The Fed raised rates by a quarter of a point, confirming that five increases of the same magnitude are expected over the next two years: three in 2018 and two in 2019. The final communiqué from the US central bank, however, also mentions the low level of the inflation. Janet Yellen, in her last press conference as president, she refrained from challenging comments on the political front. "The tax reform that the Trump administration is about to bring about - she said - should support American economic growth, but the order of magnitude and its duration remain uncertain". The soft tones of the president had an impact on the dollar: the euro rose by 0,7%, to 1,182. The Treasury Bill strengthened to a yield of 2,35%. This morning it is at 2,36%.
AGREEMENT ON US TAX REFORM: THE VOTE BEFORE CHRISTMAS
Meanwhile, a short distance from the headquarters of the Fed, the Republican representatives of Congress and the Senate announced that they had reached agreement on the text of the tax reform to be submitted to the vote before Christmas: the tax rate for businesses will drop to 21%, expected $10 deduction for all taxpayers.
The attention of the markets, however, has already moved to today's appointments: the FCC federal agency should vote to abolish net neutrality, starting a real revolution in the balance of the Internet world.
TO MURDOCH THE 5% OF TOPOLINO
No less sensational is the "deal of the century": today, before the opening of trading on Wall Street, the sale of a large part of the assets of XXI Century Fox (including Sky) to Walt Disney for 75 billion dollars (including debts). Rupert Murdoch becomes a shareholder in the entertainment giant with a 5% stake. Fox stock lost 3,96% yesterday, Walt Disney closed with a gain of 0,17%.
Wall Street achieved the fourth consecutive record: Dow Jones +0,3%; the Nasdaq (+0,2%) and the Russell 2000 index of small caps (+0,5%) also rose. Slight correction for the S&P 500 index (-0,05%). Financials corrected downwards (-1,5%) after confirmation of the obvious rise in the cost of money.
CHINESE RATES ALSO GO UP
On the interest rate front, the Fed's decision (taken by a majority, two against) was in fact largely taken for granted. Not so the surprise mini-raise decided this morning by the Chinese monetary authorities, which adjusted the terms of short-term loans by 0,05%.
Meanwhile, the Hong Kong Stock Exchange is down by 0,3% and the CSI300 index of the Shanghai and Shenzhen stock exchanges by 0,6%. Seoul rose, where the Kospi index gained 0,9% in the final session. The Japanese Stock Exchange is starting to close down by 0,5%, with the yen strongly recovering against the dollar.
Brent oil traded at $62,8 a barrel this morning, up 0,5%, after closing 1,4% lower yesterday, mainly on news of renewed US crude output increases.
In Piazza Affari the Oil&Gas sector saw profit taking: Tenaris – 2,39%, Saipem -2,35%, Eni -0,85%.
YELLEN: IT IS NOT FOR THE FED TO INTERVENE ON BITCOIN
Bitcoin closed down at $16.650. “It is a highly speculative asset, but it is not up to the Federal Reserve to intervene on the regulatory front,” Janet Yellen said at the end of the FOMC meeting.
TOWARDS THE ELECTION: PIAZZA AFFAIRI MISSES
Suddenly, on the eve of today's ECB directorate, the markets remembered that Italy will soon (probably on March 4) be voting. This non-news was enough to trigger the alarm bells on the state of health of Italian banks. Paradoxically, the good data on the economic situation in industry does not help (+3,1% industrial production, ninth consecutive month of increase): the markets fear that, given the strength of the economic situation, Mario Draghi will today be forced to review the dove tones at the press conference.
Milan was the worst Stock Exchange: the Ftse Mib index fell by 1,15% to 22.461,55 points. From a technical point of view, however, the threshold of 22.450 was not violated, thus keeping alive the possibility of a rebound.
Since the beginning of the year, the increase has been reduced to 17%, in any case double compared to the other price lists. This helps to explain yesterday's profit-taking, explained by the political tensions after the indication of March 4 as the probable date of the elections (as if the vote in next spring were a novelty).
GOLD ACCOUNTS FOR INDITEX (ZARA)
The decreases in the other markets were more modest: Paris -0,51%, Frankfurt -0,44%. Madrid defends itself better (-0,27%) thanks to the performance of Inditex (+3,1%): the parent company of Zara achieved sales of 6,3 billion euros in the third quarter, (+6% compared to the same period of 2016) for a net profit of 975 million. Outside the euro area, London was flat (-0,05%). Salt Zurich (+0,35%).
DEBT FEVER RETURNS: BTPS OVER 1,8%
Back to warming up in the face of debt. The Italian secondary led the decline in European government bonds, pending the outcome of the monetary policy meetings of the central banks and the Spanish auctions this morning.
The yield on the ten-year Btp broke the key threshold of 1,75% upwards, reaching 1,8%. To corroborate the suspicion of new speculative pressures on Italy, the comparison with Spain is enough: the Bonos yield down 3 points, that of the BTP by 9.
The spread on the Bund is close to 150 basis points. Ing believes that, as the political elections approach, the spread will return to around 200 basis points. The rumors of an exchange promptly confirmed in the afternoon contributed to the weakness: next Friday the BTP August 2039 will be offered, coupon 5,00% against a maximum of five bonds maturing in 2018/19. Today Spain will offer between 3 and 4 billion of government bonds maturing in 2021, 2027 and 2032.
FORMER POPULAR AND UNICREDIT UNDER FIRE
In a session dominated by the minus sign, the pressure on Italian banks increased, especially on the former co-operative ones penalized by the possible impacts of the regulatory changes and by the fear of new squeezes on the management of NPLs: the basket of the sector lost 2,9% against of an almost flat European sector (-0,05%). Among the worst of the main list Bper (-6,3%), Bpm bank (-4,52%) And Ubi (-4,06%).
In sharp decline UniCredit (-4,65%) despite data emerging from the Investor Day in line with the plan announced twelve months ago and with the promise of a richer dividend from 2019. The goal, considered too conservative by analysts, is to be a “ winning pan-European bank” capable of absorbing the expected regulatory impacts with the organic generation of capital by maintaining a Cet1 above 12,5% and with a payout that goes from 20 to 30% in 2019 and could rise up to 50% from the year following.
GENERALI AND CNH BACK THE TREND
Insurance goes against the trend. General, despite slowing down in the afternoon, it closed with a gain of about half a point: Bank of America Merrill Lynch raised its recommendation to Buy from Neutral. The target price is raised to 18 euros from 16 euros. Improving market conditions and a "gradual increase" in dividends are the two strengths that justify the positive opinion.
Cattolica Insurance (+0,27%) stands out among the few positive titles: Banca Imi ratifies the Add rating with a target of 10 euros. the gain since the beginning of 2017 (in particular after the entry of Berkshire Hathaway) is still +66%, after -24% in 2016.
Other positive notes of the day. Advance Cnh Industrial (+1%), best blue chip. The security is among the top picks chosen for 2018 by Banca Imi. Analysts cite improved guidance, quarterly results ahead of estimates and positive outlook for the sector, among other things. Yesterday the US Department of Agriculture revised upwards the estimates on wheat production, indicating that the 2017-2018 season will be a record one and will update the highs reached in the previous one.
He also defends himself Fiat Chrysler (-0,26%). From Korea comes the confirmation that the signing of a technology collaboration agreement between Hyunday (a leader together with Toyota in the development of hydrogen engines) and the group led by Sergio Marchionne is imminent.
On positive ground too stm (+0,86%) which yesterday announced the purchase of Atollic, a company specializing in software development tools. Equita Sim raised the target price from 20,3 to 20,6 euro, confirming the hold recommendation.
He defends himself Campari (-0,46%): Mediobanca Seurities raised its target to 6,1 from 5,4 euro.
TELECOM SUFFERS, GENISH ASKS FOR A TABLE WITH AGCOM
Deep red for Telecom, -2,96%. "During the meeting with the president of the Communications Regulatory Authority, Tim proposed the opening of a technical table to analyze together any improvements to be made to the current network governance model". He said it Amos Genish, CEO of the company, leaving the Ministry of Economic Development where he met Minister Carlo Calenda. The president of AgCom Cardani, continued Genish, "welcomed the suggestion". Mediaset -2,6%.
STOP FOR THE UTILITIES. IN LUXURY LANDSCAPE CUCINELLI
Sudden slowdown in European utilities, crippled by the rate hike. in Frankfurt He Germany's largest electricity producer, falls 9%, worst stock in the Dax index. At Piazza Affari Enel lose 1%, A2A the 2,2%.
Drift in luxury Brunello Cucinelli (-6,2%) after the rejection of Exane, which demoted the cashmere producer to underperform.
MOLMED, FALCK, BEFORE: SMALL CAP IN THE FORE
Molmed + 13,88% after obtaining the first national marketing authorization for the drug Zalmoxis.
New raises for Falck Renewables (+2,66%), which continues the race started yesterday after the upward update of the industrial plan targets.
First Industries jumped 6,86% after Mediobanca Securities raised its rating to “outperform”.
