FROM IBM ACCOUNTS (-3%) INDICATIONS OF DEMAND CRISIS
CHINESE GDP IN BRAKING, PHILIPS AND AXA CUT POSI
IBM disappoints Wall Street expectations. The IT services giant's sales were slightly lower than forecasts: 26,2 billion dollars (+7,8%) in the third quarter against a forecast of 26,3 billion. On the contrary, profitability rose: 3,19 dollars per share against 2,82, but this was not enough to prevent a decline of more than 3 per cent of the stock in post-exchange trading: the slowdown of Ibm, despite the commitment to emerging markets and a focus on new and promising areas such as cloud computing is a sign of a deep downturn in the economy. In the meantime, new signs of an employment crisis are arriving from Europe: Philips cuts 4.500 jobs, Axa 1.500.
And finally, China's GDP is also slowing down: in September "only" 9,1% against a forecast of 9,3.
MERKEL FREEZES THE PRICE LISTS: THE AGREEMENT IS A DREAM
DEEP RED EVEN IN WALL STREET AND ASIA
A comprehensive agreement that solves all the problems of the debt crisis "is an impossible dream". Angela Merkel's declaration, reinforced by the outing of Finance Minister Wolfgang Schaueble (“the leaders of the eurozone will not reach an agreement on the 23rd”) froze all the stock markets. After three consecutive weeks of bullishness, the markets thus suffered a severe setback. The Milan Stock Exchange, positive in the morning, made a U-turn and closed down by 2,3%. London lost 0,7%, Paris fell 1,6%, Frankfurt -1,8%. The Handelsblatt newspaper publishes the prediction of the chief economist of Commerzbank: the triple A of France and Germany has its days numbered.
Same script on Wall Street where the decline was driven by the banking sector, down by 6,3%. The S&P 500 index lost 1,9%, the Dow Jones went worse -2,1%, while the Nasdaq lost 2%. Cyclical stocks such as Caterpillar and Alcoa fall -3% , Gannett (the publisher of USA Today) loses almost 9% due to the collapse of advertising in print media.
Among the banks Citigroup defends itself which, thanks above all to accounting benefits, achieves earnings of 1,23 dollars per share on revenues of 20,8 billion dollars against a forecast of earnings per share of 0,81 dollars on revenues equal to $19,2 billion. But CEO Vikram Pandit is under no illusions: "Citigroup continues to navigate a challenging economic scenario," he says in the bank's statement.
Things went worse for Wells Fargo which lost 6% on Wall Street after a quarterly below expectations. The fourth largest US bank closed the third quarter with a net profit of 73 cents per share, just below the 74 cents expected by the consensus of analysts thanks to lower write-downs on credits. “Macro conditions have turned out to be worse than expected,” said CEO John Stumpf.
Asia is also down: Nikkei -1,48%, similar losses for Shanghai and Seoul. Hong Kong Hang Seng crash - 4,3%.
THE BTP/BUND SPREAD WIDES TO 369
GREAT SUCCESS FOR THE TWO ENEL BONDS
The frost coming from Berlin immediately made itself felt on the government bond front. The BTP weakened drastically, with the yield rising to 5,78% while that of the Bund fell by 10 basis points to 2,09%. Result: the spread, which had dropped to 350 points in the morning, widened to 369 points.
Enel -2,3% has successfully placed bonds for 2,25 billion euros. The value of the 4-year tranche is equal to 1,25 billion, while the 7-year tranche is one billion euro. The issues were met with a boom in requests: over 5 billion orders for each of the two tranches.
The yield on the 4-year tranche was set at 290 basis points on the midswap, below the 300 basis points indicated at the start of the auction. For the October 24, 2018 maturity, the yield will be 350 basis points, lower than the 360 basis points marked at the first auction auction.
BUSINESS PLACE, RAIN OF SALES ON THE BANKS
GOLDMAN BOCCIA FINMECCANICA -4,8% WITH SELL
Sales to banks flocked to Milan starting with Unicredit, punished with a sharp - 6,1% despite Nomura confirming the buy recommendation and the target price of 1,30 euros. Intesa -5,3%, Banco Popolare -4,2%, Ubi -2,8%, Monte Paschi -3,2% is also bad. For once, the behavior of Bpm -4,8% is no exception. Massive casualties also for Fonsai-4%, limits General damage -1%.
Finmeccanica lost 4,8% after Goldman Sachs lowered the target price to 4,5 euros and repeated the sell judgment. Sharp decline also for automotive: Fiat -4,3%, Fiat Industrial -3,8% Pirelli -2,8%. Saipem +3,2% announced that it has been awarded two new offshore contracts, in Iraq and Nigeria, in the E&C (Engineering & Construction) sector for a value of 1,5 billion dollars. In Iraq, the group was awarded an Epic contract on behalf of South Oil Company for the expansion of a platform in the Persian Gulf, off the Al Faw peninsula, 550 kilometers southeast of Baghdad. In Nigeria, Saipem will develop the new offshore infrastructure in the Ofon field, located 50 km off the southern coast.
THUD OF DIASORIN (-10%) IN THE MARKET SQUARE
A CASH FLOW OF 600 MLO IN 2015
Diasorin -10%, after presenting the new 2012-2015 industrial plan this morning and after having revised downwards the estimates for the current year. For 2011, the diagnostics group expects turnover to be around 450 million euros (+11%), against a previous estimate of 465-475 million (+15%). The operating margin is estimated at around 200 million euros, against a previous forecast of over 200 million, "equal to a growth of approximately 20% compared to last year". The cash flow, in terms of accumulated value, will reach 600 million euros at the end of 2015, allowing the group to continue "to seek ways of growth through external lines".
