The markets are approaching, with hopes and fears, the direct confrontation between Donald Trump and Chinese President Xi Jinping scheduled for Friday evening in Buenos Aires.
Yesterday the stock markets trembled in the face of the prospect of a failure of the meeting ventilated by Trump, except to regain altitude last night after the words of Larry Kudlow, the President's economic adviser: "There is a good chance" of reaching an agreement, he said , “even if for now we have no signs of availability on their part. But I have good hopes." No reply from the Chinese side, but an eloquent message arrives from Beijing: the party newspaper has announced that Jack Ma, CEO of Alibaba, the symbolic company of China most closely linked to the US model, is among the members of the CCP. A good way to signal the unity of the Dragon in the face of the US offensive.
CHINA ADVANCES, NASDAQ FLAT
The Asian Stock Exchanges are positive. The Shanghai and Shenzhen CSI 300 index gains 1,3%, Hong Kong's Hang Seng 1%, Taipei's Taiex 1%. The Stock Exchanges of South Korea (+0,3%) and India (+0,3%) rose less.
Contrasted US markets. The Nasdaq moved little (+0,01%). Better in the final, thanks to the words of Kudlow, both the Dow Jones (+0,44%) and the S&P 500 (+0,33%).
In an interview with the Washington Post (the newspaper most hostile to him), Trump launched a missile against General Motors, -2,5% in the stock market after the president's threat to cancel the planned contributions for the electric car after the announcement of 14 job cuts in US factories.
TRUMP ATTACKS FED AND PUNISHES GM
On the occasion, the president launched new heavy criticisms of the Fed. "It's their fault - he declared - that GM took such a decision: I'm not at all satisfied with Powell". Tonight the Fed governor will speak in New York at the meeting of the society of economists. Yesterday, in that session, his deputy Richard Clarida (the true mastermind of the bank, according to observers) defended the line of gradualness in terms of rate hikes. St. Louis Fed Governor James Ballard has warned that in the next two years, the central bank could be called upon to face the danger of an economic crash. In line with these latest indications is JP Morgan, which expects a progressive weakening of the dollar during 2019.
MICROSOFT SURPASSES APPLE, CHINESE TECH SHINES
Noteworthy is the different relationship with the politics of the big technology companies in the USA and in China. Apple paid yesterday for Trump's threats on duties with a sharp decrease (-1,6%): the company, which produces in China, will be affected by the administration's measures. The stock (-20% in the last month) has thus lost the scepter of number one company by stock market value, overtaken by Microsoft.
Conversely, Alibaba, the only tech stock rising on Wall Street, climbed 9,5% for the month. Tencent, yesterday + 3%, gains 21% since October.
TENARIS -10% IN ARGENTINA UNDER THE JUDGES' LENS
Oil rebounds, Brent +1,3%, to 61 dollars a barrel (yesterday -0,4%). The American Petroleum Institute, behind which is the lobby of US oil companies, signals a good recovery in demand in the last week.
Yesterday Saipem -1,12% after the leap on the eve, even if Exane Bnp Paribas raised the rating to "outperform" from "neutral". Eni loses 0,71%.
The negative note comes from Buenos Aires. Tenaris, a company controlled by the Italian-Argentine Rocca family, yesterday evening lost almost 10% on the Argentine stock exchange. The judges who are investigating a widespread case of corruption involving senior officials of the previous government have also opened an investigation into President Paolo Rocca.
This morning the euro-dollar cross was little moved, 1,130, roughly on the lows of the last three weeks.
COUNT: SOCIAL STABILITY BEFORE THE BUDGET
Not just Trump. The positions of the Italian government and those of the EU Commission remain very distant, to the detriment of Monday's premature enthusiasm. A note from Palazzo Chigi reiterated that the maneuver "is not a question of decimals: the Government's objective is to relaunch growth and development". “Social stability – Prime Minister Giuseppe Conte said in an interview with Corriere della Sera – is worth more than budgets”.
DOMBROVSKIS: CORRECTIONS MUST BE CONSISTENT
“I am not discussing this or that figure – was the remote reply of Commissioner Pierre Moscovici – it is not a question of looking for an average but of respecting the rules, they can be respected flexibly but they must be respected”. And Valdis Dombrovskis, speaking with La Stampa, is explicit: the corrections to the maneuver "must be consistent".
In the meantime, the wheel of the European procedure for excessive debt does not stop. The EU heads of state and government will support on Thursday the proposal of the European Commission, which asks for action to be taken against Italy on a disciplinary level for non-compliance with the debt criterion. But the timing for the formal start of the procedure could be postponed to February.
MILAN SLOWS DOWN, SPREAD TO 293, OFFERED 5,5 BILLION FOR A LONG TIME
Milan -0,43% after a swinging morning, took the downward path closing at 9.150 points. Volumes came close to 2 billion euro.
The other lists are also negative: Frankfurt -0,4%, Paris -0,24%, London -0,29% and Madrid -0,08%.
On the secondary side, the spread between Italian and German ten-year bonds rose to 293 but below 300 for the entire session. The auctions in the morning went quite well and the Treasury placed 2,5 billion of 2-year bonds with declining yields, even if for the 5-year indexed BTP the yield was higher than in June. The Bot Auction is scheduled for today.
Yesterday evening with the market closed, the Ministry of the Economy announced that on Thursday it will offer BTPs at 5 and 10 years and two CCTEUs for a minimum of 4 and a maximum of 5,5 billion, a "light" amount according to experts.
BANCA GENERALI SUPERSTAR
The march of bankers has been thwarted after the leap forward on the eve. The exception is Banca Generali (+3,77%): the market's attention is growing for the Investor Day on the agenda for Monday. Bper also rebounds (+3,51%). The big names are weak: Intesa -0,1%, Unicredit -0,23%. Ubi -0,3%. The target price cut by Morgan Stanley weighs on these stocks.
DUTIES STOP LUXURY. NAIL FERRARI
The tension on duties rises, the luxury sector loses its blows: Moncler -2,93%, Ferrari -3,72%. Luxottica also fell: -1,22% on the eve of the closure of the public offer and in view of tomorrow's meeting of Essilor Luxottica.
Tim rises instead (+0,7%). During the night, the Senate Finance Commission approved the two amendments by M5s and Lega which encourage the aggregation between telephone networks. Among other things, the amendments encourage the birth of the newco with an incentive tariff system on the Rab model of Terna and Snam. The tax decree goes to the courtroom today.
Mediaset +1,5% after the first victory in the lawsuit against Vivendi's appeal on the admission to the shareholders' meeting of the shares acquired during the takeover.
FALCK RENEWABLES GIVES A SHOCK
Falck Renewables performed well (+2,92%) which completed the acquisition of 49% of Energia Eolica de Castilla. Over the past 12 months, the stock is up 56%.
Cellularline (+2,55%) signed a distribution agreement with Samsung in Aim.
