Laws, Churchill said, are like sausages, it's better not to know how they are made. The future of Brexit seems destined for such a fate. To kick off Brexit Theresa May will have to come to terms with the remainers in favor of the EU or face elections that are far from obvious. The prime minister did not take into account the risk that the High Court, as has punctually happened, would impose a parliamentary passage for Brexit. It is possible that the verdict will be overturned by the appeal which will be discussed on 8 December (the day of the ECB directorate), but it is much more probable that the new balances will require a much softer exit of Great Britain. The Premier, however, wants to go straight for her, City permitting.
Once again politics breaks into the price lists. This time, however, the surprise is welcome, unlike the no-holds-barred race for the White House, amid announced scandals and possible last-minute "bombs": polls, mostly in favor of Hillary Clinton, register margins too narrowed down to be credible. In this context, today's labor market data, traditionally the most important data of the financial week, risks overshadowing.
On the other hand, the storm of criticism that the German hawks are unleashing against Herr Draghi was of great importance, just over a month from the ECB directorate which should approve the lengthening of Qe. However, the attention of this long weekend will be all for the epilogue of the harshest and cruelest electoral campaign since the time of Abraham Lincoln. It's been a crazy year, as evidenced by the success of the Chicago Cubs in baseball's World Series. Something that hasn't happened for 108 years.
BANK OF SHANGHAI IPO RECORD BIDDING: 763 TIMES
Meteo Borsa advice: don't forget your umbrella. Storms are around the corner. Asian price lists are cautious: Tokyo is down (-1,4%), after one day of closure for holidays. Earnings contained between 0,1%-0,3% for Hong Kong and Chinese markets. The Bank of Shanghai IPO, the first after a halt that lasted more than a year, recorded bookings equal to 763 times the amount offered (1,6 billion dollars) on its debut day.
The S&P500 -0,44% closed in the red for the eighth time in a row. More than double the loss of the Nasdaq (-0,92%). The Dow Jones fared better (-0,16%). The dollar moved little against the euro, weakening against the Mexican peso to 19,2 from 19,36. The dollar/peso exchange rate is considered an indicator of Donald Trump's chances of success in the presidential elections: the Republican candidate said that if he is elected he will build a wall on the border between the two countries, therefore Mexican exports to the USA would suffer a braking. The peso dropped to a five-week low on Wednesday.
FACEBOOK THUD, FITBIT COLLAPSE
Conditioning the technological list (and the S&P) was the crash of Facebook (-5,7%): the social network does not rule out a drop in turnover in the last quarter. During the conference call, Chief Financial Officer David Wehner explained that the advertising crowd is beginning to approach a saturation level.
Collapse of Fitbit (-33,6%): the earnings prospects of health bracelets are in geometric decline. Revenue in Asia fell 45%, driven by cheaper wearables from competitors like Xiaomi. Net income came in at $26,1 million, nearly half the result a year earlier.
Oil is still down (Brent at 46 dollars a barrel, -1,6%) due to disagreements between producers on the cut at the end of November and the increase in stocks sa. In Piazza Affari Eni drops by 0,7%: JP Morgan lowered the recommendation to Underweight from Neutral and brought the target price to 13,5 euros from 14 euros. Morgan Stanley confirmed the negative Underweight rating. Positive Saras (+2,68%): Credit Suisse raised its target price to 1,9 from 1,75 euro, confirming the outperform recommendation. Barclays has reduced the judgment on the action from overweight to equal weight with the target price unchanged at 1,8 euros.
MILAN IN THE RED FOR FIVE DAYS. THE STERLING RISES UP
Yesterday was an electric day for the financial markets of the Old Continent. Today the menu includes PMI data from the Eurozone. Milan closed yesterday down for the fifth consecutive session. Piazza Affari lost 0,3%, to 16.420 points, while Paris lost 0,1%, Frankfurt 0,4% and London 0,8%. The overall index of the European stock exchanges Stoxx 600 ended the day unchanged, putting an end to the longest series of consecutive negative sessions since the beginning of 2016, with eight days of decline.
After the position taken by the High Court in London, which said that the British government cannot begin negotiating Great Britain's exit from the EU without a vote by Parliament (with a majority against Brexit), the pound soars together with the banks, but the Ftse 100 went red weighted by mining giants and industrialists (exporters benefited from the drop in the pound). Unanimously, the Bank of England left interest rates unchanged and raised its 2017 GDP estimate from 0,8% to 1,4%.
THEY HOLD THE BTP DESPITE WEIDMANN
Meanwhile, the tension between Germany and the ECB is growing. Yesterday the council of German economists invited the Bank to review the Quantitative easing programme, reducing its scope and shortening its deadline. The ECB's response came via the monthly bulletin: the institute is ready to evaluate the extension of the program beyond March 2017. Berlin's finance minister, Wolfgang Schaeuble, commented that the Bank "has almost run out of room for maneuver in terms of monetary policy”, while the president of the Bundesbank, Jens Weidmann, drew attention to the risks that an excessively accommodating monetary policy can entail.
Adidas fell in Frankfurt (-6%) due to the high restructuring costs of the subsidiary Reebok. Weak BTPs, but in line with the Bunds. The long part of the curve is heavier, on which sales are concentrated which save the short ones. The 1,629-year trades at 4%. Dbrs, one of the four agencies followed by the ECB, has extended the review process, for a possible cut, of the Italian sovereign rating until after the constitutional referendum of XNUMX December.
EUROPEAN BANKS OK. IN MILAN, ONLY INTESA IS SAVED
In Europe, the greatest gains were for banks (European Stoxx of the sector +1,1%) and insurance companies (+1%). The accounts of Société Générale (+5,5%) are brilliant: the leading French bank closed the third quarter with a net profit of 1,09 billion, down 2,4% compared to the 2015 quarter. the estimates of analysts, firm at 883 million. In Paris Bnp Paribas rose by 1,4%, in Madrid Bbva gained 1,2%, in Frankfurt Deutsche Bank fell by 0,1%.
The panorama of the sector in Italy is quite different, under the pressure of the referendum and of the criticisms arriving from beyond the Rhine. In Milan, only Intesa (+1,1%) holds up, the only bank to close on positive ground. The Board meeting on the quarterly is expected today.
Unicredit -0,1% in view of the new November 10 deadline for submitting binding offers on Pioneer. Several Italian and foreign subjects remain in the competition with Amundi and Poste Italiane in the front row. Also in the running is Ameriprise Financial, which controls Threadneedle Asset Management, Macquarie and Aberdeen Asset Management, the latter particularly interested in non-Italian assets. The proposals value Pioneer at around €3,2-3,4 billion. The economically highest offer would come from Amundi.
Ubi lost 2,6%. The institute is working to reach an agreement on the acquisition of three of the four good banks, an operation which could involve a capital increase. Bper loses 1,25%. Monte Paschi was also down (-0,94%): both subordinated and senior MPS debt was down on the market, against the background of the uncertainty surrounding the voluntary conversion offer between debt and new shares envisaged by the rescue of the Tuscan institute. In fact, the report prepared in view of the November 24 shareholders' meeting called to give the green light to the recapitalization states that the conversion offer could also concern the senior debt. And the fear that the MPS affair could set a precedent for other crisis situations contributes, among other things, to favoring sales on the debt of other Italian banks.
The pressure on Carige is back (-3%), grappling with a new confrontation with the ECB on the NPL disposal plan and which, according to analysts, could lead to the need for a new capital increase. "The risk of having to resort to the market remains very high given that the institute has one of the worst "asset quality" among Italian banks and a high Srep requirement for last year, equal to 11,25%".
Things went better for the Italian insurance companies. Generali limits the decline to 0,4%. Unipol is up by 0,9%. Axa in Paris gained 1%, Allianz +0,4%.
MEDIASET AT THE MINIMUM FOR TWO YEARS. WAITING FOR TELECOM ACCOUNTS
Mediaset falls (-1,6%), to its lowest level in the last two years (-36% since the beginning of 2016). The recent statements by Silvio Berlusconi according to which the family is increasing its stake in Mediaset have been of little use. The Alfa Romeo group will present the quarterly results on November 8th.
Telecom Italia loses 0,3% on the eve of the quarterly. Good indications for the Italian TLC sector have come from Wind. The company returned to growth in the first nine months of the year, with an acceleration in the third quarter.
More sales in the Automotive sector: Fiat Chrysler (-0,8%), CNH Industrial (-1,5%) and Brembo (-2,3%) lose share. Brilliant Luxottica (+2,9%) in a decidedly opaque panorama of the Luxury sector.
