“Federal Reserve leaders are considering whether to announce the new rate strategy before or after the December meeting”. The signal that appeared in the columns of the Wall Street Journal had the effect of curbing the rush of sales triggered by detention of the vice president of Huawei, the news that yesterday turned stock markets around the world upside down. With a formidable boost, the S&P 500 index recovered almost all of its initial losses, going from -2,9% to +0,15%. Even more formidable was the exploit of the Nasdaq which closed at +0,42% thanks to the push from Amazon and Netflix.
TRUMP: I HAVE NOTHING TO DO WITH MISS HUAWEI'S ARREST
The recovery owes much, of course, to the peace signals arriving from Washington. Donald Trump assured Beijing that he was unaware of the intention to arrest Sabrina Meng, the daughter of the president of the telecommunications giant. Even China tends to reduce the clash in the very delicate area of cyber espionage. Yesterday's news that Huawei has agreed to meet with the intelligence leaders of the United Kingdom to develop a system of guarantees.
However, the very rapid crisis has allowed the markets to become aware in advance of the welcome turnaround by the US central bank: after the probable last rate adjustment of 19-20 December, the Fed's tightening will go into hibernation, thus averting the risk of recession signaled by the flattening of the yield curve.
EXCHANGES RECOVER, GOLD BRAKES, BITCOIN COLLAPSES
And so, surprisingly, the markets are heading towards a more relaxed weekend.
Tensions on Asian price lists are decreasing. Stock Exchanges in Asia are up, in the wake of Wall Street. Tokyo's Nikkei gains 0,6%, Hong Kong's Hang Seng 0,3%, Taipei's Taiex 0,7%. The Shanghai Stock Exchange is flat.
Almost all the currencies of the Asia Pacific area strengthened against the dollar, as did the Indian rupee, the Korean won and the Chinese renmimbi, while the Japanese yen depreciated. BoJ governor Kuroda reiterated that the expansionary policy will continue for quite some time.
The change of course of the US markets was spectacular: the Bear, who was dominating in the middle of the session (Dow Jones index down by 785 points) was driven back by a prodigious charge from the Bull, which limited the decline to only 79 points. Closing: Dow Jones -0,32%, S&P 500 -0,15%. The Nasdaq closed up 0,42%.
The rush of gold, the safe-haven asset par excellence, is slowing down from 1243 dollars an ounce (a five-month record) to 1238.
The yield on ten-year t Bonds, which slipped to a minimum of 2,8260, recovered to 2,89%, but rates remain at their lowest for six months in Germany, for twelve months in Canada, even for 16 in Australia.
Bitcoin plunges to a new low $3.444, down 20% in the past week.
NO AGREEMENT, OIL BELOW 60 DOLLARS
Oil drops below $60 this morning. Brent trades at 59,59 dollars, US Wti at 51,18 dollars. Yesterday the OPEC assembly closed without an agreement between the member countries, the press conference at the end of the session was cancelled. But the negotiations continue today waiting for Russia to clarify its intentions. Saudi Energy Minister Khalid Al-Falih said yesterday morning on the sidelines of the OPEC meeting in Vienna: "Any production cut by OPEC will not be excessive." In the evening, however, Al Falih himself said he was "not confident" that an agreement will be reached today on a possible cut in oil production to support crude oil prices
EXPECTED A REBOUND IN EUROPE
Huawei, but not only. In addition to the crisis on duties and the tension on crude oil, European lists paid yesterday for the turbulence of a high-risk geopolitical situation for the Old Continent which involves Italy, grappling with the manoeuvre, the increasingly problematic path of Brexit ( there are defections in Parliament on both fronts) and the fuse ignited by the revolt of the Gilets jaunes, an expression of that profound France which periodically rises up against "les riches". The result was a session in deep red for the stock lists, in the face of the flight from risk. It is probable that already at the opening the lists will follow the rebound of the lists of China and the USA.
IN MILAN, THE BLACK JERSEY IS AGAIN
Milan paid the highest price (-3,54%), which closed the session with the worst performance in the Old Continent's price lists.
Frankfurt follows by a whisker, ending the session at -3,48. Paris -3,3% (at March 2017 levels) is preparing for the fourth consecutive Saturday of urban warfare: Champs Elysées closed, 65 policemen in war gear. Madrid loses 2,4%, London 3,1%.
The Eurostoxx 600 index lost 3,3%, posting its worst session since Brexit.
Bond yields also down in Europe, along the lines of the US market. The 0,23-year German Bund fell to 2011%, the lowest since April XNUMX.
MANEUVER STILL IN THE BALANCE, BTP AT 3,17%
But there is an exception on the global scene: the yield on the ten-year BTP rises by 13 basis points to 3,17% from 3,04% on the previous day. The spread was also widening, closing at 300, 296 basis points to be exact, 18 points more than yesterday.
The prospect of an agreement with Brussels is once again receding. Prime Minister Conte would find strong resistance from the Lega and M5s in reducing the objective of the maneuver to 2% of the deficit/GDP. The 5 Star Movement, according to Reuters, would have changed its mind and would be willing to concede very little, a lowering of the GDP deficit ratio of 2,1%, but not below. The maneuver now expects to reach 2,4%, while the European Commission, informally, has made it known that Italy must fall below 2%.
ALL FTSE MIB INDEX STOCKS IN RED
In Piazza Affari, no Ftse Mib stock closed on positive ground. Industry stocks closed sharply lower, starting with technology: Stm -5,99%, Prysmian -4,36%. All automotive stocks suffer, in line with the sector (Daimler -7% in Frankfurt): Fiat Chrysler -5,1%, Pirelli -3,25%.
FINECO'S COLLECTION HAS BEEN RELEASED
The banks were also in the red, pushed down by the recovery of the spread. A note from Moody's confirms the negative outlook on the Italian banking system due to rising funding costs and potential fiscal tightening, "factors that offset the positive impact of the expected further reductions in problem loans". Accusing losses between 5 and 6% Intesa, Unicredit, Ubi and Banco Bpm. It closes at the bottom of the main Finecobank basket (-6,5%), which halved its net inflows in November 2018 compared to the same month in 2017.
