The spread is back on the front page, a measure of the small quarrels and the great risks looming over Italy and the other EU partners in Southern Europe. But it is only one of the factors holding back the markets awaiting the most important data of the week, the one on US inflation due out on Thursday, which will give some direction to all stock lists. In the meantime, the rally on the Chinese stock market has already stopped. In New York, on the other hand, the new landslide of Meta holds ground: -5%, or -40% from the highs of September. Mark Zuckerberg, with the stock market closed, also announced the resignation from the board of Peter Thiel, the legendary Silicon Valley investor who has followed him from the beginning. Thiel is leaving to take over the campaign of Republican candidates who are committed to advancing Trump's agenda.
The CSI 300 index of the Shanghai and Shenzen stock markets lost 1,1%, recovering from the initial -2%. Hong Kong's Hang Seng -1,3%. The local tech index fell by 2,2%, Alibaba -3% at home, doubled down on Wall Street.
The rest of Asia performed better: Tokyo's Nikkei +0,3%, Taipei's Taiex +0,7%, Seoul's Kospi +0,3%, Sydney's S&P ASX200 +1%. India stocks opened slightly lower.
Wall Street futures are up slightly. Last night the Dow Jones closed on parity, the Nasdaq lost 0,6%. S&P -0,37%.
Highlights include Peloton. The giant of home sports equipment scores a +20% because it is disputed between Nike and Amazon. But Apple's intervention is not excluded.
M&A is back in the skies: Frontier has bought the Spirit company for 6,6 billion dollars, giving life to the world leader in low cost.
The sale of Arm, the English tech giant controlled by Softbank, has been cancelled: the listing on the stock exchange will proceed.
The dollar appreciated this morning against its reference counterparts, the euro at 1,142, -0,2%. Slightly moved oil. Brent and WTI -0,3%. Gold at $1.820. Bitcoin at the sixth consecutive session of appreciation at 44.750 dollars.
The T-bonds rise, a thrilling ending for the BTPs
Above all, bond yields continue to rise. The 1,94-year Treasury Note is at a period high at XNUMX%.
Yesterday the Italian 1,5-year futures lost 0,4%. As a result of a strong flow of purchases that started in the late afternoon, at closing the drop was only 0,25%, then the words of Christine Lagarde rained on the market, just the day after the sortie of Klaas Knot, the governor of the Bank Dutch central bank which called for a XNUMX% increase in euro rates before the end of the year.
Lagarde makes no commitments on rates
The ECB president reiterated that there are upside risks to inflation, but remains confident that the consumer price index will return towards the 2% target. For a more precise assessment, however, it will be necessary to wait for the March meeting, when the projections of the ECB experts will provide an updated assessment” on inflation.
No commitment, in short, on rates. And, as we know, silences are often eloquent. Contrary to what was maintained up to last week, Madame Lagarde limited herself to saying that "any decision for the moment is premature". Tones that have definitively convinced operators that the celebration of low rates is about to end.
Goldman Sachs: two increases within the year
Ludovico Sapio of Barclays explains: “The radical change of tone [by the ECB] validated the expectations of investors, who were already pricing in a rate hike by December, and are now counting two or three from June, and gave the green light for a 'repricing' of peripheral spreads”. Goldman Sachs expects two increases of 0,26% between now and the end of the year. “Until the next elections for the French presidency – is the forecast of Saxo Bank – it is probable that the rhetoric of the ECB will remain focused on inflation, also for political purposes, only later could we talk about the problem of spreads. In our opinion, however, a level of 200/220 basis points for the spread between 10-year BTPs and Bunds is sustainable”. The Italian Treasury does not think so, as it sees part of the advantages of the Pnrr fade in advance. All that remains is to hope for Philippe Lane, chief economist of the ECB, the leader of the doves who will speak on Thursday.
Spread the spread over 160, Btp to 1,81%
Meanwhile, a flare-up on the secondary brought the spread to its highest level since the summer of 2020, over 160 basis points, during the session, at the end of which, however, the yield differential between the Italian ten-year government bond and the German one returned to 156 basis points, still up 2,95% from Friday's close.
The ten-year BTP closed at 1,81% after having reached a maximum of 1,90%.
Investors' attention is focusing on net supply, which in 2022 will be higher than last year and will have to be absorbed by the private sector” notes Fabio Castaldi, manager of Pictet Asset Management. "It is a scenario [the one in which the ECB buys fewer government bonds] which raises the risk premium of the most indebted countries".
Five-year credit default swap contracts are skyrocketing, with the Italian one at a record since the beginning of February 2021.
BTP yields are at their highest since mid-2020 and so is the Italy/Germany spread, the 2019-year Bund rate – still negative until the end of January – is indicated at a record since January XNUMX as is the French XNUMX-year Oat.
Together with Italy, the Greek, Spanish and Portuguese ten-year rates are at their highest since April 2020.
Milan closes in red, the other price lists with the + sign
The bond turbulence also conditioned the stock markets, splitting the Europe of stock lists in two.
Mediterranean markets lose ground: Milan -1,03% at 26.328 basis points, together with Madrid -0,16% and Athens -0,68%.
Instead, Frankfurt (+0,76%), Paris (+0,83%) and Amsterdam (+1,14%) recorded progress. Outside the euro area, London appreciates (+0,73%).
The Stoxx Travel&Leisure index rose by almost 4%. JP Morgan sees consensus forecasts for 2022 earnings as “too low” and returns on equity investments attractive relative to yields offered by bonds.
On the operational side, experts suggest maintaining an overweight position in UK and Eurozone equities.
Sentix index on euro zone investor confidence rises this month to 16,6 points from 15,2: consensus expects 15,2
German industrial production fell in December, as supply chain bottlenecks hit Europe's largest economy at the end of 2021. Data from the Federal Statistical Office show that production fell by 0,3% on on a monthly basis, after an upwardly revised increase of 0,3% in November.
Fitch cuts Enel (-3,13%): the transition costs money
The downside clouds did not spare the flagship of Piazza Affari: Enel -3,13% after the Fitch agency on Friday cut the group's long-term rating to BBB+ with a stable outlook from the previous A-. The downgrading of the second largest utility in the world by market value can be explained by the expected increase in financial leverage in the medium term, in light of the investment plan in the context of the energy transition. Conversely, Equita confirmed today the buy recommendation and the target price at 8,4 euros.
The other utilities are also in the red: Hera -4,3% and Snam -3,7%.
Stellantis: there is an agreement for the Termoli gigafactory
The Termoli gigafactory on batteries it will do. As early as next week, the agreement to build the Acc plant, an acronym for Automotive Cells Company, the joint venture between Stellantis, Mercedes Benz and TotalEnergies from which the batteries for the new Stellantis models will come out, could be made official. Termoli will be the group's third plant in Europe. A breath of fresh air for a sector in crisis. Yesterday in Piazza Addari the attempt to rebound in the automotive sector failed: Brembo and Cnh closed around parity, Stellantis - 0,97%.
Spread effect on banks, but the agreement rises
The spread effect hit Italian banks, which closed in the red against the trend of the European sector.
Intesa Sanpaolo +0,5% however regains the plus sign on the wave of positive judgments on the industrial plan. Exane Paribas raised the target price on the stock from 3 to 3,5 euros, confirming the outperform recommendation, while JPMorgan raised the target price from 3 to 3,2 euros (overweight unchanged). BofA instead increased the target from 3,3 to 3,5 euros, confirming the buy recommendation.
Ribaltone in Siena, Credem goes up
Unicredit sells more than 1%. Monte Paschi rises by more than 1% on the day of the changing of the guard between Guido Bastianini and the former CEO of Credito Valtellinese Luigi Lovaglio who will have to lead the negotiations with the EU authorities.
Credem also did well +1,6%, which accelerated after the release of the 2021 accounts with a record profit.
Among the financials, FinecoBank holds, while Poste Italiane (-2,9%), embroiled in the dispute over invoices for the eco-bonus, and Generali (-1,7%) are weak.
Still down Saipem, S&P cuts to BB-
The oil sector is weak while the price of oil retraces from the recent highs. Saipem still down (-1,09%), above the lows after leaving almost 40% of its value on the ground last week. Despite the announcement of a new organizational structure with the inclusion of two new managers to get the group back on track, the stock continues to lose share. S&P Global has meanwhile cut its rating to 'BB-' from 'BB', due to the operational fragility of the group and the increase in financial risks and has put it on CreditWatch, with the possibility of a further cut in the coming weeks if the company were to give further negative updates.
Black day for Diasorin, Stm recovers
Black day for Diasorin (-4,33%), due to the prospect of less use of tampons.
Stm (-0,6%) recovered in the afternoon after the opening of the Nasdaq.
The attempt to rebound in the automotive sector fails: Brembo and CNH close around parity, Stellantis loses 0,97%.
Edilizia Acrobatica advances in the EGM (+7,64%). The company, leader in Italy in the exterior renovation sector, celebrated the January data. In detail, the company closed last month, the first in which the Façade Bonus was reduced from 90% to 60%, achieving a +44% value in the contracts signed, which amounted to 5,47 million euros compared to 3,8 million in January 2021.
