Hurray. The decree with which the government secured the two Venetian banks thanks to the intervention of Intesa (“don't talk about gifts – says CEO Carlo Messina – it's completely wrong”) was enthusiastically received by the market. As was foreseeable, both for the contribution of the State, which bears the non-performing loans and the restructuring costs (closure of branches and layoffs), and because finally there is a light at the end of the tunnel of the crisis. Optimism also reigns over Monte Paschi: the procedure for the precautionary recapitalization ended positively, anticipated the deputy general manager of the Bank of Italy, Fabio Panetta. Furthermore, the orderly liquidation relieves the Italian banks of the danger of having to bear, in the event of the bankruptcy of the two Veneto banks, the cost of protecting deposits under 100 thousand euros, estimated at 12-13 billion euros.
But the optimism of the Stock Exchanges still has to deal with the hostility of a non-secondary part of the Eurozone, starting with the German Finance Ministry. “The system is still halfway through,” thus warns the Financial Times. The reasons? The decision not to proceed with the resolution of the two institutions is under examination, judged systemic despite the fact that the two banks represent only 2% of the total (but with a strong concentration in one region). There are also criticisms of the conditions offered to Banca Intesa with respect to Santander, which paid 7 billion for joining Banco Popular (but the same newspaper acknowledges that the Spanish bank is much more solid than Popolare Vicenza and Veneto Banca).
THE DOLLAR RISES AWAITING YELLEN
Markets awaiting central bank guidance. The annual meeting of the ECB in Sintra, Portugal got underway yesterday evening. Euro weak at 1,1186 on the Asian markets in the wake of Mario Draghi's statements confirming the European interest rate policy.
Operators are now waiting for Janet Yellen to speak at the London Royal Academy today. The statements of the Fed members converge on the thesis that inflation is under control and that it is healthy to raise rates again in the short term. John Williams of the San Francisco Fed said yesterday that "the strength of the job market carries with it the risk that the economy will advance too quickly, which could compromise the sustainability of the expansion." The dollar is at a month-long high.
PRESIDENT IN VIEWFINDER, BRAZIL STOCK FLYING
The slowdown in the yen favored the Tokyo stock exchange (+0,3%). The Nikkei index marks the record since August 2015 at 20.318,11. The other Asian markets lack a precise direction: China's stock markets are flat. Up 0,2% Seoul, down 0,2% Mumbai.
The Brazilian Stock Exchange closed up 2,4%. During the night came the news of the request for indictment for President Michel Temer by the Attorney General of Brazil: the accusation is passive corruption. To start the process before the Supreme Court of Brasilia, the vote of two thirds of Parliament is needed. The head of the Prosecutor's Office in Brasilia, Rodrigo Janot, charged Temer on the basis of the complaint received from the slaughterhouse entrepreneur, Joesley Batista.
WEAK TECHNOLOGY IN WALL STREET, TOWARDS THE EU FINE TO GOOGLE
A contrasted session also for the American Stock Exchanges. The increases in the Dow Jones (+0,07%) were counterbalanced by the decline in tech stocks on the Nasdaq (-0,29%). The S&P 500 index closed down -0,03%. The markets see the sharp acceleration in economic growth on which they had bet in the first part of the year increasingly distant. The yield on the 2017-year Treasury Bill fell below the lows of 2,13 to 2,15%, from +2016% on Friday evening: at the end of 2,44 it was XNUMX%.
Both Microsoft and Amazon are down one percentage point. Sales also on Alphabet (-1,42%). Today or tomorrow, anticipates the Financial Times, the Brussels Antitrust should impose a 1 billion euro fine on Google for abuse of its dominant position in the market in relation to the Google Shopping service. Apple-0,3%. Hertz shares fly (+13,5%) after the news that Apple has rented a small fleet of vehicles to test the reliability of its autonomous car driving systems.
OIL, WEAK RECOVERY. EQUITA REDUCES ENI'S TARGET
The attempt to rebound in oil prices has only partially succeeded. Brent crude marks a cautious increase of 0,4%, to 45,83 dollars a barrel, after having touched a maximum of 46,24 dollars. The WTI closed slightly higher at 43,38 dollars a barrel.
“Speculative” long positions are at their lowest level in ten months on concerns about continued inventory growth. Shale oil production should exceed 10,5 million barrels by the end of the year. The increase in production in Libya and Nigeria nullified the effect of the cuts decided in Vienna at the end of May. The Energy sector was weak: Chevron -0,82%, Exxon -0,45%.
Positive stocks in Piazza Affari: Eni up slightly (+0,1%). Equita Sim reduced the target price of the share by 6%, to 16 euro, confirming the buy rating. Analysts have lowered the estimates of earnings per share for 2017-2019 by 14% considering the scenario on oil in 2017. Tenaris unchanged, gains Saipem (+1,1%). Saras is down (-1,6%), another crash for Trevi (-3,5%).
MLANO SUPERSTAR, GERMAN CONFIDENCE RISES
The European stock exchanges marched upwards under the pressure of the Italian banks. But there were other propellants for the rise: the pressure of Daniel Loeb, American hedge manager on Nestlé, and the promotion of Greece by Moody's.
Despite the slowdown in the finale of cars and oil, the pink jersey belongs by far to Milan. The Ftse Mib index (+0,81%) closes by a whisker above 21 thousand (21.002). Rises also for the other markets of the Old Continent. Frankfurt +0,29%: the Ifo business climate index improved beyond economists' expectations to a record level of 115,1 points in June, above the 114,6 points in May and above the 114,4 points expected by analysts. Paris rose by 0,57%. Madrid advances by 0,62%.
London ended the session up 0,31%, at 7.446,80 points. British Prime Minister Theresa May and the leader of the Northern Ireland Unionist party have signed an agreement in which the UK government has agreed to increase spending by £XNUMX billion over two years to ensure support of May's minority ruling Unionist Party.
FLY ZURICH, LOEB PRESSING ON NESTLÉ
Zurich (+0,98%) did best, followed by Nestlé (+4,32%). The hedge fund that Third Point headed by the American Daniel Loeb bought about 1,25% of the Swiss giant, with an investment of 3,5 billion dollars. Loeb encouraged the company to adopt new strategies and suggested the sale of the stake in L'Oréal (+3,85%). Loeb, who met Nestlé CEO Mark Schneider last week, recently invested in Unicredit.
TREASURY AUCTIONS UNDERWAY. NOMURA: BTPs are expensive
Positive closure for the Italian bond market. According to Nomura, the "forced bail out" of the two Veneto banks could be positive in the short term for BTPs, but the difficulties in the Italian banking system remain considerable. "Given the high level of non-performing loans and public debt, combined with the elections scheduled for the first half of 2018, we remain of the opinion that BTPs remain expensive", writes the Bank.
Compared to 166 basis points at Friday night's close, the yield spread finished the session at 165 basis points. Just beyond the lows since January, the Italian 1,892-year rate reached last week, falling to 1,910% from 1,87% on Friday evening, after a low during the day of XNUMX%.
Month-end auctions kick off today. The Treasury will make up to 3,5 billion euros available to investors between the CTZ in May 2019 and the two Btpei in May 2022 and September 2026. With the markets closed, the details of the medium-long term placements scheduled for Friday 30 June will arrive from Via XX Settembre . According to Intesa Sanpaolo's expectations, the Treasury, which will announce the quarterly issuance program in this round, should launch a new 5-year BTP, alongside the reopening of the 8,75-year BTP and Ccteu, for a total issue of XNUMX billion.
The Italy/Spain spread on the ten-year stretch fell to 53 basis points from 55 basis points at the closing. Madrid was weighed down by the announcement of an imminent syndicate issue of a new ten-year bond, for which a syndicate of banks was entrusted.
INTESA LEADS THE RALLY, IN THE SPOTLIGHTS OF BANCA INTERMOBILIARE
In Piazza Affari, the rise of the banks was unanimous. The sector index closed with a rise of 2,7%. Leading the rally was obviously Intesa Sanpaolo (+3,5%). Unicredit rose by 2,2%, Ubi +1,9%, Banco Bpm +3,8%, Mediobanca +2,8%.
The senior bonds of Pop Vicenza and Veneto Banca also held a good rise throughout the day, exceeding 15 points, returning above parity and recording minimum returns since placement.
On the shields Banca Intermobiliare (+14%), subsidiary of Veneto Banca which does not end up under the umbrella of Intesa. CEO Giorgio Girelli says: “We had started working to create a bank that was autonomous and would become a high-end private banking hub. Now let's resume that project that had had a small stop ".
The exception is Carige (-4,4%), which reached new lows at 0,185 euro on fears for the fate of the bank which will have to face a demanding capital increase still to be defined.
ALIBABA'S INTEREST PUSHES YOOX
Not just banks. Spotlight on luxury stocks and in particular on Yoox (+8,7%), after the rumors according to which the Chinese e-commerce giant Alibaba is negotiating the purchase of a significant share of the capital. The company closed the first quarter of 2017 with revenues of 515 million euros, up 15,4% year on year. Organic growth, obtained after adjusting for currency effects, is 19%, slightly stronger than forecasts. Sales in North America, the most important geographical area in terms of contribution to turnover, rose by 21,2% to 161 million euros. Despite the rebound, the stock is still posting an 8% year-to-date loss. Ferragamo rises by 0,9%, Moncler +0,9%.
ENEL BIG COAT IN ROME, UNDER PRESSURE STM
Among the utilities, good growth for Enel (+1%), while Telecom Italia falls (-1,1%). Open Fiber, a company of the Enel group, has reached an agreement with Acea (+0,5%) for the laying of optical fiber in Rome.
The automotive sector is weak: FCA and Exor sell 0,3%, Ferrari 0,25%. Stm under pressure (-2,9%), in line with the weakness of the European technology sector. Leonardo -0,9%, Prysmian -1,2%.
Cnh Industrial did well (+1,46%): Mediobanca Securities raised its target price to 12 euros. Among the small caps, on the last trading day of the rights relating to the capital increase, the Pininfarina stock closed the session with a leap of more than 4% and the right of 27%.
