The Nasdaq erased its year-to-date losses yesterday. Stock exchanges are celebrating almost everywhere, thanks to the boost guaranteed by abundant liquidity. But there is the other side of the coin: the drop in US bond yields, now one step away from sub-zero interest rates, does not stop the loss of jobs. The request for unemployment benefits is on the rise (now 33,3 million): the data on the labor market, out today, will be the worst in the last 70 years. Stock market euphoria and sinister signs of recession from the bond markets are fueling a climate of strange schizophrenia, in which crucial games are being played today for our finances. The rating companies Moody's and Dbrs will issue their respective ratings on the Italian debt. The EU Commission will probably announce the "temporary framework" on state aid, paving the way for extraordinary interventions. The Eurogroup should technically define the final proposal on the planned new line of the Mes for financing. In short, lots of irons in the fire or, if you prefer, lots of confusion under the sky. To the full advantage, for now, of Toro.
IN RALLY ALL THE EXCHANGES, ASIA IN THE RACE
Asian stock exchanges advance. The Dow Jones Asia Pacific is up 1,7%. Tokyo's Nikkei gains 2%, Hong Kong's Hang Seng 1% and the Shanghai Composite 0,9%.
The optimism was fueled by the phone call between the US Treasury Minister and the trade representative Robert Lightizer with Lu He, Xi's man for negotiations with Washington. The risk of a new rift between the Greats is receding.
The dollar weakens slightly against the currencies of more solid economies. The euro climbs back to 1,0850, the yen drops slightly to 106,33 against the US currency.
BRAZIL CUTS RATES, REAL FALLS
Instead, the weaker currencies creak: Argentina has already warned of the arrival of yet another default. But the spotlight is on Brazil. Yesterday the cross-dollar real, the currency of Brazil, soared to its highest level in history, at 5,83, following the decision of the Central Bank to cut the reference rate by 75 basis points, to 3%: the governor Roberto Campos Neto he warned that this is only the first step of the emergency measures to come, the signal that another cut in the cost of money will arrive in June, never so low in the history of the country.
The US markets celebrated the Nasdaq, which returned to the plus sign for the whole of 2020: 8.979 points, +1,41%. Dow Jones +0,89%, S&P 500 +1,15%.
FLY PAYPAL, FUTURES ON THE RISE
Worth noting is the flight of PayPal (+14%): the company foresees a boom in payments in the face of an increase in online transactions. Lyft takes off (+21,7%): after the storm, the car sharing boom is looming.
The S&P500 future signals a fresh 1% gain for the last meeting of the week.
Brent oil is settling at around thirty dollars: yesterday it closed down by 0,8%, this morning it is up by 1,5%.
The oil companies of Piazza Affari recovered yesterday: Saipem +2,64%, Eni +1,58%, Tenaris +1,51%.
EU, THE AGREEMENT ON THE ESM IS NEAR
Eurozone finance ministers are meeting today by video conference to define the details of the common tools against the crisis. An agreement between the governments on the ad hoc credit line of the European Stability Mechanism seems close: yesterday evening, the Commission clarified that any access to the Pandemic Crisis Support will only entail a check on the correct use of the funds for related expenses to the emergency and not on the country's macroeconomic policies. A letter from EU commissioners Gentiloni and Dombrovskis clarifies that "no adjustment program will be activated" for the countries that make use of the Mes.
LAGARDE: "GERMAN JUDGES DON'T SCARE US"
“The ECB is not afraid of decisions of the German Constitutional Court”, says the president Christine Lagarde. “We remain ready to intervene with further adjustments in case we should see that the current stimuli are not adequate”, assures the vice president Luis de Guindos. In short, many efforts to defuse the bomb” thrown by the judges of Karlsruhe. The trust operation has worked for now.
POSITIVE BUSINESS PLACE, ARCELOR WARMING UP PARIS
Piazza Affari is positive but cautious: +0,5% to 17.245 points. Paris is much more tonic: +1,54%. The awakening of Arcelor Mittal stands out (+7%), in the face of significantly decreasing losses ("only" 1,1 billion) in the first quarter. Strong purchases also for Carrefour (+3%), judged at a strong discount by Jefferies.
IN FRANKFURT BOOM OF ZALANDO, LEADER OF E-COMMERCE
Frankfurt +1,45%. Zalando shines: +11,46%. In April, the sales of the online clothing site accelerated again. The company expects double-digit business growth in a fashion market that, according to estimates, “is expected to show significant negative growth in 2020”.
THUD OF BT (-8%). THE EU ACCUSES: LONDON DOESN'T WANT AGREEMENTS
London also rose (+1,41%), closed today for holidays. The UK's leading telecom group BT slumped 8,14% after suspending its dividend until 2021-22 and withdrawing its outlook in response to the Covid-19 pandemic.
Harsh outburst from Irishman Phil Hogan, the EU trade commissioner: “Despite the urgency and difficulties of the matter, we are progressing very slowly in the Brexit negotiations. There are no signs that our British colleagues are entering the negotiations with the intention of being successful. I hope I'm wrong, but I don't think so."
THE SPREAD FALLS: 1,90 YEARS AT XNUMX%
The reassurances of the ECB reduced the alarm on the sustainability of the Italian debt. The Italian secondary recovered in the second part of the session: the spread fell below 250 basis points and the 1,90-year rate slowed down to 2%, leaving behind the highs of over 0,55%. Yield on the Bund also fell -4% (-XNUMX basis points).
BTP ITALIA WILL RAISE UP TO 16 BILLION
On May 12, the Treasury will offer 10,5 billion 12-month and flexible BOTs. With the new Btp Italia May 2025 on offer from 18 to 20 May (the 21st reserved for institutional investors) the Treasury could raise between 13 and 16 billion euros, about double the previous edition. It is the forecast, says Reuters, of "a source close to the situation". The recent expiry - around 15 billion - of the same bond in April 2014, repaid on 23 April last, will help the operation. Furthermore, to make the offer more attractive, the Ministry of the Economy has doubled the loyalty bonus, bringing it to 8 per thousand.
ENEL LIGHTS UP THE BUSINESS PLACE, CNH BREAKDOWN
Enel (+1,99%) took care of illuminating Milan right from the start, confirming "a solid balance sheet capable of withstanding a volatile scenario". Equita reiterated the Buy with a target of 8,1 euros.
Snam presented the data for the quarter, in line with expectations. Business plan forecasts confirmed.
The most negative note came from CNH, -3,2% after the accounts: the Iveco spin-off slips. Banca Akros reduced the rating to accumulated from buy, with a target price of 7,5 euro.
UNCERTAIN BANKS, BPER UNDER FIRE
The session in Piazza Affari was marked above all by the quarterly reports, starting with those of the banks, already committed to reviewing the strategies to deal with the situation that emerged from the crisis. The big names are in red: Unicredit -1,58%, Intesa -1,11%.
Banco Bpm (-1,40%) also anticipated, like Unicredit yesterday, the arrival of a new industrial plan. The institution closed the first quarter with a net profit of 151,6 million, substantially in line with the previous year, thanks to the boom in commissions.
Bper Banca -3%, the worst. The results of the first quarter, closed with six million euros of net income, were conditioned by 50 million euros of additional provisions. The interest margin rose slightly compared to the previous quarter, while commissions fell by 3%.
MEDIOBANCA HAS ONLY 3 BILLION BTP
Mediobanca is saved (-0,27%). In the first nine months of the 2019-2020 financial year, the group achieved a net profit of 552 million euros, down by 12% compared to the same period of the previous year, due to higher provisions. The institute has only 3 billion Btp in charge.
Mps +0,28%. In the Italian banking system, mergers are "a process that can no longer be postponed", also because institutions such as MPS would encounter difficulties in "being competitive on the market by themselves". This is what CEO Marco Morelli said. The bank closed the first quarter with a net loss of 244 million.
Well the managed. FinecoBank funding (+0,7%) in April amounted to 959 million euro, +89%. Banca Mediolanum +1,15%: in the quarter loans to retail customers rose by 16% to 10,638 billion (+3% compared to the end of 2019).
LEONARDO, BOOM OF ORDERS BEFORE COVID-19
Among the industrialists, little move Leonardo on the day of the quarterlyclosed with orders amounting to 3,421 billion, with an annual growth of 35,9%. The impact of Covid-19 has been felt since March and "the weight it will have on the entire year is not yet quantifiable".
The best stocks were Nexi (+3,83%) and Moncler (+2,65%).
Recorded +2,6%. The pharmaceutical company closed the first quarter of 2020 with consolidated revenues of 429,2 million euros, up 12,1%.
GIGLIO RUNS, ONLINE COMMERCE TO THE STARS
Giglio Group, a company active in the field of electronic commerce, is among the best stocks: +6% to 3,38 euros. At the end of April, Midcap partners confirmed the Buy judgment on the stock, with a target price of 5,1 euro. The research underlines that Giglio has introduced a new business line dedicated to Healthcare and that it is one of the few companies that has not revised its estimates downwards.
JUVENTUS, WITHOUT TOURNAMENTS PLAYERS WORTH 15-25% LESS
Juventus +0,06%. A study by KPMG shows that the value of players, due to the cancellation of the national championship and international competitions, will decrease between 15% and 25%.
