"I think Americans can sleep peacefully tonight." Wall Street heeded the advice of Secretary of State Rex Tillerson, who wanted to reduce the alarm triggered by President Trump's bellicose statements against the threat of North Korea. The modest drop in the Dow Jones (-0,17%) and other indexes, as well as the moderate rise in safe-haven assets (gold, yen and T-bonds), show that the markets remain skeptical of the risk of a conflict. Yet the danger is real, just as the value, even symbolic, of a possible attack on Guam, the US base in front of the Mariana trench that the marines reconquered in July 1944 at the cost of thousands of deaths after furious melee with the Japanese led by General Ohata (who did harakiri rather than surrender).
The atoll that emerges from the sea where the Pacific Ocean is deepest (11 thousand meters), has a fundamental weight in US strategies: Guam, thanks to investments of at least 9 billion dollars, from 2020 will be the basis for a force of emergency response elite capable of responding within hours to Chinese or Korean military actions. A fortress, in short, a stone's throw from the five-star hotels and the huge shopping centers for the cheaper Japanese tourists (too poor to indulge in shopping in Europe) which arose twenty years ago, when it was thought that in the era of the global market, wars could only be commercial.
DOWN ASIA, MODEST RISES FOR GOLD AND FRANC
The temperature of the financial markets remains so hot this morning. The Asian markets contrasted: after a multi-faceted session, with positive flashes, the main lists took the downward path. The Seoul Stock Exchange fell (-0,3%), recovering from the initial -1%. Hong Kong is doing worse (-1,2%), dragged down by financials. Shanghai limits losses to 0,3%, in line with Tokyo.
Traditional safe-haven assets are rising, but at a slow trot: gold trades at 1.273 dollars an ounce (+1,3%). The yen is stuck at 110 against the dollar. The Swiss franc, after an initial rise of 1% against the dollar, has returned to its previous levels.
The yield on the 10-year Treasury Bill fell to 2,24%, from 2,26% yesterday. The chairman of the Chicago Fed, Charles Evans, said yesterday that the rate hike should be the subject of discussion in the last meeting of the year, that of December 12-13, when there will be more elements on the trajectory of inflation. The voting member of the Federal Open Market Committee believes that the reduction of the central bank's balance sheet will be discussed on September 19.
The euro traded at 1,1744 this morning. Oil also showed little movement this morning: Brent at 52,68 dollars a barrel. Prices rallied yesterday after US crude inventories fell sharply. Limited changes in sector stocks: Eni -0,3%, Saipem -0,4%.
DEFENSE TITLES RISE IN THE USA, WALT DISNEY LANDSLIDE
Wall Street reduced its initial losses during the session (-0,5%). In the end, the Dow Jones index (-0,17%) closed at 22.048,17 points. The Nasdaq was also down (-0,28%), with little movement from the S&P 500 (-0,04%). The Vix Volatility Index soared in early trading hours, then fell 11,1 points at the close, up 1%. Geopolitical tensions favored the rise in defense stocks: the sector index, the best, recorded an increase of 1,6%. On the other hand, Walt Disney (-3,9%) fell sharply, in full conflict with Netflix (-1,45%) after canceling the streaming contract.
BUSINESS TOO DOWN, BUT INDUSTRY SETS A RECORD
The effect of Donald Trump's "Fire and Fury" warning in response to threats from Pyongyang also interrupted the placid summer of European stock markets, which slipped into the red despite the recovery of the dollar. In Milan, the Ftse Mib index fell by 0,91%, 21.848 points. Negative results for Madrid (-1,29%) and Frankfurt (-1,12%). Fractional decrease for London (-0,59%). The worst price list is that of Paris (-1,4%) penalized by the attack of Levallois-Perret, at the gates of the capital. On the macro front, it should be noted that industrial production in Italy rose by 1,1% in June compared to May, and by 5,3% on an annual basis. On average for the first six months of the year, production increased by 2,2% compared to the same period of the previous year. A result all the more significant because it coincides with the slowdown of the German industrial machine (-1,1% against the forecast of a growth of 0,3%) and of Spain (-0,1%).
“The figure that clearly improves growth prospects: for second-quarter GDP . commented Loredana Federico of the Unicredit research office – we have an estimate of 0,3% which we could however revise upwards also on the hypothesis of a restart of investments”.
A MAXI SALE ON BTPs. TODAY THE AUCTION BOT
Closing around parity for the Italian secondary, after a sharp drop recorded on a large sell order around mid-session. The 2,010-year term closed at 158%. The Italy-Germany yield differential on the ten-year stretch recorded a jump in the middle of the day. From around 12,45 basis points at around 162, the spread has risen to XNUMX basis points.
Shortly before 13 pm there was an order to sell 570 million on ten-year Italian bonds from a single investor. Today the Bot auction is on the calendar, the Treasury has announced that it will make available to investors 6,5 billion euros in 12-month Bots against a maturing amount of 6,6 billion.
Yesterday, Greece placed 1,138 billion euros of 13-week government bonds in the regular auction for the refinancing of maturing short-term debt and Germany assigned 3,019 billion Bobl with a declining average yield.
BREMBO, LEONARDO AND RECORDATI ARE SAVED
Few stocks recorded a positive sign at the end of the day: among these, Leonardo +0,48%, Recordati +0,45% and Atlantia +0,23%. Enav (+0,2%) eliminated the losses in the final. The company confirmed the forecasts for 2017 and the dividend up by 4% on 2016. Alitalia, said CEO Roberta Neri, is making timely payments to the flight control agency. Best of all Brembo (+0,70%) which thus partially contains the losses of the automotive sector. Fiat Chrysler fell sharply (-2,1%).
BANKS UNDER FIRE. INTESA BUYS BANQUE MORVAL
The heaviest losses hit the banking sector. The Big Europeans suffer: in Paris Bnp Paribas -2,3%, Société Générale -2,9%. In Frankfurt Deutsche Bank loses 3,7%. In Italy the sector loses 1,3%. There are comforting signs on the suffering front. Based on Bank of Italy data, gross ones fell to 192,0 billion euros from 202,1 in May, net ones to 71,2 billion from 76,5 in May.
Unicredit (-1,8%) and Intesa (-1,39%) are in negative territory, despite the positive assessments of brokers: Macquarie has raised Unicredit's target price to 22 euros from 21 euros, Kbw (Keefe, Bruyette, Woods ) raised Intesa's target to 3,29 euros from 2,85 euros. The bank led by Carlo Messina is about to buy Banque Morval, a Swiss financial company specializing in asset management with offices in Lugano and Geneva. Ubi -1,3% and Mediobanca -1,8%. Banco Bpm was also down (-1,1%). SoCgen has raised the target to 3,90 euros from 3,50 euros. Buy confirmed. Rbc raised its target to 4,6 euros from 4,20 euros. Outperform rating confirmed.
Bad day also for Generali (-1,3%) and Banca Generali (-1,9%). Unipol -1%.
IL SOLE SELLS THE BUSINESS SCHOOL24
Utilities are weak: Enel loses 0,7%, Telecom Italia -0,2%. Strong loss of Buzzi (-3,2%) after a fire blocked the activity in a factory in the USA. Il Sole24Ore was highlighted (+9,43%) which completed the sale of 49% of Business School24, the new name of the Training area, to Palamon Capital Partners for 39,2 million.
