Wall Street, albeit with difficulty, confirms the opening of credit to Donald Trump, weakened by the crushing defeat suffered on the health care reform. But no one has any more illusions about the timing and methods of the advance of the reforms which until a few days ago seemed just around the corner. Of course, the president can hope for revenge on tax issues, giving way to the reduction of taxes for corporations and households.
But the room for maneuver on the budget is narrow and the conspicuous majority in Congress (235 votes out of 437) is too divided to point to a truly epochal change. After all, the last tax reform dates back to Ronald Reagan, who took 4 years to implement it. It is unlikely that Trump can dream of doing better. In short, the road is uphill. The Stock Exchanges, not just Wall Street, acknowledge that the big party is over for now. And the consequences could be felt soon.
THE FED REVIEWS RAISES. ADVANCING ASIA
Chicago Fed Chairman Charles Evans said last night that if the current situation of uncertainty were to continue all year, it would be appropriate to raise interest rates only once more (not twice) before the end of the year. 2017.
This morning Asia thus reacted to the sharp declines of the last few sessions. The Nikkei index rises again in Tokyo (+1,1%). Hong Kong (+0,6%) and the Korean Stock Exchange (+0,3%) also performed well, both at the center of a delicate political phase. The dollar and oil are also recovering, having already slipped to their lowest levels for 3 and a half months.
DOW JONES, EIGHTH DROP IN A ROW
The rebound began on Monday evening on the US markets, partially correcting the negative performance of the stock markets. However, Wall Street closed in the red: Dow Jones -0,22%, in red for the eighth consecutive day, S&P 500 -0,10% recovering after the initial drop (-0,9%). Only the Nasdaq rose (+0,2%).
The political stalemate in Washington has also made itself felt on bonds: short-term ones are sold and long-term ones are bought. The yield on the three-month bond, one of the most traded and most liquid assets on the market, rose to its highest level since October 2008, the month of the Lehman Brothers crack.
The burst of buys on Snap (+4,8%) supported the technological index. Since Friday, brokers can freely give their indications on the share of the social network. There are at least 12 coverage starts, eight are buy recommendations.
Tesla also did very well: +2,7% (after +3,3% on Friday). Founder and CEO Elon Musk announced that next month the group will begin marketing the new solar roof tiles, a product SolarCity introduced before the company was acquired by Tesla.
CARLOS SLIM CHALLENGES TRUMP ON THE CAR
Carlos Slim, the Mexican billionaire who is also a major shareholder of the New York Times, has launched the challenge to Trump: his Giant Motors has teamed up with the Chinese Jac to start production of cars for the Latin American market in Mexico.
Weak oil prices, held back by fears about the global economy. Brent loses 0,2% to 50,6 dollars a barrel, Wti to 47,8 dollars (-0,6%). In Piazza Affari, Eni fell by 0,1%, Saipem -2%, Tenaris -2,2%.
BREXIT, THE BATTLE OF ENGLAND BEGINS
Europe prepares for the upcoming battle of Britain. Yesterday Theresa May received a resounding no from Scottish premier Nicola Salmond: Edinburgh will ask for a referendum to leave the United Kingdom. Meanwhile, Wolfgang Schaeuble has cooled British hopes on the "understanding" of Berlin, thanks to pressure from the car industry for a soft attitude in favor of import/export from the island. "I have no punitive intent towards London - he said - but it is vital for us to strengthen cohesion among the 27".
MILAN -0,3%, GERMAN CONFIDENCE RISES
The Ftse Mib index closed the first session of the week down by 0,32% at 20.124 points. Falls of 0,1% for the Paris and Madrid Stock Exchanges, Frankfurt -0,5%, In Europe the Stoxx 600 index marks -0,43%. On the European stock exchanges, the stocks that fell the most are those related to raw materials (Stoxx of the sector -3,3%). In London, the mining giant Antofagasta lost 4,7%. Glencore, the world's largest commodity trading firm, fell 4,5%. Rio Tinto -3,8%.
On the macroeconomic front, good news has arrived: in Germany the Ifo stood at 112,3 points in March, the highest since July 2011. The figure beat the consensus of economists, who expected a reading unchanged compared to the previous month share 111.
TREASURY AUCTIONS UNDERWAY. THURSDAY 9 BILLION BTP OFFERED
Pretty colorless session for the debt market. Many price and yield fluctuations, insiders warn, must be related to the position adjustments that precede the end of the month and quarter. In the short term, however, the Italian paper managed to maintain its positions on Germany, with the spread between 200-year bonds returning to just below 0,36 basis points, despite the size of the forthcoming offers. The yield on the 0,40-year Bund fell mid-day to 2,19%, before recovering at the close to 2,21%, the same level as on Friday. Btp to XNUMX% from XNUMX% on Friday.
The end-of-the-month auctions for the Italian Treasury begin today, with the seventh tranche of the Ctz 28 December 2018 available to investors for an amount between 2 and 2,5 billion euros. At the end of closing on the secondary, the stock trades at a yield of 0,005%, to be compared with 0,029% at the end of February. Tomorrow will be the turn of the six-monthly Bot, offered for 6,5 billion (against 6,6 billion expiring).
On the occasion of the medium and long-term offer on Thursday 30 March, the Ministry of the Economy will make available to investors between 6,75 and 9 billion euros of five-, ten- and 50-year BTPs, the November 2020 bond will not pending issuance and the CcTeu February 2024.
During the second quarter, the Treasury will launch a new 3-year BTP, a new 7-year Ccteu and a new Ctz. This is what Via XX Settembre announced with the publication of the quarterly issuance programme: The new 3-year BTP will expire in June 2020 and the amount of the entire issue that will arrive on the market will total at least 9 billion euros. The same minimum amount for the new Ccteu (expiring in October 2024) and for the new Ctz (May 2019).
NOUY (ECB): YES TO THE MERGER OF THE VENETIAN BANKS
The European authorities will soon make a decision on MPS's public bailout plan and are already working on a similar dossier for Pop Vicenza and Veneto Banca. This was assured by the president of the European Supervision of the ECB, Daniele Nouy, explaining that, with regard to the plan, the issue of the institution's solvency represents the starting point and is an issue that has already been resolved. Asked if the Sienese bank was solvent three months after applying to the Italian state for the precautionary recapitalisation, Nouy replied: “Yes, otherwise we would not be discussing the precautionary recapitalisation. We are in the final stages of the talks with the Commission".
Nouy then stated that a merger between Popolare Vicenza and Veneto Banca could be the solution for the restructuring plan. Meanwhile, the ECB has already begun to provide information to the EU Commission on the request for precautionary recapitalization made by the two Venetian institutions. Asked whether the talks could involve the merger between the two banks, Nouy replied: "It is the European Commission that leads on the restructuring plan."
Today is the last day of the relief offer aimed at the shareholders of Banca Popolare di Vicenza and Veneto Banca who have suffered heavy losses. Exceeding the minimum threshold set by the two credit institutions is the first step in the security plan which provides for the precautionary recapitalization to be paid by the State.
Meanwhile, the banks experienced a day of declines: the sector fell by 0,74%. Unicredit lost 1,1%, Intesa -0,2%. Today the Board will examine a plan to reduce non-performing loans (Npl) by 15 billion euros by 2019. Banco Bpm -1,5%. Significant losses also for Bper Banca (-1,6%) and Mediobanca (-1%).
Banca Ifis slightly retreats from the area of historical highs, losing 0,50%% to 35,92 euro. The Veneto-based institution specializing in factoring has concluded two agreements for the purchase of two portfolios of non-performing loans. The total gross value of the transactions is 573 million euros.
Money on Mediolanum (+1,05%): Citigroup has raised its target price from 7,7 to 8 euros, with a buy rating. Analysts appreciated the words of management during the conference call.
INDUSTRY, ONLY FERRARI GOES OUT
Among the industrialists, only Ferrari was purchased (+2,87% at 68 euros), which celebrated Sebastian Vettel's victory in Melbourne in the first Formula 1 Grand Prix of the season.
Fiat Chrysler slows down (-0,6%). Down Prysmian (-1,7%). In red Stm (-2,91%) . Equita Sim signaled that the recent strengthening of the euro against the dollar, if it were to continue, would be negative for the group. The stocks most linked to the US economy are down: construction-related companies such as Buzzi (-3,2%) and Cnh Industrial (-2,7%) are heavy.
UTIITIES RAISE THEIR HEADS. BROKER REWARDS TELECOM
The easing of tensions on the interest rate front favors a reduction in yields and indirectly the accounts of utilities and telecommunications. Terna recorded the highest price since last October at 4,5980 euros. Since the beginning of the year, the performance has improved to +5,5%. Investors also appreciate the yield on the stock which at current stock prices fluctuates around 4,5%. Enel (+0,5%) and Snam (+0,9%) also performed well.
In light of Telecom Italia (+1,68%), on which Macquarie raised the target price from 1,05 to 1,10 euro, confirming the outperform recommendation. Kepler Cheuvreux (buy, Tp1,05 euros) then said he appreciated the group's plan to accelerate fiber coverage.
AUTOGRILL WINS NEW ORLEANS. FLY TERNI ENERGY
We note Autogrill +0,72% to 9,145 euros. The subsidiary HMSHost has been awarded a new ten-year contract for the management of the food&beverage spaces at the New Orleans airport. Cumulative sales are expected to be $250 million. The CEO Tondato has ruled out a spin-off of HMSHost for now and has confirmed a revenue growth rate of 5-7%. Citigroup raised its target price to 10,5 euros, confirming the buy recommendation. Analysts still see room for an upside for the stock on the stock market.
Luxottica -0,58%. The governance of Essilor-Luxottica takes shape, equal for about three years from the formation of the group. Subsequently, the members of the board of directors will be chosen regardless of origin. The first board of directors will therefore be made up of eight members of Delfin (holding of the Del Vecchio family, which owns the brand)-Luxottica and eight appointed by Essilor.
Ferragamo (-1,5%) and Moncler (-1,4%) fell back. Among the mid and small caps Terni Energia shines (+11%). Thud of Il Sole24 Ore (-8,9%) after the recent very strong increases.
