The Fed is ready to trigger the institution's balance sheet reduction "relatively soon". In the press release issued at the end of the board meeting, no precise indications emerged on the near future of interest rates: a rise, the third of 2017, in December is not excluded, but only 35% of the panel of economists expects it. But to justify the move, inflation needs to show signs of recovery from its current "moderate" levels. This means that, for now, the Fed is still implementing an accommodative policy that should not have a negative impact on the stock market: the stock exchanges can concentrate without external pressure on economic data and company earnings.
THE EURO RISES TO 1,1730. ASIA AT HIGHEST SINCE 2007§
The effects on the markets were not long in coming. The euro is running again, traded this morning at 1,1730 against the dollar, the highest for two and a half years. The US currency falls, albeit less, against the yen (110,9) and the Chinese renmimbi (-0,2%). The rise of the Asian markets continues, supported by the expansive policy of the US central bank and by the excellent company accounts. This morning the Morgan Stanley Capital Index Asia Pacific marks new highs since 2007.
In Taiwan (+0,9%, but +13,6% since the beginning of the year) shines Hon Hai, the parent company of Foxconn which announced a 20 billion dollar investment for a new plant in Wisconsin. In Seoul, Samsung shines (+1,6%) supported by the records of the chip division, now world leader. The Korean stock market index, despite the threat from its northern neighbors, has so far achieved a 2017% increase in 22,4. Tokyo also rose (+0,3%). In great evidence Nintendo (+7,5%) after the first sales figures of the Switch console. Hong Kong +0,5%, Sydney +0,3%.
FACEBOOK SUPERSTAR: USERS EXCEED TWO BILLION
Wall Street absorbed the incoming messages from the Fed without tension. The Dow Jones index (+0,45%) scored a new record 21.711,01 points. NASDAQ +0,16%. The S&P500 (+0,03%) was even less moved.
Brilliant accounts of Facebook, announced after the close of the session. The king of social networks closed the second quarter of the year with earnings up 71% to $3,9 billion, equal to $1,32 per share, which clearly exceeded the $1,13 estimated by analysts. Revenue also beat forecasts, rising 45% to $9,32 billion. The group led by Mark Zuckerberg has exceeded the threshold of two billion monthly users for the first time, scoring 2,01 billion against the 1,98 billion estimated on the eve. Mobile advertising revenue hit $8 billion, also beating expectations and accounting for 87% of the total, up from 85% in the immediately preceding three months and 84% a year ago. Facebook gained more than 1% aftermarket. Shares are up more than 40 percent year-to-date.
BOEING SUPERSTAR, OIL ABOVE 50 DOLLARS
The session had been dominated by the flattering accounts of some giants. AT&T, +5% after the results, toned up the telecommunications sector. However, the best blue chip was Boeing (+9,9%). The group said it generated $4,5 billion in cash flow, more than double its estimates. A portion of the profits, 3,4 billion, will be used for the repurchase of securities (buyback) and the payment of dividends. The sharp increase in productivity offset the decline in turnover (-8,1% to $22,7 billion). Conversely, the slowdown in Detroit's accounts continues: after GM, Ford (-1,86%) also confirmed the difficult moment of the market.
Brent oil climbed 1% to $50,7 a barrel after the release of US crude inventories data. The quotation thus returned to levels it had not seen since the beginning of June. The Department of Energy said strategic reserves fell 7 million barrels last week, more than double expectations. Inventories of gasoline and distillates also declined. US oil production fell slightly last week, to 9,41 million barrels a day. In the Italian list, Eni (+0,8%) advanced on the eve of the quarterly report, Saipem (+2%) and Tenaris (+0,1%).
PRICE LISTS ALSO IN EUROPE. TODAY THE BOT AUCTION AT 6 MONTHS
Positive session for the main European markets, awaiting the results of the FOMC meeting. Piazza Affari at the top of the European lists, up by 0,56%, for a closure at 21.577 points. Paris marks +0,56%, followed by Madrid (+0,41%), Frankfurt (+0,33%) and London (+0,24%). In Italy in July 2017 the consumer confidence climate index increased slightly from 106,4 to 106,7 points. Instead, the composite index of business confidence registered a decrease, moving from 106,3 to 105,5 points.
The debt market was up modestly after Tuesday's heavy gains: Italy's performance was better than Spain's. Compared to last night's closing at 157 and an opening at 156 basis points, the gap between ten-year BTPs and Bunds ended the session at 157 basis points. The stability of Italian bonds is particularly significant due to the auction calendar. After the 3,25 billion indexed Ctz and Btp, the Treasury is preparing to place this morning 6,5 billion six-month BOTs. Tomorrow it will be the turn of medium-long bonds up to 7,75 billion with the debut of the new five-year BTP.
On the gray market of Mts at the end of the session, the Bot of January 31, 2018 in auction today pays -0,345%, to be compared with the all-time low of -0,372% of the placement at the end of June. Also on the gray market, the new five-year Btp to be auctioned tomorrow - the August 2022 security with a 0,90% coupon - runs at a yield of 0,929% against 0,799% of the current April 2022 benchmark 1,20% and 0,81% of the placement at the end of June (minimum since December 2016) always on April 2022.
Greece's new five-year, 3 billion euro bond ended up mainly with US and Anglo-Saxon investors with strong interest from speculative funds. In particular, 44% of securities ended up in the USA, 26% in Ireland and the United Kingdom.
AUTO, THE "RED" SPEEDS BEYOND 90 EUROS
The session was dominated by second quarter data arriving from Corporate Italy. Ferrari confirms the vice of acceleration in the opening also on the front of the accounts. There is still a week left before the board meeting on August 2nd which will have to approve the quarterly accounts, but the "Rossa" has already taken off. The stock updated its all-time high, jumping 4,2% to close at €90,10.
Fiat Chrysler also rose (+1%) pending today's board. Kepler Cheuvreux expects a net profit of 835 million euros in the three months (against 321 in the second quarter of 2016). Contrasted Cnh Industrial after the announcement of quarterly results. The stock first fell sharply (-3%) to then return above parity (+0,6% at the close). The operating profit of industrial activities rose by 6,2% to 481 million dollars, revenues of 3,2 .6,655% to 2,1 billion. Net industrial debt at the end of June was $2017 billion, in line with the end of March. In the first months of 24, the market turned out to be better than expected and the group brought the target on revenues from industrial activities to 41 billion, the adjusted earnings per share to 1,4 cents, while the debt target remained stable at 1,6 -XNUMX billion.
TONICA STM, GIANNI LETTA AMBASSADOR OF BERLUSCONI IN TELECOM
Tonica Stm, up 2% as strong quarterly results and guidance bolstered the company's positive outlook. The chip manufacturing group closed the second quarter of the year with revenues up 12,9% to $1,92 billion, +5,6% over the previous quarter. Net income was $151 million, or $0,17 per share, up from $23 million a year earlier. Management said the group is well positioned to meet its year-end targets.
The recovery of Telecom Italia continues (+0,9%). Thanks to the increases in the last three sessions, the quotation has returned to levels it has not seen since May. Yesterday the results for the quarter of Tim Brazil contributed to sustaining the increase, much better than expectations: the carioca company (profits tripled) has embarked on the path of recovery, which makes a sale more likely. Yesterday, the eve of the board meeting on the parent company's accounts, Silvio Berlusconi's former undersecretary to the Prime Minister Gianni Letta paid a visit and was seen leaving the Rome office of Telecom Italia where he met the vice president Giuseppe Recchi and the president Arnaud de Puyfontaine .
FINCANTIERI, LES ECHOS PERPLEXED ABOUT MACRON'S "POKER STROKE".
"Minister Le Maire's poker coup - writes Les Echos this morning - risks damaging Franco-Italian relations in a significant and lasting way". Not everyone in Paris appreciated theultimatum of the French government on the shipyards of Saint Nazaire: either Fincantieri's “Italian friends” accept 50% cohabitation in Stx with local shareholders or the State will exercise preemption. An unacceptable position that has aroused a firm Italian reaction. Meanwhile, the Fincantieri stock (-8,7%) suffered a serious setback, returning below 1 euro from the all-time high of 1,10 despite the good results for the half-year: net profit of 11 million, up on the 5 million same half of 2016 and an Ebitda of 146 million (from 113 million).
LVMH DRAILS LUXURY. GOOD ENEL AND CAMPARI
On the other hand, a positive note comes from Paris for the luxury accounts. Lvmh, the world's leading power in the sector, closed the six-month period with sales of 19,7 billion euros, up 15%. Net income was 2,1 billion, up 24%. “Lvmh recorded an excellent semester – commented the chairman, Bernard Arnault – In a context that remains uncertain, we look at the second part of the year with prudence”.
Brilliant accounts also for Moncler (-0,33%). In the first six months of 2017, Moncler achieved revenues of 407,6 million euros, up 17% at constant exchange rates. "Since listing to today, it has been the fourteenth consecutive quarter of double-digit growth - commented the president and CEO, Remo Ruffini - also in the second quarter of 2017, turnover grew by 20% with the positive contribution of all regions and all channels".
Bank stocks moved little. Unicredit -0,4% after having denounced the incursion of hackers on the computer system. Ubi Banca, at 4,04 euro, left 1% on the ground. Lower variations in the rest of the sector. Understanding +0,6%.
Enel goes up (+1,2%). Equita Sim confirmed the buy recommendation and the target price of 4,7 euros on the stock. According to the experts, the accounts for the first half of the subsidiary Endesa are “less weak than expected.
Prelios +0,3%, to 0,1042 euro, below the tender offer price of 0,105 euro that Davidson Kempner, manager of Burlington Loan Management, will have to launch after the agreement for the acquisition of 44,86% of the company from Intesa Sanpaolo, UniCredit, Pirelli and Fenice.
Campari +1,6%. CRIF Ratings confirmed the “BBB-/Stable” rating after the sale of the Carolans and Irish Mist brands to Heaven Hill Brands and expects “satisfactory cash generation” for the current year.
