Finance these days seems to be going backwards: Piazza Affari, unlike the other European lists, applauds the prospect of "tapering" (ie the progressive reduction of ECB purchases). It seems crazy, given the importance of Quantitative Easing for the maintenance of Italian accounts. But the explanation lies in the breath of fresh air that the rate hike (still awaiting confirmation) could guarantee to banks and insurance companies, the most important sectors for Piazza Affari.
Confirmation comes from the increase in the European Stoxx index of Insurance companies (+1,2%) and Banks (+1,4%). But one wonders to what extent the news about the ECB's intentions is reliable: won't it be a trial balloon (or worse, a priest's joke) to evaluate the reactions of the market? Today the minutes of the last meeting were published, even if a first denial came from Mario Draghi's offices: we didn't talk about tapering.
Meanwhile, valuable advice arrives from the Monetary Fund (not only for Italy): "Debt - use with care", the title of the first chapter of the Fiscal Monitor half-yearly report. Globally, the debt of the non-financial sector (companies, households and governments) has reached 152 trillion dollars, equal to 225% of world GDP, an unprecedented peak. It is another sign that the abundance of money introduced by the various monetary expansion maneuvers is beginning to generate serious worries: "Financial recessions - said Vitor Gaspar, director of fiscal affairs of the Fund - are longer and deeper than normal recessions" .
ASIA OK, CREDIT AND OIL LEAD WALL STREET
Asian stock markets are all positive: Tokyo +0,6%, driven by a further decline in the yen (-0,2%). Hong Kong and Sydney +0,4%. Chinese stock exchanges still closed for holidays.
After days of decline, the US markets rebound, thanks to financial and oil stocks: the Dow Jones closes at +0,62%, S&P 500 +0,43%, Nasdaq +0,50%.
The macro data confirm (unlike what the IMF maintains) a growing situation: a) the ISM index on the expectations of purchasing managers of service companies rose to 57,1 from 51,4 in August; b) factory orders rose by 0,2% in August, from +1,4% in July; c) orders are also growing (+0,1%), while the consensus expected a zero change; d) only the September figure on the trend of employment in the private sector (Adp data) was slightly below expectations: 154 thousand new jobs created, down from 175 thousand in the previous month and below forecasts by +165 thousand places.
EVANS (FED): RATES UP MAYBE ALREADY IN NOVEMBER
On the markets there is a growing belief that the Fed will raise rates by the end of the year, a hypothesis relaunched yesterday by Charles Evans, president of the Chicago Fed who, speaking in Auckland in New Zealand, declared that he was in favor of a rate hike by the end of the year if the data macroeconomics continued to give positive indications. Evans also added that he doesn't rule out an anticipated rate hike in November.
The probable increase in the value of money helps the banks: Goldman Sachs +2,6%, Citigroup +1,8%, Bank of America +2%. Twitter takes off (+5,7%): the auction for "the little bird" will close this week. Advance also Yahoo! (+1,23%), submerged by criticism for the privacy violation scandal.
Espionage problems also for Booz Allen Hamilton (-3,8%). An NSA (US security agency) technician formerly employed by the company was arrested for stealing confidential information. Edward Snowden has worked for the company in the past.
STOCKS DOWN, OIL UP. RAIN OF BUY FOR ENI
US oil stocks fell for the fifth consecutive week. Brent rose by 2%, to 51,8 dollars a barrel, while Wti rose by 2,2% to 49,8 dollars. Exxon climbs 0,96%, Chevron +0,87%.
In Piazza Affari Eni +2,3%: Deutsche Bank has raised its judgment to Buy from Hold, with the target price at 15,25 euros. Rain of acclaim after the agreement with BP for the sale of liquefied natural gas (LNG) from the South Coral field over the next 20 years. According to Equita (buy and target price at 15,5 euros) the agreement could allow Eni "to create value and reduce the investment load after the recent exploration successes without changing short-term operating cash generation". Mediobanca Secuities is in line, as it has calculated that 25% of the stake could generate income of around 2 billion euro. Saipem +1,5%, Tenaris +0,9%.
LIKE THE TANGO BOND AGAIN. TEQUILA IN THE STOCK EXCHANGE ONLY AFTER THE US VOTE
Yesterday Argentina successfully placed its first two bonds in euros: a 5-year, amounting to 1,25 billion, at a rate of 3,875%, and a ten-year at 5%. In both cases, thanks to the request, the rates were lower than the initial offer.
The novelty arriving from Mexico has a completely different tenor: José Cuervo, the parent company of the most widespread and famous tequila, has postponed the IPO, from which it expects to raise between 500 million and one billion dollars, already scheduled for November. The company has decided to wait for the outcome of the US elections. The prospectus points out that the vote (see the success of Donald Trump) could have major consequences on trade between Mexico and the USA.
ONLY MILAN RISES IN EUROPE (+1,03%)
Milan, for once, was the queen of Europe. Piazza Affari, which rose to 16.477 points, up 1,03%, was the only Stock Exchange in the Old Continent in positive territory. With the exception of a timid awakening at the end in Madrid (+0,14%), the major European lists reported losses: Paris by 0,25%, Frankfurt by 0,30% and London by 0,57%.
At the sector level, banks and policies are advancing in the perspective of a rate hike. The European Stoxx index of Insurances rose by 1,2%, Banks +1,4%. The biggest drops concern the sectors in which companies are traditionally more indebted: Real Estate -2,7%, Utilities -2,1%, Tlc -1,5%.
THE BUND GOES BACK TO ZERO. BTP 50 RETURNS 2,94%
The rumors about the alleged progressive reduction of the ECB's purchase program ahead of the scheduled deadline have left their mark. The BTPs closed down: the yield on the ten-year Italian reference jumped up to 1,38%, the highest since last June 27, from 1,26% of yesterday's closing levels. The yield on the 0-year Bund rose to 0,9% from -XNUMX%.
Good start for the 50-year bond, which closed the opening session with a yield of 2,94% (against 2,85% for the placement). 45% of the stock was purchased by investment funds, 23% by banks, 14,5% by hedge funds and 13% by insurance companies and pension funds.
BANKS IN FLIGHT, BUT MPS DOESN'T PARTICIPATE IN THE PARTY
It was financial day. The Italian banking index finished with a jump of 3,6% and the European one of 1,5%. The big names did very well: in Milan Unicredit +4%, Intesa +3,3%. In Frankfurt Deutsche Bank gained 2,7%. BnpParibas and SocGen also rose, both +3,2% in Paris.
Monte Paschi did not participate in the party which, after updating the historic low to 0,1726 euros, closed at -3,93%, stopping at 0,1737 euros. Consob extended the ban on short selling to January 2017.
In great dust Ubi (+ 5,7%) and Pop. Emily (+5%). Yesterday the purchase of 46,98% of Cassa di Risparmio di Saluzzo from the local foundation was completed: the share of Bper, already present in the area with Cassa di Bra, rises to 80%.
In view of the meeting on October 15, attention is growing for Pop. Milan (+5,1%) and Banco Popolare (+3,45%). The chairman of the management board of the popular bank in Piazza Meda, Mario Anolli, on the sidelines of a hearing in the Finance Committee of the Chamber, on relations between customers and credit institutions, reiterated that with the operation s will create the third group Italian bank, with about four million customers, capable of generating an almost doubled profit. The banker then went so far as to declare that in the appointment of Umberto Ambrosoli to the post-merger presidency of Bpm spa "politics has nothing to do with it, there has been no external intervention".
Record day also for the European insurance sector. In Milan Generali +4,1%, UnipolSai +3,1%, Unipol +3,5%, Cattolica Assicurazioni +2,5%. In Frankfurt Allianz gained 1,5%, in Paris Axa +3,5%.
TERNA (-2,9%) PREPARES FOR LANDING IN GREECE
The prospect of a rate hike depressed the utility sector. Slow down Snam (-2,4%), which yesterday kicked off, together with FCA and Iveco, a a program for the expansion of car gas stations (200 million). Down Terna (-2,9%), which, in combination with F2i, is preparing a joint offer to acquire a minority stake in Admie, the Greek operator for the management of the electricity grid. The binding offers are expected on October 12. The company yesterday placed a 12 million euro 750-year bond. Also down were Enel (-1,64%), Iren (2,33%) and Acea (-1,45%).
UBS PROMOTES EXOR, NOW BREMBO AMONG THE BIG
Exor +0,8%: UBS has raised its target price to 35 euros from 32 euros, confirming the Neutral rating. Fiat Chrysler +1,7%. Rises also for Leonardo (+1,26%), driven by expectations towards a possible new order in Canada and a potential reopening of the tender for the supply of 50 helicopters to the Polish army. Slightly down Telecom (-0,27%): Rbc confirmed the outperform recommendation and the target price of 1,1 euro.
This morning Brembo (yesterday -2,75% after the recent highs) entered the Ftse Mib index to replace Italcementi, which will be delisted on 12 October.
CAIRO: “A NEW WEEKLY FOR RCS. WE ARE NOT INTERESTED IN THE SUN"
RCS Mediagroup +0,27%. President Urbano Cairo announced that the company could launch a new weekly, perhaps as early as January, and when asked he replied that "relations with Diego Della Valle are good". On the other hand, there is no interest in taking over Il Sole 24 Ore. In the evening, the meeting of editors of the newspaper voted no confidence in the director with 151 votes against 45 against. Instead, the board of directors renewed its trust in Roberto Napoletano in view of the meeting on 14 October.
Esprinet rally (+18,87%) after the presentation of the 2016-2018 strategic plan which foresees strong growth in fundamentals. Juventus (+0,71%) today enters the Ftse Italia Mid Cap index. The Star Conference begins in London today and will end on 7 October.
