a hard Brexit have been sensationally proven wrong: the list has taken flight in the wake of the fall in the pound and in the hope that a common sense ending. New signs of a slowdown are emerging in Europe: German GDP growth is downsizing, Prime Minister Giuseppe Conte anticipates what everyone in Italy, with the exception of the government, already took for granted: the "technical" recession which, however, does not slow down the race to Italian debt securities.
Milan scored a gain of 0,36%, 19.711 points, mainly thanks to luxury stocks.
The performance of Lvmh (+6,87%) and of the other brands boosted the Paris Stock Exchange (+0,95%).
In red Frankfurt (-0,28%) and Madrid (-0,52%). London rallied (+1,63%).
CONTE ANTICIPATES THE "TECHNICAL RECESSION"
"I expect a further contraction of GDP in the fourth quarter, but the positive fact is that it depends on external factors, [such as the slowdown in] China and Germany,” Prime Minister Conte said yesterday, speaking in Assolombarda. The survey of economists in view of the publication of the Istat estimate, foresees a decline of 0,1% after the drop of the same size recorded in the third quarter, the first after fourteen consecutive months of expansion.
Meanwhile, confidence among industrial companies is falling and rising among consumers. The consumer confidence index rose to 114 in January from a revised 113,2 the previous month. The figure is above analysts' expectations.
On the other hand, the confidence climate of manufacturing companies decreased, returning to the lowest level since September 2016. The index fell to 102,1 from the revised 103,4 in December.
RAIN OF RECORDS FOR BTPs, SPREAD AT 247
The Treasury's golden season continues on the bond market: the yield on ten-year BTPs is at its lowest since July, at 2,58%, -4 basis points. At the close, the spread fell to 247 basis points from 250 cents on Tuesday evening, after a plunge to 246, a new low since December 28th. The yield of the 2-year BTP fell to 0,25%, a new low since the beginning of May, that of the 12-month Bt at 0,08%, the minimum since June
The ministry placed eight billion euros of bonds, including 5,5 billion euros of five- and ten-year BTPs, placing them at the lowest yield compared to April. the rest are CCTeu. The target of the auction was 6,5 – 8 billion euros. Coverage rates were slightly down compared to the average of the last three auctions. Lively interest on the part of specialist operators also for the reopening of the six-monthly Bot proposed in the afternoon: compared to the offer and the assignment of 650 million, the demand amounted to 1,683 billion.
MONCLER FLIES ON THE WAVE OF LVMH RECORDS
Luxury in great shape on the catwalk of Piazza Affari towed by Lvmh. Moncler leads the race (+5,8%) to the highest since November. The consensus gathered by Bloomberg is very optimistic. Sixteen out of twenty-four analysts recommend buying. Only one sell.
Salvatore Ferragamo also takes advantage of it +1,53%, even if the data for the quarter were disappointing. In evidence Brunello Cucinelli (+3%). Geox advanced by 2,14% with Kepler who promoted the stock to "hold" from "reduce" in expectation of "weak but already incorporated in expectations" results.
LEONARDO-FINCANTIERI: THE GOVERNMENT DENIES
Leonard -0,5%. Fincantieri +2,5% despite Prime Minister Conte's denial of the alleged government project for the merger of the two companies, both state-controlled.
Stmicroelectronics +0,43%. UBS raised its target price from 13 to 14 euros, confirming the neutral recommendation.
Contrast the banks: the sector index closed practically unchanged, in line with the European figure +0,08%. Good for Bper Banca (+0,87%). Unicredit-0,77%.
CHINA RELEASES THE CAR. MAZZATASULA JUVENTUS
The automotive companies are in evidence, after the go-ahead in China for incentives on the purchase of cars: Ferrari +1,5%, Pirelli +1,2%, Fiat Chrysler +1,1% and Brembo +0,8% .
Utilities barely moved, they take a break, Terna -0,3%, consolidates close to yesterday's all-time record.
Juventus -4,3%: second sharp drop, almost a sign of fate before last night's sharp elimination in the Italian Cup.
Brilliant Salini Impregilo (+2,16%) awaiting developments in the Astaldi dossier up 9%.
