Many promises, few details. But more relaxed tones and the promise that "America will once again lead the world". In his first speech to the American Congress Donald Trump has certainly disappointed those who expected some more specific signals on taxes, investments and new rules for finance. But the markets, judging by initial reactions, liked the more conciliatory attitude on immigration and trade relations.
The result? Wall Street futures signal a slight downtrend. Positive Asian stock exchanges, driven by the dollar. The most relevant data concerns precisely the strength of the US currency, also supported by the declarations of some Fed governors.
William Dudley of New York, in particular, said that "the squeeze is becoming more and more urgent". John Williams of the San Francisco Fed has increased the dose: "I don't see a single reason to postpone". But most traders are now convinced that the central bank will raise rates at its March 15-16 meeting.
TRUMP PROMISES, OBAMA COLLECTS 65 MILLION FOR THE AUTOBIOGRAPHY
The big deal yesterday was done by former president Barack Obama, who, together with his wife Michelle, signed a 65 million dollar contract for a book on their experience in the White House.
Meanwhile, his successor has reiterated, without adding details, that he will initiate a "historic tax reform that will allow American companies to compete anywhere and with any competitor". But also a "relief" for middle-class taxpayers. The willingness to launch a trillion dollar infrastructure investment plan has also been confirmed.
The wall with Mexico will only serve to stop drugs and criminals (the weight goes up), but there is important news on immigration: there will be a law, the president said in a press conference before the speech, which will allow the position to be regularized of immigrants "who are not criminals". The administration's priority will be to abolish Obamacare and replace it with an "affordable" policy-based system.
IMPROVE THE ECONOMY IN CHINA AND JAPAN
Asian markets' reaction to Trump's words was composed. The Tokyo Stock Exchange is starting to close up 1,4%. Chinese markets are positive: Hong Kong +0,2%, Shanghai +0,5%. Very comforting signals have arrived from both Japan and China on the economic recovery. The Caixin PMI on expectations of purchasing managers of China's manufacturing companies beat expectations, rising to 51,7 in February. JP Morgan raised its forecast for China's 2017 GDP this morning to +6,6% from the previous +6,2%.
THE DOW JONES STOPS AFTER 12 INCREASES: IN FEBRUARY +4,8%
Last night the record of records vanished on Wall Street. After twelve consecutive rises, the Dow Jones index (-0,15%) closed in the red: in 120 years there has never been a streak of thirteen rises. In February, the index gained 4,8%. The S&P (-0,33% yesterday, +3,7% in February) and the Nasdaq (-0,67%) are also in negative territory.
Macro data argue in favor of a forthcoming rate hike: the consumer confidence index rose in February to its highest level since 2001, a stronger than expected increase. Expectations from Chicago area purchasing managers also rose to 57,4 from 50,3 in January, the highest since early 2015.
In the fourth quarter of 2016, growth was confirmed at +1,9%. Median home prices in the country's 20 largest urban areas rose 5,6% yoy in December, the sharpest increase since November 2015.
It was the bond market that moved the most, sold after the positions taken in favor of an increase in interest rates. The Treasury Bill yield rose to 2,41% from yesterday's 2,37%. Interest rate futures have even given a more than 70% probability of a rise in the cost of money in mid-March: on Monday they gave it at 50%.
The dollar appreciates against the euro to 1,055. Gold retreats to $1.244. Brent oil rose 1,8% to 56,6 dollars a barrel this morning, after closing yesterday down 0,6%. The collapse of Target (-12,5%) weighed on Wall Street.
THE FEVER ON GOVERNMENT BONDS IS COOLING OFF, MILAN FLAT
Trump's soothing tone on NATO and on relations with European allies could also favor a positive start for European markets. The reaction to the probable next increase in US rates needs to be verified. Yesterday the climate was calmed by the latest polls on the French elections (Emmanuel Macron ahead of Marine Le Pen) and, for Italy, the prospect of voting only in 2018.
The Milan Stock Exchange closes flat thanks to the push of banks and oil companies. They held back insurance and utilities. The Ftse Mib closed the session at 18.913 points, down by 0,01%, eliminating the rise accumulated during the day. More solid performance for the other major European lists: Paris +0,4%, Frankfurt +0,2%, London +0,4%.
BUSINESS PLACE +2% IN THE MONTH, BUT -1,5% IN 2017
The results of Piazza Affari in February are positive. The FtseMib index gained around 2%, the Star index (which groups together mid-cap companies) 6,6%.
Milan managed to keep up with Frankfurt (Dax +2,6%), but this was not enough to erase the loss since the beginning of the year (FtseMib -1,5%), the worst performance in the Eurozone.
The Italian economy will grow by less than 1% in the two-year period 2017-2018. According to Standard & Poor's, current concerns about the health of the banking sector and domestic political uncertainty will probably have a negative impact on credit expansion, thus hindering the recovery of investment by businesses.
The deflation nightmare is now behind us. According to Istat's preliminary estimate, in February the consumer price index rose by 0,3% on a quarterly basis and by 1,5% on a trend basis, an acceleration compared to the +1% in January and the maximum since March 2013. The inflation acquired for 2017 was equal to +1%.
The bond market rears its head, thanks also to the coverings in view of the end of the month. The spread between 190-year BTPs and Bunds thus slips below 2,08 basis points, the lowest for a week. The yield of the BTP rose to 2,12%, from XNUMX% on Monday.
Confirming the positive approach to demand is the outcome of the reopening for Btp and CctEu specialists. Out of the total of five securities offered, not only was the maximum amount of 1,2 billion euro assigned.
ENI ON THE RISE BEFORE THE ACCOUNTS. GOLDMAN SACHS BRAKES TENARIS
Wake up at dawn this morning for the operators. Not even time to record the incoming message from Donald Trump And the time has come to devote himself to reading Eni's accounts +1,11% yesterday, communicated before the opening of Piazza Affari together with the new 2017-20 business plan. Among the most significant data. Fourth quarter adjusted operating profit amounted to €1,29 billion, +103% compared to fourth quarter 2015. Fourth quarter adjusted net profit amounted to €0,46 billion supported by robust E&P recovery. Adjusted net result for the year substantially at breakeven (-€0,34 billion).
Saipem +2,3%. Tenaris -1,5%: Goldman Sachs lowered the target price of the stock to 15,6 from 16,1 euros, confirming the neutral recommendation. Saras +5%: Kepler Cheuvreux has raised the stock recommendation from veteran to hold while Equita Sim has increased the target price from 1,75 to 1,93 euros.
THE EBA GIVES THE BANKS SUFFICIENCY, BANCO BPM FLIES
Yesterday evening the European banking authority released the results of the test on banking institutions. The report card is sufficient for everyone and there are no failures: "The capitalization of European banks improves having reached an average Common Equity Tier 1 (Cet1) of 12,8% in June 2016 in line - as of now - with the full implementation of the norms". All the banks in the model focus on future capital needs by revealing "zero shortfalls" for the full implementation of the minimum Cet1.
The exercise covers a sample of 164 banks in the European Union, including 23 Italian institutions. The Italian sector index gained 0,91%, the European one 0,56%. Unicredit +1,5%, Intesa +0,6%. The rebound of Banco Bpm continues (+2,7%).
Male Carige (-3,05%) on the day in which the new industrial plan was announced, with the stock exchange closed, which provides for the deconsolidation of the business branch including the non-performing portfolio and a capital strengthening of the bank through a capital increase ' up to 450 million.
Generali still loses ground (-1,31%). The company dropped from 4,49% to 3,408% of Intesa Sanpaolo. The CEO Philippe Donnet points out that "the group is doing very well as we will see on March 16, on the occasion of the presentation of our 2016 financial statements. Our priority is Europe and we want to further strengthen ourselves in Europe".
Banca Mediolanum -0,2%, Soul +3,9%. Italian post office -0,1%.
MONCLER GROWS BY DOUBLE-DIGIT, DOWN WITH YOOX
Leonardo salt (+1%). Natixis raised the target price on the stock from 12 to 15 euros, confirming the buy recommendation. Fiat Chrysler -0,8%: February auto market data is expected today.
Moncler (+1,3%) did well in luxury, which released its quarterly report yesterday evening. The duvet brand is growing in double digits and knocks down the billion mark in revenues. The group closed 2016 with a consolidated turnover of 1,0403 billion euro, +18% compared to the previous twelve months. Ferragamo +0,8%.
Yoox Net a Porter -1,7%: Nathalie Massenet, one of the founders of Net a Porter, left the company to become an executive at Farfetech, an online shopping platform.
Dada +7%: since the beginning of the year, the leader in digital services for SMEs is up 13% after +41% in 2016.
Sogefi +11% thanks to the accounts released yesterday, with a jump in profit and strong cash generation in the fourth quarter of 2016.
Beni Stabili +4,5%: JP Morgan raised the recommendation of the stock to overweight from neutral with the target price remaining at 0,72 euro.
