Emigration and duties. A weekend of very high tension for the planetary balances is announced. Words of fire flow in Europe on the eve of a summit which, having shelved the Franco-German plan, seems doomed to failure or to a tiring compromise. A bitter way to celebrate the end of the Greek emergency sanctioned by the Eurogroup: after eight years the era of the Troika is over. The agreement provides for the extension of ten-year repayment terms on 97 billion of loans related to the second bailout.
The migrant theme also holds sway in the family of the most famous "separated at home": Melania Trump flies to the borders in solidarity with the children of migrants, Donald shows off the harsh tones again. The great chaos on migrants helps to spread the great cold that has taken hold of the financial markets, under the grip of the trade war. The earnings alarm launched by Daimler, the first major victim of the trade wars, is spreading the contagion almost everywhere, starting from Asia. BMW has anticipated that, given the situation, it will have to examine "strategic options".
- The Japanese Stock Exchange loses momentum this morning, down by 1%. Toyota, which like Daimler manufactures its SUVs for China in Kentucky, was down 2,9%.
- The other Asian price lists are also down. Hong Kong -3,9% during the week, is at its lowest for six months, that of emerging countries for nine months. Taipei 0,5%, while the CSI 300 index of the Shanghai and Shenzen stock exchanges, after a downward start, reversed course and is now up 0,2%.
- On parity Seoul, slightly down Mumbai. India has also joined the countries that have raised rates on imports from the US, in response to the tariffs imposed on aluminum and steel. But Washington does not change course despite the EU's retaliation taking place today. Meanwhile, July 6 is approaching, the starting date for the new tariffs on Chinese goods.
- The dollar crushes the Chinese yuan, the cross climbs to its highest level since January at 6,50. Morgan Stanley believes that the loss in value of the yuan, as well as the currencies of emerging economies, will continue in the second half of the year.
- The US currency prevails over the emerging currencies, while it retreats against the euro, to 1,161.
DOW JONES, EIGHTH DOWN IN A ROW. AMAZON WILL PAY THE TAXES
The US markets are also down. The Dow Jones index -0,8% closed lower for the eighth consecutive session. S&P 500 – 0,63%, Nasdaq -0,88%.
A historic sentence by the Supreme Court contributed to accelerating the descent: with five votes in favor and four against, the judges said "yes" to taxes on sales on the web, even if the retailer does not have a physical presence in the State in which the purchase is made. Amazon left 1,9% on the ground, and Bay -3,2%.
Thump of Intel -2,4% later the firing of Brian Krzanich. The CEO is guilty of having a relationship with a (consenting) employee, thus violating the internal code.
But the reductions are mostly linked to the node of duties: Caterpillar - 2,52%, Boeing– 1,5%. Automotive stocks are down sharply (.1,8% the sector index): Gm-2% Ford -1,4%. Tesla -4,66%.
OIL DEAL. ONE MILLION BARRELS MORE
Oil goes up this morning: Brent trades at 74.00 dollars a barrel (+1,3%), Wti at 66,42 (+1,35%). This morning, at the end of an all-night marathon, OPEC members meeting in Vienna said they had reached an agreement in principle on an increase of one million barrels a day. The representative of Iran, Bijan Zanganeh tried in every way to oppose the increase in production, at one point of the night he left the meeting. But this morning Oman's oil minister instead said that Iran should comply.
In Milan yesterday Eni -1,7% Saipem -1,9%.In positive ground Tenaris.
MILAN BLACK JERSEY, THE DAIMLER ALARM FREEZES THE PRICE LISTS
Many factors at once contributed to bringing uncertainty back to European stock markets. A key role was played by Daimler Daimler's warning due to the new import duties on cars exported from the United States to China. But the other more indigestible ingredients come once again from Italy, the black jersey of the day: among these appointments to the top of key parliamentary committees by Claudio Borghi, who wants MPS permanently in public hands, and by Alberto Bagnai, who is against the reform of cooperative credit and cooperative banks. Two choices sufficient to eliminate the positive effect of progress on bank non-performing loans. But the expectation of Donald Trump's retaliation against the European tariffs in force from today weighed even more on the markets, coinciding with the PMI data for the eurozone, which do not bode well.
MILAN BLACK JERSEY. LAGARDE (IMF): ITALY IS A REBUS
- Milan, after an upward start, dropped 2,02% at 21.673 points, at its lowest in two weeks on trading of 2,5 billion.
- The International Monetary Fund is seeking clarity from the new Italian government on its economic plans. The director of the IMF Christine Lagarde said yesterday: "We still don't know what general economic policy Italy will apply." “We hear – she added – some reassuring statements in terms of fiscal discipline, debt reduction trends, but the markets are quite nervous”. A team of IMF experts will be in Italy in two weeks for an already scheduled visit.
BANK OF ENGLAND, HAWKS GROW. ROME SCARES ZURICH
- The other price lists are also in red: Paris -1,05%, Madrid -0,83%. Frankfurt -1,44% under pressure from the auto sector.
- In deep red Zurich -1,11%: the Swiss central bank has not touched rates. Political uncertainty surrounding Italy's new anti-establishment government could pile renewed bullish pressure on the Swiss franc and hurt the country's economic growth, according to the Swiss government.
- London -0,93%. The Bank of England left rates unchanged at the end of the monetary policy meeting, but surprisingly its chief economist, Harry Haldane, joined the minority of board members calling for a hike.
SPREAD TO 241 AFTER THE APPOINTMENTS OF BORGHI AND BATHERS
“Since everyone knew we were going to be nominated, this is proof that (markets) are either unable to get obvious information or are unable to incorporate it into prices.” This is how Alberto Bagnai commented on the widening of the spread that began immediately after his and Claudio Borghi's appointment as head of the Senate Finance and Budget Committee in the Chamber.
The trend was accentuated during the session: the Btp/Bund gap widened to 243,9 points (record since 11 June) before closing at 241 basis points.
2 BTPs SPREAD, 3 BILLION CTZ AT AUCTION
The yield of the two-year BTP jumps to 0,86%, +32 basis points.
On the occasion of the auction on Tuesday 26 June, the first appointment with end-of-month placements, the Ministry of the Economy will make available to investors a total of between two and 3 billion euros of new indexed Ctz and Btp paper.
AT PIAZZA AFFARI CARS AND BANKS IN FREE DESCENT
On the stock market, sales prevailed in all sectors, starting with the automotive industry after the fuse triggered by Daimler's profit warning – 4,32%. The European sector index dropped by 3,2%.
In Milan Fiat Chrysler -4,17%, back to early April levels. Brembo -2% Ferrari -1,5%. holds Cnh Industrial -0,48%.
banking on the lows of the day. The sector, hit by the increase in the spread, leaves 2,4% on the ground, one point more than the European index. Unicredit -3,2% concluded an agreement with MbCredit Solutions for the sale without recourse of a portfolio of non-performing loans. Intesa Sanpaolo -1,9%. Ubi -3,7%. Mediobanca -1%.
The Executive Committee of Bpm bank -1,7% approved a loan of 385 million euro in favor of Vittoria Capital aimed at supporting the company in the public purchase and exchange offer promoted on all the ordinary shares of Vittoria Assicurazioni.
PRYSMIAN -4,3% POSTPONED THE HALF-YEAR REPORT TO SEPTEMBER
Also noteworthy is the thud of Prysmian -4,3%, the worst stock on the list. He moved the publication of first half data to September. In addition, the company released yesterday evening the new medium-term forecasts, those incorporating the acquired General Cables which will be included in the 2018 income statement for a period of 7 months.
Still under fire Salvatore Ferragamo -3,12% after the placement of a stake sold by the parent company financial company. holds Moncler -0,18%.
MONDADORI AND OVS, BOUNCES OUT OF THE CHORUS
Out of the main basket.
Ovs +6%. It closed the first quarter of its fiscal year with revenues up slightly (+2%) to 321 million euros. Net of the write-down of the Swiss investee Sempione, adjusted Ebitda is equal to 30 million euros, slightly better than expected. The leaders promise that Sempione's troubles are over.
Mondadori +6%, in decided contrast to the negative day. Equita raised his opinion after a meeting with the top management.
