Nervousness dominates the markets in the week of the Fed. The Chinese stock markets have resumed their downward path, accumulating losses not seen since the black Monday of August 24: Shanghai -3,2%, Shenzhen -4,5%. Beijing, over the weekend, anticipated a plan that will allow private individuals to enter the capital of numerous public companies. In August, meanwhile, industrial production rose by 6,1%, less than expected.
The Tokyo Stock Exchange was also pessimistic (-1,6%). The thud of the TLCs affected by Prime Minister Shinzo Abe's statements against current mobile tariffs weighs heavily: DoCoMo is down by 8,5%, losses exceeding 5% for the other operators.
Crude oil stable, the dollar slightly down on the yen.
FORECASTS: RATES RISE ONLY IN OCTOBER
“Expect still strong volatility in the coming weeks, no decision will be painless for the markets”. So writes Lorenzo Caruso, one of the most followed and appreciated Italian observers of the financial markets, waiting for the mother of all choices: the decision by the Fed whether or not to raise US rates.
Uncertainty, 72 hours after Janer Yellen's press conference (who hasn't appeared in public since last July), reigns supreme, as confirmed in the Wall Street Journal by Joe Hinselrath himself, the most informed reporter on the background of the central bank: " The Fed will decide in extremis,” headlines his latest speech.
In reality, after the Chinese turmoil and the Brazilian financial crisis, without neglecting the currency emergencies of other emerging countries and the collapse of oil, copper and agricultural raw materials, the "gurus" have changed their opinion: only 26% of the analysts questioned by Bloomberg expects a rate hike on Wednesday. But the decision to leave rates unchanged would in any case be accompanied by a strong message from Janet Yellen, sufficient to make an increase credible at the October meeting.
Meanwhile, Nobel laureate Robert Shiller, in addition to reiterating that the stock market is overvalued, argued that the bearish sentiment is spreading across the markets. The International Bank of Settlements issues a warning: the Stock Exchanges are under no illusions that the central banks can still come to their aid.
THE CITY MEASURES THE CORBYN EFFECT, THE BOJ RENEWS THE QE
On the agenda there is not only the meeting of the monetary committee of the Fed. Before the meeting in Washington, the summit of the Bank of Japan begins today, followed tomorrow by the press conference of the governor Haruhiko Kuroda. An increase in Japanese Quantitative Easing is not excluded for the occasion, even if the consensus is betting that there will be no changes in Japanese monetary policy.
In the meantime, the Greek electoral campaign in view of the vote on 20 September is getting underway: Alexis Tsipras will challenge his main competitor, Evangelo Meimarakis, in a televised debate.
Even more important, for European politics, is the novelty of Labor leader Jeremy Corbyn, who won the battle for the leadership of the party, despite the opposition of Tony Blair and the more moderate wing. Meanwhile, after the triumphal march on Friday, the prospect of a referendum on the independence of Catalonia from Madrid is becoming more and more concrete.
Hot Friday for the rating: Moody's updates its vote on France, S&P issues its verdict on Portugal.
MILAN +1,35% IN THE WEEK. BTP BETTER THAN BONOS
The bet on the postponement of the rise in US rates was the basis of the recovery of Wall Street's stock markets. The S&P index closed the eighth year with a gain of 2,1%, the most positive data of the last two months. Dow Jones +2%, best performance since March. The Nasdaq is even better (+3%).
Between 7 and 11 September, the FTSEMib gained 1,35% to 21.763 points. Since the beginning of 2015, the index has recorded an increase of 14,5%. The overall index of the Stoxx 600 European stock exchanges rose by 0,5% during the week. Since the beginning of the year it marks an increase of 3,7%.
In the US, the yield on T bonds rose, more as a result of Chinese sales than the approaching FOMC meeting. In the meantime, the bond markets of the Eurozone are calmly awaiting the decisions of the Fed.
At Friday's Treasury auction, the 3-year BTP fell below the 2,96% barrier (1,81%). Meanwhile, the BTP, traded at 30%, has lengthened its pace against the Spanish Bonos on whom the threat of secession from Catalonia weighs: the BTP/Bonos spread has risen up to 2013 points, the maximum since XNUMX.
FINMECCANICA LEADER IN THE MARKET PLACE, FOLLOWED BY PRYSMIAN AND A2A
The best performance of the week was that of Finmeccanica, which recovered 5,9%. Friday's rally was triggered by the news of the agreement with Kuwait, worth 7-8 billion, for an Alenia Aermacchi order for the supply of 28 Eurofighters.
Prysmian was also up by more than five percentage points, interrupting the series of four consecutive weeks of declines due to the crisis in emerging markets. The rebound is also linked to the recovery in copper prices (+10%).
A2A +4,90%. The Lombard utility intends to lead the way in the M&A season among companies with a public majority, as per the wishes of the government. The formal offer for the acquisition of control of Linea Group, controlled by the municipalities of the Bassa (Cremona, Lodi, Rovato, Pavia and Crema) will arrive by 30 September. The offer should provide for the maintenance of the brand, the headquarters and a shared governance.
FCA ON THE SHOWCASE IN FRANKFURT: GM AND FERRARI IN THE LIGHT
Fiat Chrysler Automobiles +5,08% on the eve of the Frankfurt Motor Show where there will be plenty of room to discuss the offer to General Motors and the Ferrari IPO. Meanwhile, sector analysts are slowing down on market prospects: for Max Warburton of Alliance Bernstein the cycle has already reached its peak, Goldman Sachs has revised downwards the targets of almost all producers: for FCA the target price drops from 22,1 at 18,1 euros.
But the company was dragged upwards by the strong recovery of the auto sector in Italy: in the first seven months, production rose by 25,9% and Anfia forecasts that, at the end of the year, it will return to 650 units churned out by Italian systems against 400 thousand in 2014 against a market that should absorb just over 1,5 million cars. These numbers are still much lower than the historic peaks, well above one million units, but the trend is positive: the Mirafiori plant (Suv Levanto) is back in operation, the launch of the Giulia Alfa Romeo in 2016 is approaching.
BLACK SWEATER IN STM. TENARIS AND CNH SUFFER
Hard times for Cnh industrial (-1,05%) held back by the recession in Brazil (sales of industrial vehicles in the Brazilian country -24% in 2015), a market where it generates 11% of turnover. Negative eighth, however, for Stm, which fell by 4,5%, penalized by the profit warning launched by the US competitor Fairchild.
Oil prices are still down: Goldman Sahcs does not rule out the possibility that the price of crude oil could drop as low as 20 dollars. The heaviest price was paid by Tenaris (-2,96%), due also to its strong presence on the South American market, under pressure from the Brazilian recession.
TILE FROM BRUSSELS FOR THE TLC. TELECOM CANCEL EARNINGS
Telecom Italia (-0,18%) canceled all the gains of the week, made on the wave of the increase in the share of Vivendi. The renunciation of the merger between Telenor and Telstra weighs on the sector: the two Scandinavian operators have thrown in the towel in the face of the very harsh conditions posed by the EU Commission. At this point, the other deals are at risk, which involve the reduction of the offer from four to three competitors, including the integration operation between 3 and Wind.
THE TAKEOVER OFFER ON WDF KICKS OFF THIS MORNING. THE OFFER ON PIRELLI CONTINUES
The takeover bid launched by Dufry Financial Services on World Duty Free shares kicks off today. The offer will end on October 9th.
The takeover bid by Marco Polo Industrial Holding on Pirelli shares is underway. The offer will end on October 13th.
