the decline of the eurozone economy is "unprecedented", but today's response from the ECB does not seem proportionate to the cry of alarm launched by the Eurotower itself, at least for the markets. The European lists close the last session of April in the red, under a pouring rain of negative macroeconomic data and with Wall Street down. Investors are preferring to cash out at the end of a month of strong recovery, which recorded the biggest jump in 10 years since the collapse in March, with the pandemic loosening its grip, but not letting go and still reaping thousands of victims around the world.
Piazza Affari loses 2,09% and drops to 17.690 points, weighed down by the banking sector, which is down throughout Europe. The flight from stocks overwhelms Frankfurt -2,25%; Paris -2,12%; Madrid, -1,91%. The worst is London, -3,43%, where Royal Dutch Shell loses 11% following the quarterly results and the cut of the dividend to 16 cents per share (-66%) for the first time since the Second World War. Due to the collapse in demand for crude oil and the price of oil, the oil giant recorded a net loss of 24 million dollars (22,1 million euros) compared to a net profit of 6 billion dollars a year year before.
Investor sentiment was weighed today by dismal macroeconomic data and ECB forecasts. Christine Lagarde estimates a 15% drop in GDP in the second quarter of the eurozone and a loss of between 5% and 12% for the full year. Faced with such an apocalyptic scenario, Frankfurt's response did not appear decisive enough. In fact, no substantial interventions to support the economy arrived from the Governing Council, despite the market expecting new measures, starting with a strengthening of the securities purchase programme launched in March. Eurotower has not moved on this front, announcing only new extraordinary liquidity auctions to support the banks.
On the other hand, the black swan also dominates the star-striped economy: after yesterday's bad data on GDP in the first quarter (-4,8%), today there is confirmation of the growth in unemployment. In the past six weeks, Americans filing for benefits have risen to 30,2 million; last week requests were 3,84 million after 4,42 million the previous week and 5,24 million the previous week. For Italy, Istat certifies a drop in GDP in the first quarter of 4,7%.
The spread between Italian and German ten-year bonds is paying the price, rising to 235 basis points (+4,22%), even if the BTP yield is stable at 1,76%. The euro-dollar is in favor of the single currency, around 1,09. Gold is flat at $1710 an ounce, while oil is back on track after last week's historic crash. Brent appreciates by 13,6%, to 25,61 dollars a barrel; Texan crude rose 17,9% to 16,6% dollars a barrel.
In Piazza Affari the most affected sector is the financial one: Unicredit -4,7%:; Bper -4,33%; Understanding -3,88%; Banco Bpm -3,68%; Mediobanca -4,13%. Among other things, S&P assigned a "negative" outlook to most Italian banks due to the growing risks associated with the Covid 19 emergency. The agency yesterday published an update note on the sector underlining the greater vulnerability of Italian banks compared to European ones for various reasons: a) exposure to SMEs; b) lower capital ratios; c) the high cost / revenue ratio. This could create greater incentives for implementing structural changes in the sector, including further consolidation. But fiscal and monetary measures to mitigate the shock will be decisive.
In black knit Stm -5,01%. Male Cnh -4,83%; Banca Mediolanum -4,46%; Diasorin, -4,25%. The diagnostic company has not been chosen nationally for serological tests for the search for IgG antibodies to the Sars Cov-2 virus. The stock reached an all-time high of €171,5 on 23 April, dropping about 10% from that peak at current values. Only seven positive titles on the main list. Italgas on the podium +4,83%; Hera +1,26%; A2a +0,69%.
