October 2018, which will be remembered as a black month for the stock exchanges, marked by the heaviest streak of declines since 2012, gave us a finish in pink. From Wall Street to Europe, stock markets closed the month with a series of rises, starting with the Nasdaq which rebounded by 3,6% in the last two sessions. But the budget remains heavy. On Wall Street, the S&P500 index fell by 6,9% during the month, the Nasdaq by 9,6%. Despite yesterday's rebound, the decline in European stocks fluctuates around -7%. Asia fared worse: -10,2% under the pressure of the clash on tariffs between the US and China.
Is it over here? The optimists are relying on the hope that the accounts of the two heavyweights, Apple and Amazon, due tonight with the stock exchange closed, can erase the worries and give way to the year-end rally. Both quarterly results and growth (+3,7% for 2018) reduce the risk of recession. But the attitude of the Fed will be decisive.
Markets tonight took a pleased note as China, held back by the trade war, has sided decisively with the Bull. In the communiqué released at the end of the Politburo meeting chaired by Xi Jinping, it is noted that the communist party has signaled that the macroeconomic conditions have worsened, so there is a need to intervene with new tools.
China's stock markets are up following the anticipations of the arrival of new economic support measures arrived yesterday by the political authorities in Beijing. Hong Kong +2%, CSI 300 Index of Shanghai and Shenzhen Stock Exchanges +2%.
Tariff tensions have left their mark. Industrial activity stagnates, as confirmed by the PMI index elaborated by Caixin, which however rose in October to 50,1 from 50 in September, slightly better than expected. During the night, Caixin itself released its forecast indicators relating to major economies in the Asia Pacific area, in most cases are below expectations or signal a slowdown in economic expansion.
The yuan is strengthening slightly to 6,96 against the dollar, but we are still close to the lows for the period.
Tokyo retraces (-0,5%) after two days of rise which allowed the partial recovery of the price list.
GM (+9,1%) OFFERS GOOD EMPLOYEES
The US markets recovered yesterday: Dow Jones +0,97%, S&P 500 +1,09. Strong rebound of the Nasdaq (+2,01%).
Facebook shines (+3,8%) after announcing that privacy problems are now over. They warm up their muscles waiting for tonight's accounts Amazon (+ 4,4%) and Apple (+ 2,9%).
Of note is the move by General Motors (+9,1%) after the accounts: the Detroit group has decided to offer a severance pay to employees with at least 12 years of service in order to lower labor costs.
Weekly U.S. crude inventories came in at 426,004 million barrels, up 3,217 million barrels from the previous week. The consensus expected a rise of 4,1 million barrels.
Oil never so low in the last two months or so: this morning Brent traded at 74,4 dollars a barrel, down 1,4%. The sector titles in Piazza Affari were positive: Eni (+2,1%) will not be involved in the Alitalia operation. Sale Saipem (+2,4%). Tenaris did even better (+3%). The Rocca family company announced its results for the quarter tonight: net income stood at $247 million, well above analysts' estimates.
THE STERLING FLYING: THE BREXIT AGREEMENT IS COMING
Even Europe indulged in trick/treating on Halloween. With the exception of Piazza Affari, always grappling with the spell of the spread. Some brilliant corporate performances have contributed to favoring the thrust of the Euroland price lists.
On the Paris Stock Exchange (+2,3%) make-up was guaranteed by L'Oreal, +6,4% on the day the quarterly data was presented: luxury companies reacted, such as Kering (which owns Gucci ) +4,5%.
Madrid is also on the rise (+1%) driven by Banco de Santander, +3% after the data for the quarter: profit is close to 2 billion euros, much better than expected. The sector index of European banks is up 1%.
Frankfurt also did well (+1,4%) where the car rally was confirmed. Volkswagen (+1%) has announced the launch of a self-driving taxi next year in partnership with the Israeli Mobileye (controlled by Intel).
London +1,31%. But the most welcome news concerns the pound: the British currency reversed course in the evening, and appreciates at 0,778 against the dollar (+0,65%) on the arrival of rumors regarding an upcoming agreement between the European Union and Great Britain: Bloomberg reports that November 21st could be the day of the signing of the Brexit agreement which will allow, among other things, the City to continue to play the role of financial hub of the Old Continent. The Board of the Bank of England is meeting today.
This morning the euro rebounds from the lows of the last year reached yesterday: the cross against the dollar rises by 0,4% to 1,134.
BUSINESS PLACE +0,26%, SPREAD STILL ABOVE 300 BPS
In this context, Milan looks like a poor relative with a meager +0,26%.
Risk appetite has held back the Bunds and rewarded Italian bonds: the 3,43-year yield falls to 304.90%, while the differential with the Bund stops at 2,24 basis points (-XNUMX%).
VISCO: SERIOUS CONSEQUENCES FROM THE SPREAD. TRIA: THE COUNTS COME BACK
In September, the unemployment rate in Italy rose to 10,1% from 9,8% in August, while expectations were for a more limited rise to 9,9%, due to a decline in employed persons (-34.000) and the inactive (-43.000), while the unemployed grew by 81.000.
On the macro front, it should be noted that inflation in the euro area in October, according to the preliminary reading, grew by 2,2% on an annual basis, slightly accelerating compared to the 2,1% yoy in September and in line with the consensus of economists.
The rise in the spread between Italian and German government bonds reflects the risk of default and redenomination of public debt and its persistence could have serious consequences for banks, businesses and households. To reiterate it forcefully was yesterday the governor of the Bank of Italy Ignazio Visco, who warned, on the occasion of Savings Day, that the Italian public debt "is sustainable, but the determination to keep it so must be clear, placing the debt-to-product ratio on a credible path of lasting reduction". Visco recalled that 2019 billion government bonds will have to be placed on the market in 400.
The Minister of Economy, Giovanni Tria, reiterated that net debt will not rise in 2019 beyond the planned 2,4%, because the government has set the public finance balances based on the trend level of GDP. The executive estimates growth of 1,5%, compared to a +0,9% trend, also thanks to an increase in debt of 1,2 points compared to 1,2% under current legislation.
STM IN RECOVERY, CNH AND PRYSMIAN GOOD
In sharp recovery on the Piazza Affari Stm price list (+4,3%) in the wake of the sector's rally in the USA. A redemption day also for other industrialists, starting with Cnh Industrial (+2,4%) and Leonardo (+2,3%), which celebrates the narrow escape: the company will not be involved in the purchase of Alitalia. Thanks also to Poste Italiane (+2,3%).
Prysmian (+2,3%) and in luxury Moncler (+1,7%) and Luxottica (+0,6%) also performed well.
FCA SUFFERS: MEDIOBANCA CUTS RATINGS TO NEUTRAL
The negative note concerns Fiat Chrysler (-3%) which does not take advantage of the rebound in the automotive sector. Analysts have updated their valuations to take into account the lower guidance on net cash at the end of the year even if overall the targets remain well above the current stock market levels. The market does not appear relieved by the distribution of an extraordinary coupon of 2 billion in spring 2019. Mediobanca lowered its rating to Neutral.
Ferrari is on positive ground (+2,6%). Pirelli (-0,4%) paid for the effect of the disappointing results of Nokian (-10% on the Helsinki Stock Exchange), interpreted as an alarm bell for the sector. But Continental's recovery continues in Frankfurt (+1,7%).
BANKS, STRESS TESTS TOMORROW
The results of the EBA's stress tests on the banking sector will be published tomorrow. For Carlo Messina, the CEO of Intesa (-1,96%), awarded as the fourth best banker in the world by the Harvard Business Review, there are no problems for the institution. Unicredit was also down (-0,35%) but, despite the pressure on the spread remaining high, the rebound of Banco Bpm (+1%) and Ubi (+0,26%) continued.
FINCANTIERI ON A CRUISE. ELECTRONIC SMOKE AT RISK FOR GIMA
In the rest of the list, Fincantieri stands out (+2,8%) which announced signing a contract with Virgin Voyages worth around 700 million euros for the construction of a fourth cruise ship.
Bad instead GimaTT (-7,59%) which paid the fears of possible greater regulatory obstacles for electronic cigarettes in the USA. Mediobanca Securities also cut its share rating to neutral. Also down is the parent company Ima (-5,2%).
