The Fed must proceed “with caution” in raising interest rates. According to Janet Yellen, "developments in the international economy suggest that it is appropriate to proceed with caution in monetary policy interventions". Therefore, “achieving the employment and inflation targets will likely require a slower path to rate hikes than estimated in December”. Thus, speaking at the Economic Club of New York, the Fed chairman responded yesterday evening to the diagnoses of some of his colleagues who had hinted at the possibility of a rate hike as early as April: increases, however, will only be discussed in June .
APPLE AND MICROSOFT FLYWHEEL, ONLY TOKYO BRAKS
The response of the US markets was immediate yesterday evening. Wall Street, negative until then, took the upward path: the S&P index closed up by 0,9%, Dow Jones +0,6%, Nasdaq +1,7%. Driving the rise were Apple (+2,4%), favored by the closure of the dispute with the FBI, and Microsoft (+2,2%), driven by the results arriving from numerous IT companies.
But the lesser pressure on rates has slowed the race of government bonds (the yield on 1,80-year T bonds has fallen to 1,88 from 112,63) and of the dollar, down against both the yen (1,1206) and the euro (1,1198 against 0,6). As a consequence, the Tokyo Stock Exchange is down this morning (-2011%), which is weighed down by the drop in industrial production, which has never been so low since the days of the 1,9 earthquake. The other Asian stock markets were positive: Shanghai and Shenzhen rose by 1,4 .2,8%, Hong Kong +XNUMX%. Oil is also recovering after yesterday's sharp drop (Brent -XNUMX%).
FUTURES UP IN EUROPE. FLAT CLOSURE IN MILAN
The positive breeze arriving from the US should favor a positive start for the European stock markets, yesterday at the window awaiting the words of the Fed president. Futures signal an upward opening in London, Paris and Frankfurt. Milan closed yesterday in a draw at the end of a lackluster session. The Paris Stock Exchange rose by 0,8%, Frankfurt +0,3%.
THE CARIGE BLAZE DOESN'T FIRE THE BANKS
It was, in particular, another day of passion for European banks (the Stoxx index for the sector -0,7%). “The sector – notes Anthilia strategist Giuseppe Sersale – is below the levels prior to the announcement of the new ECB measures. In other words, the market currently attributes a modest effectiveness to LTROS and credit purchases, continuing to discount a crisis in profitability for institutions”.
The flamed Carige (+4,8%) entered this context. The Bank has confirmed that it has received an offer from the American fund Apollo for the purchase of its non-performing loans, offsetting the effects with a capital increase of 550 million which would lead the fund to conquer the absolute majority of the Genoese institution. The novelty was welcomed with satisfaction by the market, even if the Ligurian bank's non-performing loans were valued by Apollo at around 17% of the nominal value, confirming a much more stingy yardstick than Italian bankers hoped for. Also for this reason, with the exception of Intesa (+1%) and Mediobanca (+0,6%), the sector slipped into the red during the session.
MPS FALLS, STILL SALES ON POPOLARE-BPM
Banco Popolare (-3,7%) and Banca Pop.Milano (-3,6%), protagonists of the merger from which the third Italian bank will be born, closed again with sharp declines. The French broker Exane rewarded the operation with an outperform judgment on the two institutes (target price on Bpm at 1,15 euro + 29%, on Banco Popolare 11,80 euro, -6%). In a report dedicated to the merger, Exane positively judges the operation which will lead to the creation of an institute "with a strong competitive position in Northern Italy and solid capital parameters". Exane estimates that in 2018 the new institute will be able to generate a net profit of 1 billion euros, thanks also to cost synergies for 290 million euros.
Unicredit lost -2,9%. Ubi fell by 2%, Pop.Emilia -4,1%. The most sacrificed institution was Monte Paschi (-4,7%): despite the denials, fears about the launch of a strong (and necessary) capital operation are growing. "Investors are probably thinking about the value that Apollo attributes to Carige's NPLs and then transferring the calculation to MPS's non-performing loans and any capital losses that would derive from them," says an operator.
SAIPEM LANDSLIDE: -66% IN 2016
Under fire in Piazza Affari Saipem, down by 5,2%. It is the worst blue chip since the beginning of 2016 with a loss of 66%. In addition to the new drop in oil prices, the fear that the banks, which had to purchase the unopted securities (ie not subscribed by the market during the capital increase), weigh the shares on the market while accepting sacrifices on the price weighs on the stock.
Eni closed unchanged despite the drop in crude oil and the downgrade by Moody's, which cut its rating to Baa1 from A3, with a stable outlook. Supporting the price was the news that Exxon Mobil is in talks to acquire an approximately 15% stake in the Area 4 oil field, in Mozambique controlled 50% by the six-legged dog. Little move Tenaris (-0,6%). Saras, on the other hand, rose (+1,22%) on the back of the increase in refining margins in the Mediterranean area.
In terms of companies involved in Oil & Gas infrastructures, the Trevi crash (-8,47%) should be noted. Kepler Cheuvreux downgraded the share rating to fresh from hold after the sharp drop recorded by the subsidiary Drillmec's portfolio and the recent stock rebound. Prysmian, on the other hand, rose (+1,87%), which created the Oil & Gas Business Area, entrusting its management to Cristiano Tortelli.
ENEL, THE PROMOTIONS ARE RAINING
Enel advances (+1,5%) on the eve of the EGP delisting. Bernstein's analysts confirmed the Outperform opinion on the stock with a target price of 5,1 euros. UBS has raised the target price on the stock to 5 euros from the previous 4,85 euros, confirming the Buy judgment. The adjustment to the targets comes following the communication of the results last week. The group ended 2015 with a group net profit of 2,196 billion, up by 324,8% compared to 2014. A2A (+0,9%) and Snam (+0,2%) also performed well.
POSTE ITALIANE PAYS THE RISK OF TREASURY SALES
Poste Italiane loses 1,7%. Among the reasons that pushed the share down, there are rumors according to which the Treasury could further reduce its share, currently equal to 64,7%. Last week, the group's chief executive, Francesco Caio, said he expected public holdings to decline to around 30% over time, adding that he was prepared for the Treasury to sell shares this year.
Landed on the stock exchange last October after a placement at 6,75 euros, Poste Italiane shares gradually fell on the stock exchange to a minimum of 5,17 euros on 9 February. From there, the stock recovered (+27% to date) thanks to the good results and the decision of the Board of Directors to distribute a higher than expected dividend.
In asset management, Anima fell (-1,8%), Azimut was positive (+1,5%).
BARCLAYS PROMOTES FCA, EXOR REDUCES DEBTS
In evidence among the industrialists Fiat Chrysler (+1,3%). Barclays believes that the share has substantial upside potential, setting the target price at 10 euros (rating overweight). Exor also rises (+1%, to 30,65 euros). The Agnelli holding company has sold 36% in the British real estate group Almacantar and other financial investments to Partner Re, the US reinsurer of which it recently acquired control. "Exor - explains a note - will use the entire proceeds from these transactions, equal to approximately 660 million in total, to reduce its debt".
