It was supposed to be Fed day, but the speeding up of the talks between Fiat Chrysler and Peugeot it has overshadowed the decisions, moreover taken for granted by the US central bank. Jerome Powell announced the third rate cut of 2019 by a quarter of a point, making it clear that, barring a sudden worsening of the economy, no other interventions are planned. For the anger of Donald Trump which calls for more robust action in the face of the slowdown in GDP growth, "only" +1,9% in the third quarter against the 3% promised by the president.
Asian stocks are mostly up this morning:
- Hong Kong's Hang Seng +1%, Tokyo's Nikkei +0,3%, Seoul's Kospi +0,9%, Singapore's Strait Times +0,7% rose.
- The Shanghai and Shenzen stock exchanges are at parity, weighed down by the new slowdown in China's industrial activity: the manufacturing PMI dropped to its lowest level in the last three and a half years, worse than expected.
- The dollar weakens, both against the Japanese yen and against the Chinese yuan.
6 PEUGEOT REPRESENTATIVES ON THE BOARD, 5 FCA
But, for once, monetary policy is giving the headlines to an operation which also impresses with its speed of execution. The official announcement of the wedding between FCA, yesterday in flight by 9,53%, and PSA + 4,5% will arrive this morning after the go-ahead from the councils who have already approved the operation from which a group will be born with a tour of 'aggregate business of 180 billion euros and a capitalization of 45 billion. The board of the new company based in the Netherlands will be made up of 11 members: six appointed by PSA, 5 by FCA. President will be John Elkann, CEO Carlos Tavares which will be guaranteed a mandate of 5 years.
5,5 BILLION COUPONS ARRIVED FOR LINGOTTO SHAREHOLDERS
Peugeot shareholders will receive an extraordinary dividend of 3 billion on the sale of the 46% held in Faurecia (components). Fiat Chrysler shareholders, on the other hand, will benefit from cash income of 5,5 billion plus another 200-300 million for the sale of Comau. Exor, the number one shareholder of Lingotto, gained 3,7%.
The markets and analysts were positive with the exception of Bernstein's usual skeptic Max Warburton: “PSA does not bring benefits to the USA and Latin America, FCA to China. Furthermore, the operation does not improve the prospects of Alfa and Maserati”.
POWELL: THE US ECONOMY IS IN "A GOOD PLACE"
Despite Trump's grumbling, the markets welcomed the central bank's decisions with an increase: Dow Jones +0,43%, Nasdaq +0,33% as well as the S&P 500 index which reached a new all-time record to 3.046 points.
Wall Street appreciated the words of President Jerome Powell ("monetary policy is appropriate to the situation") in anticipation of the announcements of the Big arrived after closed markets which fueled optimism.
APPLE +3% RISES TO 1,1 BILLION DOLLARS
PC sales are lagging behind, but the iPhone holds, and Apple's smartwatches and other electronic products are doing great, demonstrating that Apple, while waiting for the proceeds from streaming, is succeeding in its mission to expand its offer. Revenues exceeded 64 billion (against the 63 expected) of which 12,5 billion related to services. During the quarter, the company distributed $3,5 billion in dividends and repurchased shares for $18 billion. For the current quarter, the most important period of the year, Apple aims to reach at least 85,5 billion dollars in revenue, up to a maximum of 89,5 billion, thanks once again to the iPhone and new wearable products. “I think the stock is very undervalued” said CFO Luca Maestri. In the aftermath the shares rose by 3%, for a market capitalization of 1.100 billion dollars.
FACEBOOK +4% : 1,6 BILLION ACTIVE USERS
Facebook is also rising among the controversies. Active users on the social network have risen to 1,6 billion (+9%), revenues 17 billion dollars. Net income rose 6% to $19 billion in the third quarter, better than expected. After the stock exchange, the title rose by 6,1%. But criticism is also growing for the decision to accept political advertising without any verification, opening the door to fake news. Twitter, on the other hand, has decided to exclude advertising messages of a political nature. Other Bigs like Starbucks have announced very positive results, beating estimates.
PIRELLI SWISSES AT PIAZZA AFFARI -11%
Closing in no particular order yesterday for the European lists, enlivened by FCA and Peugeot, but ballasted by the banks. And from other data, not positive, for the automotive world.
The clamorous thud of Pirelli -11% is striking. The company closed the third quarter of 2019 with €1,38 billion in revenues, up 6,7% on the year, +4% on a comparable basis. Ebit margin at 17,7%, down 160 basis points year over year. Sales are slightly better than expected, profitability disappoints. The Bicocca company is in good company: yesterday both Michelin and Continental were at the center of violent protests over the decision to cut jobs. There is an ongoing contraction in investments in car components, also due to the characteristics of the electric. Brembo -3% also under braking.
BLACK DAY FOR BANKS. SALT PARIS THANKS TO L'OREAL
- Despite FCA's exploits, Piazza Affari -0,15% closed 0,15% in negative ground at 22.646 points.
- Paris did better +0,45% thanks to the exploits of L'Oréal +7,5% and Essilor-Luxottica +1,05% after the calculations;
- Frankfurt loses ground -0,2% sunk by Deutsche Bank's bad quarter -7,6%: the bank lost 942 million;
- Madrid -1,24% under pressure from Banco de Santander -6.9%%; Zurich -0,01%, where Credit Suisse lost 2,5%, although third-quarter earnings beat estimates.
- London +0,4%.
ECB QE KICKS OFF, TREASURY AUCTIONS GOOD
The new cycle of Qe purchases of the ECB, strongly desired by Mario Draghi, kicked off yesterday, with value date November 20st, which will proceed at a rate of XNUMX billion a month.
Meanwhile, interest in Italian debt continues: yesterday the Mef placed 6,25 billion euros of Btp and CCTeu, receiving offers for over 9 billion even if with slightly higher yields. "The result is very satisfactory if we consider that the Treasury placed almost 18 billion securities outside the periodic auctions in October", commented an operator, underlining how Italy is the only country in the Eurozone which, despite , continues to offer a real yield on government bonds, keeping demand alive.
The director general of the Treasury Alessandro Rivera told Reuters this afternoon that Via XX Settembre is watching the developments of the LSE/Refinitiv dossier with great attention, in consideration of the possible repercussions that the acquisition by the London operator could have on Mts, the first Btp trading platform.
IT KEEPS MANAGED, BANCA IFIS COLLAPSES
The banking sector is also depressed in Piazza Affari: Unicredit -2,2%, Intesa Sanpaolo -1,6%. Ubi Banca -2%. Asset management held steady: Azimut +1,4%. Azimut's management has confirmed the target of over 10 billion euros of investments in alternative and illiquid assets over the next five years. Banca Generali and Mediolanum +0,1%.
Banca Ifis collapses -7%. The institute has abandoned the negotiation with Credito Fondiario, with which it was studying a possible alliance in the debt servicing and debt purchasing sectors. The press release speaks of "difficulties encountered in defining a satisfactory negotiating agreement for both parties in terms of governance structures". Of note is the leap of Amplifon +4,5%.
