Who's Afraid of the Fed? Not the markets, apparently. The day after the US central bank signaled its intention to raise rates within the year, both equities and bonds rose in pairs. The indices of the main industrialized countries are advancing, showing progress of around 2%, while global bonds see their yields fall by 8/10 basis points.
Why this reaction? Giuseppe Sersale of Anthilia explains it this way: the umpteenth postponement of 2016 exacerbates the Fed's credibility problem; “after three increases announced and then reversed in 2016 – asks the analyst – what confidence can the market have in this last indication, considering that between now and December there are the presidential elections? The decision allows us to think that new excuses will be found at the next meetings not to move".
However, Alessandro Fugnoli of Kairos believes that there is a common logic in the choices of the Fed, the BoJ and the ECB: "The Bank of Japan, which is the monetary laboratory of the whole world, has just raised yields on 30-year JGBs by XNUMX basis points, just as yields on Bunds and Treasuries have risen. It is not a question of restrictive policies, but of preparatory measures in view of the fiscal expansion now around the corner”.
FLAT ASIA, AMAZON FOR THE FIRST TIME OVER 800 DOLLARS
The Asian Stock Exchanges moved little: Hong Kong -0,2%, Shanghai (-0,1%) and Shenzhen (-0,2%) were also weak. Sidney, on the other hand, rises (+0,8%). “Technical” drop in Tokyo of the Nikkei index (-0,2%). The Stock Exchange, closed yesterday for holidays, is grappling with the changes introduced by the Central Bank which favor ETFs invested in bank stocks more present in the Topix index than in the Nikkei.
Third consecutive session of increases for the US markets: Dow Jones +0,54%, S&P 500 +0,65%; the Nasdaq (+0,84%) updated the historic record to 5.339,62 points. Amazon stands out (+1,9%), for the first time above $800, supported by the increase in targets by some brokers. Apple +0,9%.
OIL RISES: SAIPEM SUPERSTAR, TOTAL SEPARATES FROM ERG
Once the central bank meetings have been archived, attention has shifted to the next decisions of the oil-producing countries, Opec plus Russia, which will meet in Algiers next week. In the meantime, the surprise drop in US inventories has favored the rebound in prices: Brent gains 1,5% to 47,54 dollars a barrel, Wti +1,5% to 46,32 dollars. On Wall Street ConocoPhillips +2,4%.
Total intends to exit the service station jv with Erg next year. This was stated by the CEO Patrick Pouyanne in the meeting with investors in London in which he announced that the company intends to proceed with a further cut in investments (15-17 billion against the current 18-19) and operating costs to maintain profitability also at an average crude oil price of $55.
Redemption in Saipem's Piazza Affari (+5%) which has thus moved away from the lows of the last two months marked last Tuesday. The company announced the acquisition of new onshore drilling contracts in the Middle East and South America for a total value of 430 million dollars. Eni +1,1%, Tenaris +2,4%.
MILAN +1,8%, DEUTSCHE BANK REVIVES IN FRANKFURT
The European stock exchanges veered higher, celebrating the incoming message from the Fed. A flat start is expected this morning pending the indications arriving, mid-morning, from the PMI surveys (relating to corporate purchasing intentions) from France, Germany and the entire Eurozone.
The Ftse Mib closed another positive session in Milan, posting a +1,76% to 16.637 points. The other squares are also on the rise. In ascending order London +1,12%, Madrid +2,01%, Paris +2,27%. Frankfurt leads the race (+2,28%).
After so much suffering, Deutsche Bank showed off within the Dax with a gain of 3,5% to 11,67 euros, thus moving away from the recent all-time low of 11,06 euros. Kepler-Cheuvreux reiterated the Buy judgment, however lowering the target price to 13,89 euros from 15,28 euros. On paper, the target price promises an upside of around 20%. The bank is studying a maxi-securitization to strengthen its assets and reassure investors.
Eurozone banks have raised €45,269 billion in four-year interest-free funds in the second operation of the new series of targeted long-term loans from TLTRO. Most Italian banks have not submitted requests, except Intesa Sanpaolo which has obtained 5 billion euros.
Yields on government bonds in the euro area fell to their lowest since 8 September, the date of the ECB directorship which, by postponing decisions on Qe, had triggered a prolonged phase of correction. The Italian 1,172-year rate drops to 0,09%, the yield on the XNUMX-year Bund to -XNUMX%.
The Treasury announced that the auction on Tuesday 27 September will offer from 2 to 2,5 billion Ctz and a total of 0,5 to 1 billion Btpei maturing 15/9/2032.
SNAM, BLITZ IN AUSTRIA. BLACKROCK SECOND SHAREHOLDER OF TELECOM
Utilities stand out, relaunched by the postponement of the rate increase: Enel +3,2%, followed by Terna (+2,6%). Snam (+2%), consortium with Allianz, took over 49% of Gas Connect Austria (which manages approximately 900 km of high pressure gas pipelines in the country) for 601 million. The seller is Omv, the most important Austrian oil & gas company, which still retains 51%.
Telecom Italia also did very well (-2,4%). From the communications to Consob on the relevant shareholdings it emerges that the BlackRock funds have doubled their shareholding to 5,04%, becoming the second largest shareholder of the telephone company after Vivendi. The operation dates back to 19 September.
This morning Macquarie upgraded the rating to Outperform from Neutral. The new target price was set at 0,93 euro from the previous 1,0 euro. On paper, the expected revaluation space is around 20%. Mediobanca Securities instead confirmed the rating on the share as outperform (Tp 1,27 euro). Mediaset +1,1%.
PRYSMIAN WILL NEVER STOP. ACCELERATE YOUR CAR: FERRARI +2,5%
Yesterday was also a day of glory for the industrialists. Prysmian gained 2,5%, updating yesterday's all-time high at 23,66 euros. Year-to-date performance improves to +13%. HSBC raised the judgment to Buy from Hold with a target price of 27 euros. Kepler Cheuvreux raised the target price to 25,5 euros from 23 euros, confirming the Buy rating. The company, according to Morgan Stanley, is among the best positioned to take advantage of the industry's M&A season. On Wednesday, ABB sold its high-voltage cable division to Swedish NKT Cables: value of the transaction 836 million euros at the EV level.
The Automotive sector was very evident in Europe: Fiat Chrysler rose by 2%, Daimler +3,4%, BMW +3,2%. Ferrari +2,44%: Mediobanca Securities reiterated the outperform recommendation with a target price set at 50 euro. Good rise by CNH Industrial (+2,8%) after the very positive data on truck sales in Europe in August. Moderate increases for Leonardo (+0,7%) and StM (+0,8%).
BPM PENSIONERS ON THE BARRICADES, LIQUID NPL AGREEMENT FOR 1-2 BILLION
Four hours of confrontation were not enough yesterday for the CEO of Bpm (+0,89%), Giuseppe Castagna, to overcome the resistance of the retired members of Piazza Meda. The leaders of the association have declared that they expect concrete answers (especially on the future of the company mutual company) by 15 October, the date of the assembly called to approve the merger: any vote against by pensioners could jeopardize the merger with Banco Popolare (+1,54%).
Unicredit closed with an increase of only 0,4%: the rumors about the possible sale of Fineco (+1,5%) to Banca Generali (+0,5%) should be noted. Intesa advances by 1,2%. According to Bloomberg, the institute is considering the hypothesis of selling a package of non-performing loans for a total amount (face value) between 1 and 2 billion euros.
MEDIOBANCA AWARDS YOOX, EXANE SAFILO
Positive luxury stocks: Yoox +3,8%, confirmed in Mediobanca Secuties' list of favourites. Luxottica +4%, Ferragamo +4%. Between mid and small caps, Safilo gains 3,9% supported by the new Outpeform recommendation by Exane.
Campari leap forward (+4,9%). The company has successfully completed several liability management operations thanks to which the group has reduced the overall cost of debt and improved financial flexibility.
