Mario Draghi denied yesterday that he had ever treated Italy with respect in his capacity as president of the ECB. But the Bel Paese's debt of gratitude to the banker continues to grow. Yesterday super Mario, despite the hostile vote of the president of the Bundesbank, Jens Weidmann, accomplished yet another mission. The decision to extend QE until December 2017, albeit with a reduction in purchases to 60 billion a month starting in April, will allow the Eurozone economy to fully exploit the effects of the upcoming US rate hike.
The markets have already adapted to the new situation: stock exchanges on the rise, euro around 1,06, down from the peak of 1,08 before Draghi himself clarified that the cut to 60 billion does not mark the start of tapering, i.e. of the progressive decline in purchases, which could actually go back up if necessary.
This is especially good news for Made in Italy, underlines the economist Daniel Gros. “The impact of the devaluation of the euro against the dollar – he writes – is three times higher in Italy than in Germany: the Germans specialize in investment goods with a price that is not very permeable to the exchange rate. The opposite of Italian light exports”.
The possibility of finally accelerating growth rates is looming for Italian manufacturing. Woe to waste the opportunity offered by shield of dragons which not surprisingly reiterated that "countries that need reforms must do so regardless of political uncertainty, because the best way to deal with uncertainty is to restore growth, employment and job creation".
ALL US LISTS MARK NEW HIGHS
Meteo Borsa signals upward winds for all price lists. Asian stock markets rose starting from Tokyo, +1,2% ( +3% over the course of the week), driven by the decline in the yen against the dollar. Nintendo shines on the list (+8%): next week there will be the launch of super Mario. Weak Hog Kong and Shanghai. Restrictions on ATMs in Macau weigh heavily, with significant damage to casino activity.
Still clusters of records on Wall Street: Dow Jones +0,33%, S&P 500 +0,22%, Nasdaq +0,44%. In the three cases, as well as for the Russell 2000 (the basket of SMEs) a new absolute record was set. Leading the race were again financials (+0,9% the sector basket), the main protagonists of the rally. Goldman Sachs advances 2,5%. AMD climbs 8,3% after a Bank of America report that promoted the stock to Buy from Underperform.
WALL STREET CRAZY FOR YOGA: LULULEMON +15%
A separate mention deserves Lululemon, a clothing company specializing in suits for yoga and other oriental disciplines, which achieved an increase of 15% after the brilliant quarterly. Bank of America raised its recommendation to Neutral with a target price of $70, while broker Evercore raised its recommendation to Buy, with a target price of $80. The company capitalizes about 9 billion dollars.
Oil is up with Brent at 53,6 dollars a barrel (+1,3%), Wti up 1,4% to 50,3 dollars. The rise in crude oil attempts to compensate for fears that the cuts decided by OPEC may not be sufficient to balance the market.
Oil markets struggled, with Eni up 0,9%. Tenaris -0,9%. Saipem reported a 1,9% decline after the confirmation of the hold recommendation (negative outlook) by Jefferies.
THE MILAN RALLY CONTINUES, SPREAD TO 161
The European stock exchanges reacted yesterday with vigorous increases to the ECB's decision to extend the stimulus program to the economy beyond the March 2017 deadline, extending it until the end of next year. In particular, the banks ran.
In Milan, the FtseMib index rose by 1,6%, to 18.428 points. The Paris Stock Exchange gained 0,9%, Frankfurt +1,7%. In the wake of the ECB's decisions, the yield on the ten-year BTP rose to 2,0% from 1,88%. The yield on the Bund rises to 0,38% (highest since January), from 0,34%. As a result, the spread widened by 8 basis points to 161.
On the trend of the euro area, Mario Draghi specified that the economy will grow in a moderate but solid way. The ECB's research office confirmed the eurozone's growth forecasts at 1,7% for 2016 and raised its estimate for 2017 to 1,7%, from 1,6%. As for inflation, the ECB sees price growth of 0,2% in 2016, 1,3% in 2017, 1,6% in 2018 and 1,7% in 2019. The 1,7 2019% expected in 2, Draghi said, "is not yet close to the ECB's target", which is inflation of just under XNUMX%. The ECB president then said that "the risk of deflation has largely disappeared".
THE BANKING RISE CONTAGUES EUROPE
Another sharp rise in bank stocks in Piazza Affari: the sector index marked an increase of 4%. The relaunch of the sector at European level was also robust (European Stoxx +2,3%) favored by the announcement that the ECB will also be able to buy bonds with yields lower than its deposit rate (-0,4%). A move that in perspective increases the profitability of the banks.
Spanish banks performed in particular: Santander +4,9%, BBVA +4,4%, in Paris Société Générale rose by 4,3%.
UNICREDIT, AFTER THE SALE OF PEKAO, IT'S THE TURN OF PIONEER
At the center of attention is Unicredit, +2,98% (+28% since the beginning of the month), on the eve of the presentation on Tuesday in London of the new industrial plan which envisages a strong capital increase (around 13 billion) accompanied by cost cutting and from the governance review. In view of the appointment, CEO Jean Pierre Mustier accelerated the dismissals in view of Monday's board meeting.
Yesterday was the turn of the sale of around 40% of Banca Pekao (total proceeds of around 3 billion). The signing of the sale of Pioneer to the French of Amundi, the asset management company owned by Crédit Agricole and Société Générale for an amount of around 4 billion, should arrive tomorrow or Sunday. To this must be added the sale of another 30% of Finecobank, +3,1% (900 million), and the sale of a package of 20 billion Npl.
MPS PREPARES THE STATE PARACHUTE
Monte Paschi's rally continued (+4,1%) which asked the ECB for an extension to 20 January to complete the capital strengthening operation for a total of 5 billion euro compared to the deadline initially set at 31 December. Frankfurt's response will come today. The forecasts, in this regard, are not positive. Hence the prospect of triggering plan B, i.e. the intervention of the State that has been attempted to avert until the end. In this case, a decree law could be passed to allow for the forced conversion of subordinated bonds. The bondholders will receive shares in exchange which will then be purchased by the Treasury. Or we will proceed with a precautionary increase. There are various hypotheses, but one fact is certain: bailouts, in any form, are appreciated by the market.
In the rest of the sector, impressive leaps were taken by Banco Popolare (+9,7%) and Pop.Milano (+10%). Brilliant Understanding (+3,3%). The Bank will provide a substantial part of the financing to the consortium formed by Qatar and Glencore for the purchase of the stake in the Russian state oil giant Rosneft.
GENERALI PROMOTED BY HSBC. THE USA HOLDS BACK AMPLIFON
Among the blue chips, Generali flies (+ 4,5%) promoted to Buy by HSBC. In asset management, Banca Mediolanum shines +7,73%. Telecom Italia continues to grow (+1,3%) together with all the European telecommunications companies (Telefonica +3,8%). Industrialists did well: Fiat Chrysler +1,9%, substantial increases for StM (+4,7%) and Prysmian (+2,5%).
In the rest of the price list, Amplifon fell (-5,9%): the decrease was triggered by the decision of the American agency FDA (Food and Drug Administration) which announced that starting today in the USA to buy a hearing aid it is no longer medical prescription required.
