Silence: the numbers speak. The long-awaited US inflation data is out today. The forecast of the experts is that it will be a record figure: +6,8%, against 6,2% in October, the highest for 31 years. If this were the case, the repeatedly announced start of the reduction in Treasury purchases (the tapering) would be taken for granted: 30 billion dollars less every week in order to cancel the intervention by March. An orderly retreat that comes after yet another week of records: the MSCI World super index gained around 2,7% between November XNUMX and December XNUMX. In this setting, the markets open flat, resigned to taking profits but still full after the last coups (see Unicredit) of the great Bull season. Not even Evergrande's "Lehman moment" causes great confusion.
CHIP CRISIS, TOYOTA CLOSES TWO FACTORIES
In Asia this morning the decline is widespread, but not very significant. Tokyo Nikkei -0,3%. Hong Kong Hang Seng -0,5%. CSI 300 of the Shanghai and Shenzen price lists -0,6%. Seoul's Kospi -0,7%, Mumbai's BSE Sensex -0,4%.
New chip problems: Toyota announced the closure of two plants for the whole month. In Hong Kong, Evergrande is down 2% after Fitch broke the delay and declared that the company is in default: but tonight the stock opened down 4%. Behind the ascent are some positions taken by important Chinese institutions on the subject. Kaisa, another major real estate developer in dire financial straits, is negotiating with a group of creditors headed by Lazard.
YUAN RISES STILL, US FUTURES UNCHANGED
China's yuan is still appreciating, despite the new intervention by the People's Bank of China: the central bank has set the currency fluctuation band far below consensus expectations, a measure that comes after the request to banks to increase the currency reserve foreign. The dollar-yuan cross was down 0,2% to 6,36.
Wall Street futures are unchanged. The S&P500 closed down 0,7% yesterday. Nasdaq -1,7%, Dow Jones almost flat (-0,06%).
Yesterday's job market data shows that Americans are getting back to work. Initial New Jobless Claims are better than expected, falling to 184.000; analysts estimated 215.000.
THE TEN-YEAR TREASURY BELOW 1,50%
Awaiting today's inflation data, the 1,49-year Treasury Note is barely moved at 30%. The reopening of the auction on XNUMX-year bonds had a disappointing outcome yesterday, with indirect demand, that coming from foreign investors, lower than the average of the last twelve months.
MACRON PROPOSES THE "EUROPEAN CHAMPIONS"
European futures are also not moving ahead of the debut of German Chancellor Scholz. Yesterday Emmanuel Macron, illustrating the objectives of the next EU semester under the leadership of Paris, returned to the office on the "European champions": at the March summit Macron will propose to build "industrial chains" for batteries, semiconductors, hydrogen, cloud, defence, health and culture. The French President also intends to discuss "adapted budgetary and financial rules that allow prioritizing the investments needed" for the new European economic model and the climate and digital transitions.
EUROPE TOWARDS CUTTING AID IN MARCH
What made the difference on European price lists was the "U effect" like Unicredit, driven by market consensus for the plan presented by CEO Mario Orcel. The Bank's performance (+10,82% at 12,80 euro) allowed Piazza Affari to close in positive territory, in contrast with the rest of the financial markets, already tuned in to the key event of the week: the figure on the American inflation.
Noting that the new strain of the virus can be effectively fought with a third dose of vaccine, the Covid 19 issue has given way to the number one threat, that of the cost of living. This afternoon's data could decree the progress of the next sessions, perhaps even of what remains of 2021. Pending the decisions of the Fed, the debate after Pepp is gaining speed in Europe.
BUT A DEROGATION IS ALREADY IN THE CONSTRUCTION
According to Reuters, a compromise is maturing for a "limited and temporary" increase in purchases. In practice, six different sources would have declared that the decision will still be taken in December (and Omicron does not change things) and that the consensus is moving towards increasing the already existing program (APP) either with a new amount, or with an increase of the size of the purchases, however for amounts lower than the PEPP. But a form of "geographical flexibility" will be extended to the APP to avoid the risk of market fragmentation.
THE SPREAD RISES AGAIN. TODAY THE AUCTION BOT
Thus the flow of sales on Italian 5 and 10-year bonds subsides. The ten-year rate closes at around 1,03% and then settles at 1%. The spread on the Bund rises to 134 points from 133 on the eve. Today the Treasury will place 6 billion euros in 12-month Treasuries. Yesterday the Mef assigned 2,255 billion in the CCTEU 2029 against a maximum amount of 2,5 billion, and at the same time withdrew a total of 2,25 billion from circulation.
THE AUCTION FOR THE NEW THREE-YEAR CLOSES THE TREASURY YEAR
The ministry also announced that the new 14-year BTP will be auctioned on 3 December. The Treasury specifies that, in consideration of the large availability of cash and the reduced financing requirements, the auctions of the other medium and long-term securities scheduled for the same day will not take place.
BAGS IN RED, UNICREDIT SAVES MILAN (+0,24%)
Unique among the major Stock Exchanges, Milan closed in positive territory (+0,24%), however still below 27 points (26.187 points). The other lists are in red: the worst Stock Exchange is Madrid (-0,9%), closely followed by Amsterdam (-0,7%). London loses 0,2%. Sales in Frankfurt (-0,3%) and Paris (-0,14%) were more contained.
VOLKSWAGEN LAUNCHES 89 BILLION IN INVESTMENTS
Volkswagen (-1%) will invest 89 billion euros over the next 5 years on new technologies such as electric mobility and digitalisation. This was announced by the automotive group at a press conference. German exports grew at the strongest pace in more than a year in October despite persistent supply bottlenecks from the manufacturing sector. This is what emerges from the data published by the Federal Statistical Office. Seasonally adjusted exports rose 4,1% month on month following declines in August and September. Imports also saw an unexpected jump, growing by 5%, after a slightly revised increase of 0,4% the previous month.
VIVENDI PREPARES THE TAKEOVER OFFER FOR LAGARDERE IN JANUARY
Lagardére flies to Paris (+4,94%) in anticipation of the takeover bid that Vivendi (+0,36%) is preparing to launch in January at 24,10 euros per share, after yesterday taking over Amber Capital's stake in the group transalpine medium.
ORCEL SPEAKS, IN ONE HOUR THE STOCK EARNS 3,3 BILLION
The star of the Piazza Affari session was Unicredit: +10,82%, equal to 3,3 billion more capitalization, as much as the stock earned after the 60-minute presentation by Andrea Orcel. The Unicredit unlocked plan has been applauded by everyone: brokers, analysts and unions, who have been very critical of the work of Mustier management for years. “For the first time – commented the leader of Fabi Lando Sileoni – there is a real plan to relaunch the growth of the group”.
BY 2024 16 BILLION FOR SHAREHOLDERS
The market liked the profitability and capital redistribution targets better, at the highest in Europe: at least 16 billion in total for the period 2021-2024, with an annual distribution "in line with the organic generation of capital for each respective year of reference ”. A distribution of €2022 billion is expected for 3,7, consisting of a cash dividend equal to 30% of the underlying net income and share buybacks for the remainder.
PARIBAS: SANTA CLAUS HAS ARRIVED IN PIAZZA GAE AULENTI
For Goldman Sachs, the important news is that management has undertaken to "repay essentially all the capital generated organically, equal to 16 billion euros, or 62% of the market capitalization over the horizon of the plan".
Exane Paribas wonders if Santa Claus has arrived at Unicredit. But we must not forget that there is much more to the plan - they add - the target of a profitability (Rote) of 10% compares with a consensus of 6%, which implies concrete improvements on the profit front ", which will derive from an expected Cet 1 ratio of 12,5-13% at the end of the plan.
For Citi, the group has increased its return on capital well above market expectations (at least 16 billion euros, equal to 60% of capitalization). Similar views from Jefferies and Kepler. According to Deutsche Bank, the shareholder policy will support the action. A critical note comes from Kbw (underperform at 11,80): the bank's policy is extremely aggressive in the face of "minimum integration costs".
OTHER BANKS WEAK, GENERALI GROWS IN INDIA
Among the other banks, Bper rose by 0,7%. Banco Bpm and Intesa San Paolo slow down. Generali (+0,6%) in talks to increase its stake in two Indian insurance companies, as its debt-ridden local partner Future Group wants to exit the alliance. The board of directors approved some changes to the procedures for presenting the list for the renewal of the board by the outgoing board, in line with the indications of Consob.
Diasorin recovers (+1,7%) ahead of the Investor Day.
IN RED STELLANTIS AND OILS. ENI COLLAPSES
Stellantis -1,4% despite the positive comments of Kepler Cheuvreux. In fact, analysts raised the target price on the stock from 25 to 27 euros, confirming the buy recommendation.
The oil sector loses momentum: Eni -1%, Saipem -2,17%, Tenaris -2%.
Landslide Telecom Italia (-3,5%) waiting for the Board of Directors on the 17th to clarify Gubitosi's fate. A new downward revision of the guidance is likely due to the weak results of the Dazn operation.
JUVENTUS -5,1%, ACCELERATE THE ESCAPE FROM RIGHTS
Juventus is doing even worse (-5,11%) two days after the expiry of the discussion of the rights to the capital increase, which fell by 35%.
SVAS, NEW RECORD DEBUT AT EGM
Another record debut at Euronext Growth Milano: Svas Biosana, leader in the production and distribution of medical devices for healthcare facilities, rose by 14%.
