Troops are already lined up in anticipation of what promises to be the first battle of the Biden presidency: it will not be easy to get $1.900 trillion in support for citizens and businesses approved against the barrage of Republicans. But the Democrats, who boast a majority hanging by a thread in the Senate, keep going by counting on "reconciliation", or the possibility (allowed only once for the legislature) to approve the maneuver by a simple majority.
The markets are following the key game with legitimate apprehension. The Nasdaq (-1,69%) accuses the blow, pushed down by Apple (-2%) and Tesla (-4%), in fear of a liquidity crisis in the event of a political stop. But, at least for now, the network guaranteed by the Fed and Treasury is working. Yesterday, Lael Brainard, the governor of the Federal Reserve considered close to the minister, took care of Janet Yellen's expansive line: the increase in bond volatility delays the end of support policies.
The warning worked. Nasdaq futures gained 0,5% this morning. The 10-year Treasury Note stands at 1,40%, while the interest rate curve remains as steep as it needs to be, at a level of inclination that is good for finance: the spread between the two-year and the ten-year period is 128 basis points.
The oriental price lists are positive. Tokyo's Nikkei climbed 0,4%. Hang Seng of Hong Kong +1,8%, CSI 300 of the Shanghai and Shenzen lists +1,3%. The sharp contraction in the service sector in China leaves no signs: the Caixin index dropped to its lowest level in the last ten months, penalized by travel restrictions imposed by the Beijing authorities during the winter.
Sydney's S&P ASX 200 index +0,8%: Australia's GDP rose more than expected at the end of the year, +3,3%. It's not just the effect of the increase in raw material prices: the consumption component also rose a lot. By mid-2021, Australian GDP will have zeroed the delay from Covid -19. The harsh contrast with Beijing does not matter, well illustrated by the collapse in investments (-61%) as a retaliation for Canberra's requests for precise information on the epidemic.
The US stock markets were in the red yesterday: Dow Jones -0,46%, S&P -0%. The president of the United States, Joe Biden, has announced a partnership between Merck and Johnson & Johnson to accelerate the production of vaccines against Covid-81. Merck will make available two of its plants in the United States. Biden also called on states to prioritize teacher vaccinations.
Brent oil is recovering slightly after four sessions of decline, at 63 dollars a barrel. OPEC+ should decide tomorrow to open the valves that regulate the flow of crude oil quite a bit: Bloomberg reports it. Saudi Arabia would have agreed to change its opposition to the overcoming of the current punished production regimes. The latest analyzes would have shown that the production surplus due to the backlash of the pandemic will be completely absorbed within six months.
INFLATION UNDER CONTROL, ONLY MILAN IN RED
The inflation syndrome is less scary. From the data on consumer prices in the euro area released yesterday morning it emerges that last month the year-on-year increase was 1,1%, slowing down from the +1,4% in January. The race in prices, therefore, shows no signs of reawakening: only +0,9%, like the month before. Of course, leaps forward cannot be ruled out, but these will be simple episodes: consumer prices, for example, should rise in March, but above all in April, because the effects of the collapse in the price of crude oil which took place in the spring of 2020. The phenomenon, as central bankers are scrambling to support both in the US and at the ECB, is still under control. But the markets, stressed by the ups and downs of the last sessions, are struggling to restart. And so stock markets are taking a break after a period of volatility that has affected both stocks and bonds.
BUSINESS PLACE +4,60% SINCE THE BEGINNING OF 2021
In Piazza Affari, the black jersey fell at the end of a weak session waiting for the Dpcm measures, the first of the Draghi era, which will enter into force on March 6 and will be valid until April 6, with rules and prohibitions also for Easter and Easter Monday. The Ftse Mib drops 0,78%, but remains above 23 thousand points.
Since the beginning of the year, the FtseMib index has gained 4,60%, a performance in line with the trend in the rest of the Eurozone. Global Eurostoxx +4,40%.
The other lists of the Old Continent contrasted: Amsterdam and Madrid drop 0,2%.
LINDT +2,6%: PANDEMIC PUSHES CHOCOLATE
Zurich +1,03%. Swiss chocolate maker Lindt & Spruengli jumped 2,6% after announcing it was aiming for a 6 to 8% increase in sales this year on pandemic-driven demand.
GERMAN EMPLOYMENT WEAK
Frankfurt rises by 0,16%. In February, the number of unemployed people in Germany grew by 9 units in seasonally adjusted terms, to 2,752 million. A Reuters poll had predicted a drop of 13 units. The unemployment rate remained unchanged from the previous month at 6%.
LONDON CELEBRATES THE VACCINE, SALES ON BIG OIL
London +0,7%. In Britain, where the vaccination campaign is well advanced, deaths from Covid 19 have dropped by a quarter in the space of a week. Oil majors Shell, BP and Total fell 1,2% to 1,7% after crude prices tumbled on fears of slower demand in China.
BNP PARIBAS TRAINS PARIS
Paris +0,3%. L'Oréal shines (+1,05%), awarded by Morgan Stanley. Even more toned Bnp Paribas (+2,68%): according to Natixis it will be one of the stocks that will make the most of the "reflation trade".
PANETTA (ECB): WE MUST BUY MORE
The European Central Bank should ramp up its bond purchases or even increase its entire bond purchase budget if needed to keep yields down. This was stated by Fabio Panetta, member of the ECB board, after weeks of constant growth in yields. “We should not hesitate to increase the volume of purchases and to spend the entire PEPP envelope or more if necessary,” Panetta said in a statement, referring to the ECB's Pandemic Emergency Purchase Programme. “By keeping nominal rates low for longer, we can provide a strong anchor to preserve accommodative financing conditions,” he added.
The Central Bank's determination was not enough to avoid a new setback for the bond market in the end, pending the launch of the new green BTP.
TODAY THE FIRST GREEN BTP, SPREAD STILL ABOVE 100
The Italy-Germany yield differential stands at 103 basis points from 101 at the start and 100 at the end yesterday. The ten-year reference rate is worth 0,68% from 0,66% at the opening and after a maximum session at 0,71%.
Strong anticipation this morning for the debut of the Green Bonds. The Treasury enters a very lively market. In the 2018-2021 accounts, those affected today by the new title, 35 billion of expenses have been identified that meet the destination and transparency criteria necessary to find coverage with the Green Bond. There are six lines of eligible investments, which concern energy efficiency, low-emission transport, infrastructure for the circular economy, protection of biodiversity and research on these five fields.
The Treasury has mandated a pool of banks to launch the first security, the proceeds of which will be used to finance projects related to the environment. In charge of the issue are Bnp Paribas, Crédit Agricole Corp. Inv. Bank, Intesa Sanpaolo, JP Morgan and NatWest Markets. The bond will expire on April 30, 2045.
ATLANTIA BLACK JERSEY, THE SALE OF ASPI GOES AWAY
Weighted by utilities and oil companies, the Milan Stock Exchange closed the session lower. The worst stock was Atlantia (-3,7%). The company has sent a letter to the consortium headed by CDP to obtain an improvement in the offer on Aspi, both from an economic and contractual point of view. However, while Cdp would be inclined to negotiate, Mquarie would be unwilling to review the price, and this could make it necessary to reformulate the consortium. Times are therefore getting longer again.
STELLANTIS BRAKING. TODAY THE FIRST ACCOUNTS
On the eve of the first accounts, Stellantis (-0,22%) marks a modest decline linked to the trend in registrations in the month of February. Italy, Spain and France showed a negative trend, with a drop of 21%, in line with that recorded in January (-20%), due to the restrictive measures to combat the pandemic. The recovery of the market will be driven by the volumes of March, April and May (the months of the first wave) which in 2020 were essentially canceled, and by a continuous improvement in the second half of the year.
PIAGGIO +0,2%. THE TWO WHEELS ACCELERATE
Two wheels are better. Piaggio (+0,2%) closed 2020 with a net profit of 31,3 million euros, down on 2019 by approximately 33%, after a second half in which it almost doubled, partially canceling the impact of the pandemic in the first part of the year. In Italy and France, the two-wheeler market grew by 4% in February.
OILS CONTRESTED: SAIPEM SUFFERS, BENE TENARIS
Oil travels slowly, at 63,62 dollars a barrel. At Piazza Affari, sector stocks are mixed ahead of the OPEC+ meeting and after the 2021 forecasts presented in recent days: Tenaris (+1,63%) is the best blue chip on the list, while Saipem (-2,64% ) is among the worst. Eni loses 0,72%.
Saras unchanged: refining margins recovered slightly last week in the Mediterranean area.
UNICREDIT, TODAY THE ORCEL TEAM. A SPAC FOR MUSTIER
On the financial front, Banco Bpm +0,5%. The Corriere della Sera writes that an important part of the shareholders is in favor of the merger with Bper: the hypothesis of aggregation with Unicredit is losing share.
The board of directors of the institute in Piazza Gae Aulenti will today complete the list of new directors in view of the renewal of the board which will be submitted to the vote of the shareholders on April 15th. The list of candidates includes the new CEO Andrea Orcel, chosen in January to replace Jean Pierre Mustier at the helm of Italy's second largest bank. UniCredit has appointed Ranieri de Marchis, the Co-Chief Operating Officer, as general manager pending the arrival of Orcel. One post to be filled is the one currently held by former Bank of America Merrill Lynch banker Diego De Giorgi, who has joined Mustier in setting up a Special Purpose Acquisition Company (SPAC) to invest in European financial firms.
ADVANCE LUXURY
Moncler +0,73%: Kepler has raised the target to 60 euros, the judgment remains Buy. The rest of the luxury goods did well: Salvatore Ferragamo +1,13%, Cucinelli +0,64%, Tod's +0,76%.
Generali (+0,5%) reorganized its asset management activities.
THE DIVIDEND PUSHES ESPRINET
Esprinet (+5%) closed last year with double-digit growth in turnover and margins. Announced a dividend with Yield greater than 5% on current prices.
