SANCTIONS IN MOSCOW WEIGHT ON EU PRICE LISTS. BUT THE BULL IS HOPE FOR US QUARTERLY
The week of price lists begins under the sign of geopolitical tensions. The Tokyo Stock Exchange was closed for holidays, Asian lists were flat or almost flat, despite the positive closure of Wall Street at the weekend: Shanghai rose by 0,04%, Sydney +0,2%.
On the contrary, a departure marked by the volatility of the European markets is expected: the prospect of new sanctions against Russia looms large. Among the most exposed Italian stocks Eni ed Enel, in addition to Pirelli which Rosneft has just entered. Meanwhile, Severstal, Aleksej Mordashev's steel giant, has announced its intention to leave the United States.
However, the lists restart from record levels despite the shooting down of the Malaysian jet over the Ukrainian skies, the war on the Gaza front and the mini-crack of Banco Espirito Santo were not enough to make the Bull waver on stock lists.
The balance sheet for the week closed as follows: on Wall Street the S&P index rose by 0,5%, the Dow Jones by 0,9%. Despite the 32% jump on Thursday 17 after the attack in Ukraine and the attack on Gaza, the index of fear, or volatility, closed down by 0,1%.
The overall index of the Stoxx 600 European stock exchanges rose by 0,7%. From the beginning of the year it marks +3,6%. Utilities, cars and TLC are pulling the sprint: according to analysts, the average profitability of European companies is up by 14%. The FtseMib index is positive by 0,59%. Since the beginning of the year, the performance has increased by 9,3%.
FEAR RISES, BUND YIELDS AT THE MINIMUM
Risk aversion made itself felt on the bond front. The yield on the 10-year German Bund hit a new low at 1,15% on Friday. The US T bond fell to 2,48%.
On the Italian debt front, yields continue to show a flattening of the curve, with few precedents, in the 2- to 5-year stretch, while the long part, even after the race to lower rates, still does not express very low levels. The 30-year yield recovered on Friday to 4%, about 120 cents above that of the 10-year.
After the mid-month auctions with new lows on some maturities, the next appointments are for the second part of the week when the quantities of the various government bonds at auction at the end of the month will be known.
WAITING FOR APPLE ACCOUNTS. DOUBTS ABOUT US CAR
Skepticism about the quality of the recovery is growing in the USA. This morning the New York Times publishes a lengthy investigation into the subprime boom in the auto sector which has supported sales: one in four purchases in the last twelve months has been made possible by loans to unsecured customers.
In the meantime, however, Wall Street is expecting a series of comforting data from the accounting season that has now entered into full swing. During the week, 140 S&P 500 companies will release second quarter data. These include Netflix, Mc Donald's, Boeing, Apple and Microsoft, which has already announced 18 redundancies, mostly in the subsidiary Nokia.
Of the 82 companies that have already reported results, 77% beat profit estimates, 70 beat revenue estimates. The performance of Intel +7,6% and by JP Morgan + 4,4%.
The effect of the alarm raised this week by Fed chair Janet Yellen on the "substantially stretched" quotations of stocks in the social media and biotech sectors needs to be measured. An alarm that recalls the warning against the irrational euphoria” of the dot.com launched by Alan Greenspan in the XNUMXs. Facebook it retreated 3,3% on Friday.
In Europe, the most significant expected macro signals concern the consumer confidence index of the EU countries and the Markit indicators on the trend of manufacturing activity. Data will be published between Wednesday and Thursday.
ARGENTINA, THE MARKET BETS ON THE REFERRAL
Last bets before July 31, the deadline set by the New York judge for the repayment of the credits of the hedge funds holding the Buenos Aires bonds.
Dollar-denominated Argentine bonds gained 3,6% on Friday on market speculation that funds are willing to freeze the effects of the ruling and have more time to negotiate a compromise. At the moment, if the parties fail to reach an agreement, at the end of the month Argentina - which has repeatedly declared that it does not intend to repay the hedges in full - would incur another default on its sovereign debt.
AIRLINE SECTOR UNDER STRESS. AUTOGRILL GOES OFF
The deadline for the agreement between Alitalia and Eitihad is approaching, pending the dissolution of the union issues. Meanwhile, to pay more than all the effects of the crash of the plane over the skies of Ukraine were the titles related to air traffic.
In Piazza Affari they were hit Rest -1,7%, a leader in US airport dining, e Atlantia -0,9%, which manages the Rome Fiumicino airport. It's an exception WorldDuty Free achieved an increase of 2,2%. Among the airlines, Friday is behind Air France-Klm -2,1% Lufthansa -1,1%. Ryanair leaves 1,9% on the ground.
MURDOCH ATTACKS. AFTER THE USA, IT'S THE TURN OF EUROPE
Among the most relevant notes of the financial week stands out the leap on Wall Street by Time Warner +21% after the offer, for now rejected, by Rupert Murdoch's 21 Century Fox. The match has just begun. Market sources inform that the "Shark" has collected 25 billion cash to support the offensive.
Meanwhile, the plan to reorganize European activities is accelerating. According to the Sunday Times (controlled by Murdoch) Sky could close the acquisition of its "sisters" in Italy and Germany in about ten days, thus finalizing BSKYB's plans for the creation of a European pay TV giant made up of BSkyB (the parent company in which Murdoch owns 39%) 100% of Sky Italia and by Sky Deutschland, now listed on the Frankfurt Stock Exchange (controlled with 57%). Sky Italia would be valued at between 3 and 5 billion euros, while the takings from Sky Deutschland would be in the order of 3,5 billion.
The moves of the Murdoch group could have consequences on the performance of Mediaset, now allied with Telefonica on the pay TV front but which could speed up the negotiations for the entry of other partners. Telecom Italia is also closely involved, allied with Murdoch in Timedia. The ex incument has been reduced for a week agitated by the issue of the bond with which Telefonica reduced its stake in the Italian company from 14 to 8%.
RUMORS ABOUT FIAT BEFORE THE GOODBYE
Minus ten. In ten days (eight trading sessions) the last shareholders' meeting of the Lingotto will decree the merger of Fiat into Chrysler and the launch of the activities of FCA, a holding company incorporated under Dutch law with registered office in London.
In the meantime, a thriller fueled by the German press was unleashed on the stock: Exor, through Roland Berger, allegedly contacted Volkswagen to negotiate the total or partial sale of Fiat/Chrysler. Originally there would be the intention of John Philipp Elkann to shift the group's focus from four wheels to new media, perhaps in alliance with James Murdoch. The two groups flatly denied, but the Fiat stock closed the week on positive ground. On the other hand, Cnh Industrial was down: the negative data arriving from Volvo -5,4% on the Stockholm Stock Exchange weighed.
LUXURY, FERRAGAMO AWAKES
Salvatore Ferragamo was at the top of the Ftse Mib index on Friday +5,2%. Among the blue chips, supported by Exane which raised its recommendation to Outperform from Neutral, the target price is 25 euros. The other luxury titles moved little, with the exception of cucinelli +3,3%, which yesterday released good results for the second quarter.
GTECH ALSO CHOOSES LONDON. AND WALL STREET
Among the news of the week, the purchase by Gtech (formerly Lottomatica) of International Game Technology (IGT), global leader in the casino and social gaming sector based in Las Vegas, Nevada, should be mentioned. At the end of the 4,7 billion dollar transaction, the two companies will merge into a newly established holding company incorporated under English law which will have its fiscal headquarters in the United Kingdom. Other operational headquarters will be Rome and Las Vegas and Providence but only Wall Street is expected to be listed: Piazza Affari thus loses 3,3 billion in capitalization.
