“We have removed the word patience, but we will not be impatient”. With these words Janet Yellen he wanted to exorcise the fear of an imminent increase in the cost of US money, the first since 2006. The markets heeded the president of the Fed. Wall Street took the upward path: the Dow Jones index rose by 1,27, 500%, the S&P1,22 by 0,92% and the Nasdaq by 30%. From today Apple becomes part of the Dow Jones XNUMX.
Retrace the dollar to a maximum of 1,0880 against the euro (+2,8%). Yields on t-bonds also fell sharply: -11 points over 2 years to 0,56%, the sharpest movement in one day since 2009. The Auction-Pacific stock exchanges grew sharply this morning: Australia gained '1,4%. Hong Kong +1,3%, Mumbai +1,12%.
MILAN BRAKES. GREECE ONE STEP FROM DEFAULT
Difficult day yesterday for Europe. In addition to the expectation of Washington's decisions, the increasingly concrete risk of the collapse of Greece weighed. In Milan, the worst Stock Exchange, the Ftse Mib index closed trading down by 0,69% to 22.565 points. Frankfurt also decreased -0,48%. Paris instead gained 0,09%, preceded by Madrid (+0,2%). London is up sharply (+1,57%).
Government bonds are slowing down: the 10-year BTP yield rises to 1,32%, the spread with the Bund widens to 113 basis points (+15 compared to yesterday). Weighs the "digestion" of the new 15-year Btp placed on Tuesday. 43,8% was sold to Italian investors, 20% between the United Kingdom and Ireland.
Yesterday evening the Athens Parliament approved, without consulting the officials of international institutions, humanitarian aid (meal vouchers and electricity supply) for 300 families at a cost of 200 million. On the eve of premier Tsipras's visit to Berlin, Eurogroup president Jeroem Djissembloem aired the freezing of Greek bank accounts, as has already happened in Cyprus. The Athens Stock Exchange loses 4,3% (banks lose over 10%) and the 11-year bond is back above XNUMX%.
US GROWTH SLOWS DOWN, LESS PRESSURE ON THE COST OF MONEY
“In the light of the continuous improvements in economic conditions – Yellen said in yesterday evening's press conference – we don't want to discount the hypothesis that a rate hike may become necessary in the coming months. Each measure, however, will depend on the trend of macroeconomic data”. And it is by no means certain, from this perspective, that the turning point is imminent: before changing course, Janet Yellen will wait to see new signs of strengthening of the labor market and to have confirmation that inflation is once again moving towards the 2 target %.
These are objectives that, for now, appear quite distant. Indeed, thanks to the slowdown in exports due to the strength of the dollar (to which the press release does not even mention), the central bank has revised downwards the growth forecasts for 2015 in the range between 2,3 and 2,7 per cent (against the previous 2,6-3) even if the unemployment rate drops to 5-5,2% (even 4,9 for 2016). Furthermore, inflation will not reach the desired target level before 2017.
Hence the feeling that Janet Yellen is unlikely to initiate the first rate hike since 2006 in June. “With the mine from the rise in the Fed Funds defused in the short term - commented Giuseppe Sersale, strategist of Anthilia - it seems reasonable to expect further recoveries in sentiment in the coming days. In Europe, the risk appetite could be somewhat contained by the inevitable rebound of the euro, but not annihilated, also because the structural framework does not change: the ECB is printing and the Fed is not”.
MARKET MOVER: ENEL, FINMECCANICA AND TELECOM
Highlights today the Investor day of Enel (-0,4%). The managing director Francesco Starace will present the strategic plan to the financial analysts in London. There is anticipation for pending announcements of divestments and asset write-downs. Unlike in the case of Eni, the dividend policy shouldn't be shaken: last year Enel paid 13 cents per share with a payout of 40%.
Enel Green Power jumped yesterday in Piazza Affari (+2,7%). Among utilities, Snam falls: -0,9% after Goldman Sachs' downgrading to Sell
Spotlights on this morning too Finmeccanica (yesterday -2,4%). The presentation of the 10 results will be held in London from 2014 am, closing with a net profit of 70 million euros, which compares with a loss of 649 million in 2013.
Today the board of Telecom Italy (-3,3%) approves the 2014 draft budget. A return to profit is expected (around 100 million) after three years in the red. The other data is already known, starting with the dividend that will be paid to savings shares only.
CARS AND BANKS BRAKE AFTER THE LONG RALLY
A marked decline in the automotive industry and banks, the sectors that benefited the most from the recent rally. The Italian banking sector, affected by the widening of the spread, leaves 2,2% on the ground. Banca Pop.Milano falls (yesterday -2,1). Unicredit drops by 2,2%, Intesa -2,4%, MontePaschi -0,7%. Banco Popolare -3% and Ubi -1,6% also fell. In contrast, Banca Carige rises by 2% pending today's Board of Directors which will implement the capital strengthening measures approved by the ECB.
The European automotive sector is worse off, down by 3,2%. At Piazza Affari: Fiat Chrysler -2,6%, Pirelli -0,3%. BMW's rally stops in Frankfurt (-3,4% to 117 euros), which flew on Monday to its all-time high, at 123,75 euros.
RUMORS OF SHOPPING IN THE USA, PRYSMIAN TAKES FLIGHT
In a list dominated by minus signs, Prysmian's performance stands out (yesterday +4%): the world leader in the production of cables is at the center of a little whodunit. According to market rumors, the company is in talks to buy the American General Cables. But the company has denied.
FLY THE CONCRETE, D'AMICO TAKES OFF
The cement sector is in great evidence, in turmoil after the news that the merger agreement between the giants Lafarge and Holcim can be saved and for the upgrade by Standard Chartered. Buzzi gains 1,9% after the offer for Sacci, a sign of the consolidation coming to the sector in a context of recovery in the economic cycle. In the wake of Italcementi leaps by more than 4% and Cementir by 2,6%. Among the small caps, D'Amico stands out (+8%), yesterday's best title in Piazza Affari. Banca IMI reiterated the Buy recommendation, adjusting the target price to 0,80 euro from 0,76 euro. The target price projects a possible increase of approximately 50%.
THE DODGE &COX FUND AT 10% OF SAIPEM
New drop in oil, now in its seventh consecutive day of decline: WTI American crude oil drops by 2,8% to 42,2 dollars a barrel, Brent to 53,3 dollars (-0,3%). However, Eni (yesterday +1,6%) and Saipem (+1,9%) are up. From the communications to Consob on the relevant shareholdings it emerges that the investment fund Dodge & Cox, based in San Francisco, has increased the stake held in the oil equipment company by way of asset management to 10,4%.
