"I am very confident and very optimistic: it's not a +0,1/-0,1% that makes the difference". This is how Matteo Renzi reacted yesterday evening after the surprise drop in GDP in the first quarter (-0,1% against a forecast of +0,2%) which triggered the first real black day for Italian finance since the birth of the government, a landslide that marked the end of the honeymoon between the Florentine premier and international investors who have bet on the rapid effect of a shock therapy for the Italian economy that is not seen for now.
In Piazza Affari, the FtseMib index fell by 3,6% and the performance since the beginning of the year drops drastically to +7,5%, which for the moment does not affect the primacy among the European stock exchange lists. Together with Milan, the Madrid Stock Exchange also fell (-2,3%).
BTPs UNDER FIRE, SPREAD UP TO 184 BPS
Equally if not more dramatic was the plunge in government bonds: the 10-year BTP yield rose to 3,09% from 2,91% the day before. Investors rushed from Italian and Spanish bonds to buy German Bunds, whose yield fell to 1,30%, from 1,369.
The Btp/Bund spread widened by 24 points and jumps to 178 after having climbed up to 184 points during a frantic session.
Despite a better performance than Madrid's GDP (+0,4%), sales also fell on Spanish bonds, with the spread on the ten-year Bund at 172 basis points, and the ten-year down by more than one point and half.
The verdict is clear: yesterday the honeymoon between the Florentine prime minister and international investors ended, who bet on the rapid effect of a shock therapy for the Italian economy which is not seen for now.
On the contrary, the gap with respect to the German locomotive widens: Germany rises by 0,8% (against a forecast of +0,7%), France is unchanged (against a forecast of +0,1%).
However, it was also a day of declines for the other European lists: London -0,5%, Paris -1,2%, Frankfurt -1%.
WARREN BUFFETT SHOPPING, DB SELLS CASINOS IN LAS VEGAS
The negative picture was completed this morning by the drop in the Tokyo Stock Exchange (-1,6%), conditioned by the rise in the yen. The index of the Asian Stock Exchanges was also down (-0,4%), even if the weekly balance records a rise of 2%.
Bad day also for Wall Street. The Dow Jones index lost 1,01%, the S&P500 0,95% and the Nasdaq 0,7%.
In addition to the news coming from Europe, the figure below the estimates on industrial production, the drop in builders' confidence to its lowest level in 12 months, and some worse-than-expected quarterly reports weighed on the market, including that of Wal-Mart ( -2%). Warren Buffett has increased his stake in the large-scale retail giant and in Verizon.
Meanwhile, the (unfortunate) adventure as croupier of Deutsche Bank comes to an end: Blackstone has bought his Las Vegas casino for 1,7 billion dollars, a legacy of the subprime season.
The T bond is also under pressure, in the wake of the later denied rumors of a retroactive tax on foreign holders of Greek bonds.
BANKS AND RUN IN DEEP RED
It was mainly the banks that felt the pinch. The good results of the quarter did not avoid the collapse of Intesa (-6,2%). Net income amounted to 503 million euros, +64,4% compared to a year ago, on revenues of 4,108 billion.
Heavy, without exception, also the other institutions: Unicredit -5,6%, Monte Paschi -6,4%, Ubi -7,7%, Banco Popolare -5,8%, Pop.Milano -6,8%.
The landslide did not spare the asset management sector: Mediolanum lost 7%, Azimut 4,75%. Banca Generali was also in the red, -4,93%.
RESISTS GENERAL. TODAY TEST FOR UNIPOL AFTER THE ACCOUNTS
The Lion of Trieste defended himself best of all in the main basket. On the day of the results, Generali closed with a modest decrease of 0,8%. In the first quarter of 2014, the company recorded a net profit of 660 million euros, up 9,4% on the same period last year. Operating profit increased by 0,5% to 1,296 billion. Premiums exceeded 18 billion (+1,5%), of which 12 billion in Life (+2,4%) and 6,4 billion in Non-Life (stable).
UnipolSai -2%. After the close of the market, the accounts for the first quarter ended with a net profit of 132 million euro, up 5,7% from 125 million in the same period of 2013, despite the 21 million charges resulting from the increase in the substitute tax on the revaluation of Banca d'Italia shares.
THE BLACK JERSEY IS UP TO MEDIASET
None of the blue chips finished positive. The worst decline fell to Mediaset, which fell by 8,5%. It is the eighth drop in the last nine sessions. From the highs of the year at the beginning of April, the media stock lost a quarter of its value This morning Deutsche Bank reiterated the Buy judgment, cutting the target price to 4,7 euros from the previous 5 euros. More pessimistic is SocGen which yesterday confirmed the Sell with a target price reduced to 3,10 euros from 3 euros.
Telecom Italia fell by 4%. Enel -3,8%: off to a good start, the electricity share adjusted to the general decline. In a research dedicated to the European utility sector JP Morgan confirmed the Overweight opinion on Gdf Suez and Enel. Neutral recommendation instead for Eon and Rwe.
Things went better for Eni -1,8%: CAE's hold on Zei Zmape, the stock with the highest capitalization, avoided an even worse landslide on the Ftse Mib index.
Fiat continues to fall -3,6%. Yesterday morning Citigroup confirmed the Sell recommendation, reducing the target price to 6,6 euro from the previous 6,9 euro. Cnh Industrial -1,53%, Exor -3,66%.
Pirelli loses 3,2%. Finmeccanica ushers in the Moretti era, appointed after the shareholders' meeting, with a drop of 4%. Even the extraordinary shareholders' meeting of Finmeccanica, as Eni's had already done last week, rejected the introduction in the statute of the new requirements of honourability and ineligibility of members of the board of directors. StM -4,1%.
ONLY INTERPUMP, PARMALAT AND IMPREGILO ARE SAVED
Interpump stands out with the plus sign (+2,6%), promoted by Mediobanca to Outperform from Neutral. With a target price of 11 euros (from 10,4). Equita has raised the rating from hold to buy and the target price from 10,8 to 11,2 euros, Positive reports on the Emilia-based group have also been published by Kepler Cheuvreux (buy, target price of 12,3 euros), and Hammer Partners (buy, target price of 13 euros).
Parmalat also rose (+1,13%), thanks to the boost from the quarterly and Salini Impregilo (+2,05%). Vertical fall for Tiscali (-16%). Male Cementir (-9%) and Saras (-8,4%).
