Red alert. The forecasts of Meteo Borsa do not leave too much hope. The Asian Stock Exchanges travel negative: Tokyo -2%, Hong Kong -1,3%. Sidney (-1,8%) and the Chinese Stock Exchanges were also bad. Safe-haven assets are up, from gold to the yen. And futures on European markets promise a negative start. The reason? Elections are scary.
Happens on Wall Street, troubled by the Donald Trump comeback, but also in Piazza Affari, grappling with the possible victory of the No vote in the referendum of 4 December. US polls agree in detecting Hillary Clinton's difficulties after the reopening of the emailgate investigation: according to Abc/Washington Post, Trump is even ahead. Even the Financial Times, which guaranteed the endorsement to the Democratic candidate, reports the risk of overtaking.
The US stock market, which took Clinton's victory for granted (a lead of twelve points a week ago), fears the twist: yesterday the S&P 500 index -0,68% slipped to its lowest since last July 7, after down for six consecutive days as it has not happened since August 2015. The Dow Jones (-0,58%) and the Nasdaq (-0,69%) are also down. The fear is that on the evening of 8 November, with closed polling stations, what happened after the affirmation of Brexit will be repeated.
SENTIX: ITALY RISKS MORE THAN GREECE EXIT FROM THE EU
Meanwhile, analysts are evaluating the possibility of Matteo Renzi's defeat on 4 December more and more seriously. Correspondingly, Italian debt yields hit new highs yesterday. The spread of the BTP with the Bund, which yields 0,20%, has risen to 151 basis points. The differential between the 46-year bond and the Spanish Bono widened to 4 basis points, the maximum in the last 1,7 years. Negative record also for the yield on Italian 1,76-year bonds, which leapt past the 2015% threshold, closing at XNUMX%, on levels not seen even for a year, November XNUMX.
A look at the survey by Sentix, an authoritative German research center, is enough to give an idea of the concerns of operators: for the first time, Italy has overtaken Greece as the country most likely to leave the euro zone, according to a survey at investors, even if the hypothesis for the next 12 months does not go beyond 9,9% (against 8,5% in Athens).
DOWN THE DOLLAR, PFIZER BRAKES ON WALL STREET
The double electoral unknown influences the mood of the markets, today awaiting the Fed's statement at the end of the meeting of the monetary committee. The dollar loses ground (1,1069 against the euro, just above 103 the yen exchange rate) on the presumption that Trump, in favor of protectionism, prefers a weak currency. But the Mexican peso, the most vulnerable currency, lost 2%.
The data coming from the real economy is good. The ISM index on manufacturing purchasing managers' expectations rose to 51,9 from 51,5 in September, slightly above consensus estimates. On the stock market, Pfizer's accounts are worth mentioning, down by 0,8%, on the lows of the last seven months. The largest US pharmaceutical company by capitalization by value ended the quarter with a worse-than-expected decline in net income of 38% year-over-year. Pfizer has trimmed down its full-year revenue forecast and has decided not to move forward with the development of a new drug for high cholesterol.
OILS, SHELL ADVANCES, ENI DOWNS
Oil is still weak. The WTI falls by 0,7%, to 46,54 dollars. Brent trades at 48,2 dollars. The market remains under pressure due to record output from major exporters and uncertainty as to whether OPEC and its competitors will be able to do anything to address the global oversupply.
In London, BP is down 4% on the day of the presentation of data for the quarter: profit beat estimates, but only thanks to an extraordinary capital gain. In Amsterdam, however, Royal Dutch Shell gained 3% after releasing higher-than-expected quarterly data.
Eni-1,6%. The Italian company, together with Statoil and ExxonMobil, will invest 5,5 billion Norwegian crowns (about 608 million euros) in the development of the Trestakk extraction site, offshore Norway, less than the 7 billion estimated last January. The Italian company expects a final investment decision for the South Coral field in Mozambique to be made by the end of the year, while liquefied natural gas production should begin five years later. Tenaris-1%.
MILAN BELOW 17 THOUSAND POINTS. PMI DATA TODAY
A difficult start is announced for the European lists under the pressure of the electoral indications. In the morning, moods could change, at least in part, with the publication of the PMI indices for the Eurozone. In Milan The Ftse Mib index lost 1,32% yesterday, slipping below the psychological threshold of 17.000, at 16.898 points. Down also Frankfurt (-1,48%), Paris (-0,86%) and London (-0,53%).
Ahead of tomorrow's Bank of England rate decisions, Governor Mark Carney has announced that he will remain at the helm of the institute until the spring of 2019, in time to lead the process of leaving the British economy from the EU.
The German government's economic advisers lowered their 2017 growth estimates for the country's economy, but improved the forecast for the current year. The estimate for 2017 was increased to +1,3% compared to the previous one of +1,6%. The government currently has a forecast of 1,4%. For 2016, instead, it went to +1,9% from +1,5%; the government estimate is +1,8%: it would be the strongest growth figure for five years, supported by the increase in private consumption and by the increase in public spending. Among today's company data stands out the quarterly of Lufthansa.
PASS WAIVER TO MPS. POSTED ON PIONEER WITH ABERDEEN
The banking sector is still at the center of attention in Piazza Affari. MontePaschi recovered 0,7%. Some Arab sovereign wealth funds would be interested in subscribing a tranche of the capital increase equal to one billion. But in the meantime Corrado Passera's consortium has given up on pursuing its alternative offer. In the morning, the former minister informed that he had sent the communication of the withdrawal of the proposal to the board of directors and the supervisory board of the Sienese bank, saying that he and the investors he represents "have been denied the minimum conditions for proceeding".
The alternative plan put forward by the former minister, according to what was reported in the note, envisaged "official letters of interest from leading international investors for approximately 2 billion euro". For his part, Mps underlines that "the personal details of these investors have not been disclosed". While regretting Passera's decision, the Board says it believes it is based "on unfounded arguments and incompatible with the bank's need to ensure parity of information among its potential investors and to maintain control of the information provided to them".
Meanwhile, the auction for Pioneer, put up for sale by Unicredit (-1,7%) is heating up. Poste Italiane, down 0,3%, is said to be in the process of allying itself with Aberdeen in the tender. The Scottish asset management firm would be interested in the Pioneers' overseas assets.
The banking sector index fell yesterday by 1,26%. Understanding -1,2%. Mediobanca +0,6% . In the red Ubi Banca (-1,83): Banca Akros analysts cut the target from 4,8 to 4,3 euro, however confirming the buy opinion. The broker also intervened on the target price of the Creval (-2,6%), reduced from 0,50 to 0,45 euro.
THUD OF CNH, FERRARI AND FCA BRAKE
Discounts widespread in the rest of the price list on a day conditioned by the holiday. StMicroelectronics is down 4%, the chip maker's stock has gained 21% in the previous three days.
CNH -5,3%: the data for the quarter, released yesterday, were overall higher than expectations, but with some shadows in the segment of construction equipment. Deutsche Bank rejected the quarterly results confirming the Sell recommendation. The target price was revised downwards to $6,24 from $6,37. Kepler Cheuvreux confirmed the reduced recommendation and the target price of 5,4 dollars, convinced that the weak point remains the agricultural machinery markets. Even at Banca Akros (accumulated and target price at 7,5 euro) it seems that the context for the agricultural machinery sector is not recovering as quickly as expected. For the same reason, Equita (hold and target price at 7,1 euros) has limited its 2016-2017 estimates.
After a brilliant start FCA closes at -1%. Sales in the USA decreased in October by 10%, to 176.609 units, compared to the same month in 2015. Abrupt stop for Ferrari (-2,77%).
Leonardo +0,2% on the eve of the quarterly. Turkey has given its defense ministry the mandate to purchase another 24 F-35 jets from Lockheed Martin. Leonardo-Finmeccanica participates in the American fighter program, hedged by Morningstar with a fair value of 13 euros.
Telecom Italy -0,2%. The subsidiary Tim Brasil released the data for the quarter, down in terms of profit but better than expected. Enel on parity, Berenberg confirmed the Buy, raising the target to 4,50 euros from 4,0 euros. A2A +0,4%.
