After a limited session due to the closing yesterday of the markets in Switzerland and Northern Europe (Ascension Day) as well as in Japan, Indonesia and South Korea, the stock exchanges are ready to experience a roaring end to the week. The key appointment will be, in the early Italian afternoon, with the data on the US labor market for April: an increase of more than 200 units will demonstrate that the locomotive has not slowed down too much. The premises are not good: applications for unemployment benefits have risen beyond forecasts, to 274 thousand from 257 thousand in the previous week. It was since January 2015 that there was no increase of 6% between one week and the next. Meanwhile, the Fed enters the electoral campaign: Donald Trump has said that, in case of victory, he does not intend to confirm Janet Yellen.
Nothing new under the rising sun. the Japanese Stock Exchange resumed activity with a new decline (-0,9%) in the middle of the session while the yen returned to growth (+0,1% to 107,14 against the dollar). More disappointing data from the economy has arrived: the services index closes down in April for the first time in 13 months. The other Asian price lists are affected, awaiting the US data: Hong Kong -1,3%, Sydney -0,5%. More marked losses in Shanghai (-1,9%) and Shenzhen (-2,4%).
OIL SAVES WALL STREET. CITIGROUP CHOOSES ENI
Crude oil held back this morning (Brent at 44,96, Wti 44,21) after yesterday's sparks, which allowed Wall Street to avoid further declines after hitting the lows of the last three weeks on Wednesday. Brent oil rose 3% to 46 dollars due to the gigantic fire that broke out in the Canadian state of Alberta, in the oil well region: the damages have already caused damages for a billion dollars, at least half a million barrels a day lost production.
Chevron is up 1,6%, the largest change among blue-chips. Exxon Mobil +1,1%. In the Italian list, Eni stood out (+1,7%), included by Citigroup in its European Focus List in place of the French Total. Tenaris +2%, Saipem +0,1%. But the rebound did not boost the rest of the market: Dow Jones index +0,05%, S&P500 -0,02%, Nasdaq -0,18%.
THE TOP STOCK IS CHINESE: ALIBABA +4% AT THE NYSE. DEFLATES TESLA
The best stock on Wall Street is China: Alibaba climbs 4%. The Chinese giant of online sales of all kinds of products and services closed the fourth quarter of 2015 with an increase in revenues of 39% to 24,2 billion yuan, equal to 3,7 billion dollars. The consensus was 23,2 billion.
On the other hand, enthusiasm for Tesla waned during the session (-5%, against +4% in the pre-stock market). The electric carmaker on Wednesday evening revised upwards its production targets for the new Model S to 500 units by 2018. But a Ubs report claims that this is a bluff: the company does not have sufficient financial means to support the project which needs at least two billion dollars of new resources.
EMERGING SOS: SUMMER WILL BE HOT IN Türkiye
Among the most alarming signs is the trend reversal in Emerging markets, down by about 2% after a 10% increase since the beginning of 2016. Here is the analysis by Luis Costa of Citigroup: “There are numerous critical issues on the horizon including the slowdown in Chinese demand for raw materials. Watch out for Türkiye too. The resignation of Prime Minister Davotoglu has increased uncertainty: I expect a hot summer in Turkey”. Yesterday the Turkish lira lost 4% against the dollar.
A little further north, a general strike will paralyze Greece today and tomorrow pending Parliament's vote on Sunday on the tax and pension reform package with which Athens hopes to convince its creditors to unblock a new tranche of aid. But differences remain between Athens and its creditors on a further package of safeguard measures to be activated if the achievement of the public budget objectives set for 2018 is at risk.
MILAN -0,1%. THE SPREAD AT THE HIGHEST SINCE THE END OF FEBRUARY
European opening will also be characterized by prudence, according to futures trends. Yesterday's movements were modest: Paris was down (-0,1%), London (+0,1%) and Frankfurt (+0,2%) rose. Milan, after substantial increases in the morning (up to a maximum of 18.215 points) turned into negative territory, closing the negotiations down by 0,1% at 17.923 points. Once again it was the banks that influenced the session.
The debt markets are also worried. The spread between ten-year Italy/Germany rates once again exceeds 130 basis points, reaching 132 basis points, a new intraday record since February 29, while the December 2025 BTP rate travels comfortably beyond the psychological threshold of 1,50%.
BANKS: HEAVY WEATHER, ONLY MPS SHINES
Bank stocks are always in the crosshairs. Monte Paschi shines +4,5%, on the day of the quarterly report which recorded profits of 93,3 million (-35,2% compared to 143 million in the first quarter of 2015, "doped" by the extraordinary item of the reimbursement for Alexandria). At the same date, impaired loans amounted to approximately 24 billion euro, covered at 49%, up by 59 basis points compared to the end of 2015. The Bank is planning to create a platform, entrusted to Mediobanca, dedicated to non-performing loans . Carige is also on positive ground (+0,51%).
But the climate around Italian banks remains very heavy. Banco Popolare drops by 5%, Ubi Banca by 4,5%. Unicredit -1%: next Tuesday the Board will examine the results for the first quarter of 2016. The consensus of analysts indicates a net profit of 379 million euros.
VENETO BANCA, LISTS OF SHAREHOLDERS WON. SALES ON INTESA
Intesa San Paolo leaves 2,5% on the ground: the role of guarantor of the capital increase of Veneto Banca weighs heavily, protagonist of the twist of the day. Yesterday's shareholders' meeting surprisingly elected the list presented by the shareholders, which received 57,917% of the votes in opposition to the one presented by the board headed by the president Pierluigi Bolla.
“We are under special supervision by the Supervisory Authorities and therefore starting tomorrow we really need to start building a path that reassures the markets and is in full compliance with the indications of the authorities”' was the first message from the new designated president Stefano Ambrosini. The Supervision of the ECB has already made it known that it will "accurately" examine the curricula of the new directors to assess the absence of links with the past management.
"We roll up our sleeves, we try to generate fewer losses than those made in the first quarter of 2016, which are not very few" added the president in pectore. Regarding Atlante's possible role in the capital increase, Ambrosini said: “I've always said that it seemed to me hasty to say that there's no need for Atlante. I consider Atlante an excellent system solution and it is silly to give up opening a parachute when you have it in the plane”.
The bail-in rules aimed at not passing on the cost of bank bailouts to taxpayers could be "a source of serious risks of liquidity and financial instability" the governor of the Bank of Italy, Ignazio Visco, warned yesterday. But the bad debt alarm should not be exaggerated: the approximately 87 billion net bad debts accumulated by the banking system are in fact assisted by 85 billion in real guarantees and by 37 billion in further guarantees, says Visco, predicting a further fall in the flow of new bad debts in the 2016 after the decline observed in the fourth quarter of last year.
PERFORMANCE FEES FALL: AZIMUT THE WORST STOCK
Disappointing in asset management: Azimut -6%, worst blue chip on the day of presentation of the results. Net income fell in the first quarter to just 20,3 million, from 127,8 million in the same period of 2015, and performance fees fell to 5,7 million from 97 million. “Given the reference framework addressed, and the experience of similar situations in the past, we have no fears for the continuation of the year”, Pietro Giuliani comments in the press release, indicating the acceleration of April collection “an important sign of confidence for the months to come". Last month, Azimut achieved total net inflows of 1,1 billion, equal to 782 million net of acquisitions. In the same segment, Anima -3,5%, Banca Mediolanum -2%.
BT RELAUNCH TELECOM. ALSO ENEL ON METROWEB
The most positive note of the day is the performance of Telecom Italia: +3,4% pending the update of the industrial plan expected at the end of next week. But the good results of British Telecom, up 2,6%, also count. The British operator has announced that it will invest £6 billion over the next three years to build the super-fast fiber network and extend the 4G mobile service.
Enel too (+1%), according to Reuters, is preparing to present an offer for control of Metroweb. In the meantime, construction of the photovoltaic plant in Minnesota got underway yesterday for a total investment of 290 million dollars. Mediaset progress: +2,5% after the better than expected results of the subsidiary Mediaset España.
FINMECCANICA DISAPPOINTS, BUT THE ORDER PORTFOLIO RISES
It flops after the quarterly Finmeccanica which resets the morning's gains (maximum at 11,33 euros) and ends down by 3% at 10,69 euros. The group has announced weak results but has significantly raised its forecasts for the whole of 2016 to take into account the new order in Kuwait: an order flow of 20 billion euros is expected from the previous 12,2-12,7 billion. Net debt is 4.212 million euros, an improvement of approximately 900 million. Among the reasons for the decline is Ebita 8% lower than forecasts and perplexities for the result of the helicopter division. Among other industrialists, Prysmian advanced by 1,5%.
MARCHIONNE, AFTER GOOGLE, IS ALSO BETTING ON APPLE
Weak Fiat Chrysler (-2,6%) on the day of the presentation of the Giulia at Palazzo Chigi. The occasion allowed Sergio Marchionne to return to the agreement with Google. There is no exclusivity agreement between the two companies, said the CEO, and as "they can work with others, we can collaborate with other intruders". Therefore full availability to work also with Apple: “Our position is clear, I also told Tim Cook – he added -. I continue to make myself available to explore a model of collaboration with them as well. We cannot close ourselves off and make a selection on technologies because it is an industry that is developing and outlining its shape. There are no exclusive choices”.
