The markets continue to dance to the sound of the dollar. The recovery of the US currency, which rose to 108,77 against the yen (+0,4%), allowed the Tokyo Stock Exchange (+1,6%) to continue its recovery pending the quarterly season. China holds, also thanks to inflation data (+2,3%) in line with expectations: Shanghai -0,1%, Shenzhen -0,2%, like Hong Kong.
The recovery of the dollar was reflected in the price of oil and raw materials: despite the dramatic fire in Canada, Brent fell to 43,66 dollars a barrel (-3,8%), Wti - 2,7% to 43,44 $.XNUMX. No less robust was the impact on copper and other commodities, conditioned by the drop in Chinese demand.
The result was a session without precise direction on the US markets. Europe is better, at least before the afternoon drop in oil. Piazza Affari was the exception, with bank stocks always under pressure. In this regard, another hot day is announced: the quarterly reports of Unicredit, Banco Popolare and Bpm are expected.
FLAT WALL STREET, DOWN THE OILS
Wall Street floated around parity throughout the session: the S&P500 index gains 0,1%, the Dow Jones falls 0,2%, Nasdaq +0,3%. The oil and metals industry investment crisis caused Caterpillar to decline more than 3 percent. Oils are also weak: Chevron -2%.
Sensational crash of Lending Club (-34,9%), the P2P loan company in which the former Treasury secretary Lawrence Summers also participates: the CEO Renaud Laplanche was ousted after a series of doubtful loans.
We can try to take stock of the quarterly season: average profits are 5,3% lower than a year ago. If you subtract the energy sector, however, you break even. Financials are also bad (-3,4%).
The yield on the two-year bond fell by one basis point to 0,72%, on the lows of the last three months, confirming that the vast majority of operators take it for granted that the Fed will not move at least until the autumn. But two great "contrarians" are not of this opinion. For Bill Gross, the next increase, after that of December 2015, could be in June. For the successor (and rival) Mohamed El Erian there will be two increases in the cost of money during the year. Two Fed bankers, William Dudley and Charles Evans, also argued that a hike in June is possible.
Another twist in Brazil. The lower house first canceled the vote for the impeachment of President Dilma Rousseff scheduled for tomorrow, then backtracked. The repercussion on the real was immediate, down by 1,77% to 3,5638 against the dollar.
WHITE SMOKE FOR ATHENS. EUROPE ON THE RISE
Roaring session yesterday for the lists of the Old Continent, driven by the leap in Frankfurt (+1,12%) after the data on industrial orders (well above expectations) and by the declarations of the International Monetary Fund which said it was more optimistic on German economy. Paris is also up (+1,2%). However, the retracement of crude oil took care of reducing the rally in the afternoon: thus London (-0,18%) and Madrid (-0,58%) closed in the red.
The collapse of ArcelorMittal (-9%) weighs on Paris, which retreats after the formidable rise (+1450% since mid-February). The slowdown in the Chinese trade balance hit the steel giant. The group presented together with Marcegaglia an offer to take over Ilva which Cassa Depositi e Prestiti could join.
White smoke for new aid to Athens. At the end of the meeting, the president of the Eurogroup Jereom Djissembloem declared: "The Eurogroup welcomes the completion of the package of economic measures launched by Greece which creates the conditions for the successful completion of the first verification".
MILAN -0,8% BLACK JERSEY. 7,5 BILLION BTP AT AUCTION
Instead, it was a new bad day for Piazza Affari. The FtseMib index fell by 0,8% to 17.685 during the session, once again weighed down by the decline in banks. Without particular stress the debt market, anesthetized by low rates.
Waiting to enter the "Methuselah club" with the issue of a 50-year bond, as suggested by the debt manager Maria Cannata, the Treasury is back on track with the mid-month auctions. Yesterday evening it was announced that 5,5-7,5 billion Btp 3, 7 and 15-year bonds will be offered to the market on Thursday. On the other hand, no 30-year offers were envisaged.
POPULAR BANK UNDER FIRE: INSTITUTIONALS ARE NOT SEEABLE
The Italian banking index dropped 1,65% against a more contained -0,6% for the European basket. There is no sign of reducing the pressure on institutions, especially those engaged in capital increases. An unlikely undertaking, the president of Consob Giuseppe Vegas underlined yesterday morning during the annual meeting: "In the current market conditions it is difficult to carry out recapitalizations: the prolonged recession is weighing on bank balance sheets and on investors' assessments the problem of non-performing loans weighs on it" .
Since the morning the storm hit Banco Popolare (-8,7%). The sales were also fueled by the declarations in the meeting of the managing director Pier Francesco Saviotti, who said that the next 1 billion euro capital increase will probably see (the decision is expected for today) only the offer of new shares in option to current shareholders.
It is a change of direction compared to previous indications in which it was assumed that around 50% of the new shares could be subscribed by institutional investors interested in entering the popular bank which is preparing to transform itself into a joint stock company and merge with Popolare di Milano. Operators have acknowledged that the Veronese bank does not convince institutional investors. The 2016 quarterly report will be made public today. "It won't be much," Saviotti anticipated.
Also the "twin" bank: Popolare di Milano -7%. Monte Paschi did worse (-7,5%). Below also Pop.Emilia (-4,5%), Mediobanca (-2%) and Unicredit (-2,3%). Only Intesa (+0,6%) was saved from the decline of the banks: JP Morgan brought the new target price to 2,50 euros from the previous 2,60, confirming the Neutral rating. Ubs reduced it to 2,75 euros from the previous 2,80 euros.
MANAGED, ACCELERATE MEDIOLANUM COLLECTION
Managed savings contrasted. Cade Anima: -4,5% to 5,50 euros, new low since the end of February. Banca Akros lowered the target price from 8,1 to 7,3 euro and confirmed the accumulated rating pending the publication of the quarterly accounts scheduled for Friday. Azimut was also down (-1,5%) on which Banca Imi lowered the recommendation from add to hold and the target price from 23,7 to 21,7 euros.
Banca Mediolanum, on the other hand, rose (+2,3%). The positive trend in deposits continued in April too, fueled by the difficult moment for the banks. In April, the net change was positive by 501 million euro, rising to 2,2 billion since the beginning of the year.
SAIPEM DOWN AFTER THE S&P CUT: -60% SINCE THE BEGINNING OF THE YEAR
Negative performance also for oil, under pressure from the decline in crude oil. Especially bad Saipem (-4,5%): Standard & Poor's reduced Saipem's long-term rating to 'BB+' with a negative outlook from the previous 'BBB-' with a stable outlook, removing it from the 'CreditWatch negative'. The oil industry services company competes with Banco Popolare (-60%) for the top spot among the blue chips in the FtseMib index with a loss of 61% since the beginning of the year. Eni falls by 1,2%, Tenaris -3,3%.
ENEL-TELECOM, DISTANCE CHALLENGE FOR METROWEB
Among the utilities Enel (-0,3%): the quarterly report approved last night will be announced today. The remote challenge for the control of Metroweb, valued by the electricity group at over 700 million, will take the stage. Yesterday evening, however, Telecom Italia (-1,2%) offered approximately 820 million for 100% Metroweb. The proposal contains the option for CDP and F2i (the two partners of Metroweb) to be able to immediately sell 100% of the fiber company or to sell 67% initially and then bring Telecom up to 100% in two-three years. The offer also includes the possibility of an asset swap with CDP involving Sparkle, controlled by Telecom.
Enel could continue its broadband plan even on its own. To say it is the financial director of the company Alberto De Paoli answering the questions of the analysts on a possible offer for Metroweb: “We have a plan on the infrastructures for the broadband on which we can also proceed in a stand alone way. Metroweb can accelerate our program and for this reason we have looked to the company, but we can also continue stand alone if this transaction does not close".
BRAKING FCA. FUNDS PUT PRESSURE ON VOLKSWAGEN
Among industrialists, Fiat Chrysler falls (-1,5%). In the automotive sector, however, Volkswagen stands out: +2,13% after traveling with an increase of more than 4% in the morning. The offensive of an activist fund, the English Tci, supports the title. The manager Chris Hohn sent a letter to the Volkswagen board in which he asks to review the salaries of senior managers (63 million euros at the end of 2015, despite the losses). Low profitability is also under fire, much lower than the competition.
Leonardo-Finmeccanica falls by 1,2%. Yesterday Equita reiterated the Buy recommendation with a target price rising to 15,50 euros from 14,80 euros. Stm was also down (-2,3%).
CAMPARI, LUXURY AND RCS TAKE FLIGHT
Campari closed up 2,9% after publishing better-than-expected quarterly results. Positive luxury stocks: Ferragamo +2,3%, Luxottica +1,1%, Yoox +1,6%.
Leap of RCS (+5,2%): Mediobanca has officially announced that it will evaluate various options that better value its stake, including "maintaining the same or any alternative proposals it may receive".
