MONTI TO THE EU AFTER THE MOST DIFFICULT DAY
STOCK MARKET -4,7%, WALL STREET AND ASIA DOWN
Prime Minister Mario Monti's European mission (today in Brussels with Barroso and Van Rompuy, Thursday summit with Merkel-Sarkozy) could not have begun in a more dramatic setting, despite Barack Obama's telephone call of good wishes. The financial horizon has become even more complicated: the hotbeds of crisis in Italy and Spain have been joined by the threat of a forthcoming downgrading of the French triple A and the failure of negotiations for an agreement on the US federal deficit.
THE MARKETS. In this context, BTPs do not worsen but remain in a serious danger zone: the 6,62-year yield is unchanged at XNUMX% and the spread with the Bund widened to 475 points only due to the rush of money towards the Bunds, now down to a yield of 1,89% (-6 bp). Yesterday Spanish government bonds suffered: the yield on ten-year bonds rose to 6,48% (spread at 464). The gap between French and German 10-year bonds is 155 basis points. The crisis hit the European stock exchanges with violence, whose capitalization fell by 194 billion: in Milan, the FtseMib index fell by 4,7%. The London Stock Exchange lost 2,4%, Paris -3,2%, Frankfurt -3,3%. Deep decline also on Wall Street: Dow Jones -2,10, S&P -1,86 and also the Nasdaq in sharp decline - 1,92%. Tokyo -0,40% and Hong Kong's Hang Seng -0,98% also fell.
FORECAST. The announcement that the US rating will not be downgraded has improved moods on the Tokyo Stock Exchange, Standard & Poor's futures mark a timid rise (+0,3%). It is possible that the price lists, after yesterday's landslide, could find a precarious balance. But any prediction has to deal with general uncertainty. Negative indications on the Asian economy contributed to increasing investors' fears, with a drop in exports from Japan and a slowdown in growth in Singapore. All commodity prices are down, including oil, with WTI shedding 2% to $95,7 a barrel.
THE SOROS PLAN. The only way to avoid the implosion of the eurozone due to lack of liquidity, writes George Soros, is to give the ECB the possibility to act as a lender of last resort. To circumvent the statutory and regulatory constraints, the ECB could lend money, in unlimited quantities, through the EFSF, or the Fondo Salva Stati. “By acting together – explains the financier – the EFSF and the ECB could solve the liquidity problems of the banks with a modest commitment for the States”. Meanwhile, in a report with the eloquent title "The last days of the euro", UBS predicts a nightmare scenario: BTPs and Bonos at 9%, French OATs at 5%. The only antidote to so much poison is fiscal union. But quickly.
US CONGRESS ARGUES ABOUT EVERYTHING
BUT FOR NOW THE TRIPLE A IS SAFE
The manufacturing activity, taken over by the Chicago Fed, is better than expected. Meanwhile, the existing home market is showing signs of recovery: +1,4% in October. But these data do not limit the Wall Street landslide waiting for the open secret to be made official, namely the failure of the talks between Republicans and Democrats on the cuts to the federal budget. The parties are so distant, explains the Washington Post, that there was no agreement even on the communication of the outcome of the negotiations. The Democrats have called until the last moment for a joint press conference, the Republicans have refused to appear together with their rivals. Therefore the announcement was entrusted to a parliamentary note that only came out when the Stock Exchange was closed. However, the failure of the negotiations will not lead to a lowering of the triple A rating by Fitch and Moody's, the two agencies confirmed.
Given the circumstances, it is not surprising that operators have decided to lighten their positions at the start of a "short" week, due to the Thanksgiving Day holiday. Meanwhile, those who still have Btp or Oat in their portfolio lighten their positions. In fact, financial stocks continue to suffer: Bank of America -5% is at its lowest since March 11, 2009.
DEPOSITS AT THE FED DOUBLE TO 715 BILLION
BANKS AROUND THE WORLD ARE REFUGEING TO THE DOLLAR
The euro crisis has triggered the rush for the dollar, more than ever the planet's unchallenged reserve currency. Since the end of 2010, deposits with the Federal Reserve have increased from $350 billion to $715 billion. The downgrading of t-bonds by Standard & Poor's therefore had no effect. Indeed, since then the dollar has appreciated by 7,2% against the average of the main currencies. Ten months ago there were 22 banks with deposits of more than a billion dollars, today, despite yields of 0,25%, they have risen to 47. Conversely, the cost of financing the euro-to-dollar swap has risen to 139 points basis above the European interbank level.
UNDERSTANDING, BAZOLI BETS ON BRAGGIOTTI
GUZZETTI: “SHORT TIME DECISION”
Giuseppe Guzzetti reiterated that the choice of Corrado Passera's successor will take place "in a short time". But even today, probably, there won't be the expected white smoke. In fact, a meeting of the management board is scheduled but the supervisory board, chaired by Bazoli, who is responsible for the appointment, has not been convened. The professor acknowledged the growing consensus from some Foundations (Turin and Florence, in particular) on the name of Marco Morelli, current general manager of the Banca dei Territori, but he has an external candidacy of sure prestige and competence in store: Gerard Braggiotti, CEO of Banca Leonardo, one of the most active Italian bankers on the international scene.
BPM, BONOMI RELY ON EGON ZEHNDER
30 PIAZZA MEDA EXECUTIVE OFFICERS UNDER EXAMINATION
The first management board of Bpm after the capital increase formalized the mandate of the Egon Zehnder headhunting company for the evaluation and possible replacement of 30 managers of the Piazza Meda institute. It is the first decision of the Bonomi era, a first shock for the balance of the institution where until now prominent careers and appointments passed through the clearing house of the Friends. Now another delicate chapter opens: the replacement of the general manager Enzo Chiesa, who will precede the meeting of bondholders on 2 December which will have to change the terms of the convertible (from 6 to 2,71 euros, about ten times the current value of the bond ), one of the most embarrassing chapters of past management. Andrea Bonomi, strong in the axis with Mediobanca (which will now have to place 150 million unopted), intends to demonstrate to the Bank of Italy that the wind in Piazza Meda has really changed.
CARS, COMMODITIES AND BANKS
HERE ARE THE VICTIMS OF BLACK MONDAY
In Europe, the greatest losses concerned commodity stocks (Stoxx of the sector -5,9%), construction (-3,7%), the automotive industry (-4,8%) and banks ( -3,7%). In London, the two big miners Rio Tinto -5,8% and Bhp Billiton -4,8% led the declines, but Barclays bank also fell by 5,3%. Banks targeted in Paris (BnpParibas -4,3%) and in Frankfurt (Deutsche Bank -4,9%).
Piazza Affari was penalized by the detachment of the dividend of some companies: A2A , Atlantia (interim 2011), Enel (interim 2011), Mediobanca , Mediolanum (interim 2011), Recordati (interim 2011), Tenaris (interim 2011), Terna (interim 2011). Overall, the coupon detachment accounted for approximately 0,6% on the FtseMib index. Finmeccanica's decline stands out on the Milanese list, falling by 6,6%. During the week, the board of directors of the holding company will be held upon convocation by the president Per Francesco Guarguaglini. Yesterday there were rumors about the imminent resignation of Guarguaglini himself but the outcome of the board of directors of the subsidiary Selex offered different indications: the CEO Marina Grossi, wife of the president involved in the investigation into the Enav scandal, did not resign.
The decline of Eni -3,5% and of the other oil companies weighed on the Milanese list: Saipem -5,7%, Tenaris -4,1%. The banks were all negative: Unicredit -2,9%, Intesa -5,6%, Ubi -5,2%, Pop Emilia -7,5% fell. After a series of fluctuations, PopMilano also fell by 6,8%, MontePaschi -4,9%. Generali finished down 2,4%, a limited loss compared to the declines of Allianz -3,4% and Axa -5%. Telecom Italia lost 4,7%. Heavy reduction for Lottomatica -7,8%, Tod's -5,5% and StM -6,3%.
Fiat, on the day of termination of contracts with trade unions for all Italian employees (72 in all) to proceed with the stipulation of a car contract, it did not escape the general fall in car stocks and lost 6,8%.
