The central banks have stopped denying the evidence and have opened up, alongside the front of growth to be stimulated, also the front ofinflation to contain. This is, in a nutshell, the result of the meetings which, between Wednesday and Thursday, updated the strategy of the lords of money. And the stock exchanges are adapting to the new framework: the technological ones are losing ground, more sensitive to the cost of money. Stocks that will have to defend the recovery from the risks of inflation are better.
FOR THE TECH THE WORST SESSION AFTER SUMMER
- The Nasdaq -2,47% thus experienced its worst session since September yesterday. Flat the Dow Jones -0,08% and the S&P 500 of 0,87%.
- The big names in technology are down sharply, while the finance sector rises by 1,2%. Banks, consumer-related companies and names believed to be safe from inflation are also advancing. Telephony stands out, with Verizon up 4%.
- Who shouldn't fear the price increase is The Boss, Bruce Springsteen, who yesterday sold the rights to his catalog for 500 million dollars to Sony.
THE YIELD OF LONG-TERM SECURITIES RISES
- The interest rate curve is registering the new monetary regime, the spread between the yield of the 5-year US government and the 30-year yield rose by seven basis points yesterday, reaching the highs of the last two weeks at 67 basis points.
- The Euro Dollar, which moved little this morning, lost 0,5% yesterday.
ASIAN PRICE LISTS IN RED
Almost all stock markets in Asia are down.
Nikkei -1,6%. Hang Seng of Hong Kong -1,3%, CSI 300 of Shanghai and Shenzen lists -1,3%. BSE Sensex of Mumbai -1%. On par, the Kospi of Seoul and the S&P ASX200 of Sydney.
Hang Seng Tech is down 2,5%: Alibaba -3%, Meituan -5%. Worst name in this basket Trip.com Group, a travel services provider based in Shanghai: the stock lost 10% even as data for the quarter beat estimates. However, analysts have lowered their estimates for next year, to take into account the drop in demand caused by the new wave of pandemic in Asia.
The provisional weekly balance is positive only for the Japanese stock market: +0,7%. Hong Kong -3,4%. Mumbai -2,4%. CIS 300 -0,7%.
MINUS SIGN TODAY FOR THE FUTURE
Market sentiment did not change much during the night: Nasdaq futures lost 0,3% this morning. Dow Jones Futures -0,2%.
THE WORD TO THE CENTRAL BANKS
- THE ECB DOES NOT TOUCH RATES
The ECB has not reserved any surprises for the markets. The central bank has left the main interest rate at zero, the deposit rate is confirmed at -0,50%, the marginal lending rate at 0,25%.
The press release states that:
- the emergency debt purchase program will end at the end of March. The accumulation plan for the first quarter of 2022 will be "at a lower rate than in the previous quarter".
- Change the time horizon within which the capital of the securities purchased under the pandemic Pepp program will be reinvested once they reach maturity. The lender "now intends to reinvest the capital until at least the end of 2024". The ECB warns that the plan can be reactivated after March if necessary.
- Overall, the release is less soft than expected because the reduction in purchases already starts at the beginning of 2022. And the increase in the App program to reduce the impact of the end of the PEPP is less than expected: not 40 billion a month until September but 40 until June and 30 until September.
- In summary, a compromise in which it emerges, to quote Christine Lagarde, that "it is very unlikely that we will raise interest rates in 2022 but we will have to be very careful what the data will tell us". A formula that does not satisfy the central banks of Austria, Belgium and Germany who would have voted against the ECB's decision to continue with the purchases of government bonds, since the reinvestment horizon would be too long.
2. BANK OF ENGLAND RAISE FIRST
Bank of England has decided to surprise City again. At the end of October he had not raised rates, catching the market off guard. This time it did the reverse, raising the main interest rate to 0,25%. The British central bank thus becomes the first of the most important institutions in the world to raise the cost of money since the beginning of the pandemic. Within the board, the exponents expressed themselves 8-1 to raise rates to 0,25% from 0,1%. The same officials voted 9-0 to keep the BoE's government bond purchase program at £875bn.
3. NORWAY, KING OF THE HAWKS, BERN IS NOT MOVING
Among the other central banks on the move yesterday (17 in all) it is worth noting the increase in Norges Bank (a quarter of a point) accompanied by the announcement that others will follow from March.
The Swiss National Bank has left everything unchanged, reserving the right to intervene on the overvaluation of the franc.
4. Türkiye: LIRA COLLAPSES, ERDOGAN RAISES WAGES
The Central Bank, in line with President Recep Tayyip Erdogan's wishes, cut interest rates by 100 basis points to 14%, ie 7 percentage points below current inflation, which rose to over 21% in the last month. The purchasing power of the local currency has more than halved during 2021. The president has reacted by increasing the average wage of workers by 50% in lire, equal to -27% in dollars compared to January.
5. MEXICO, RECORD INCREASE +0,5%, HIGHEST SINCE 2001
There were other surprises: the Mexican central bank chose to increase rates more than expected by half a point to deal with inflation which had jumped to 7,7%. A move that precedes the arrival of the new governor: from next month a woman, Victoria Rodriguez Ceja, will take over the leadership of the central bank for the first time.
THE SPREAD RISES, BTP ONE STEP FROM 1%
The Italian paper came under pressure after the choices in Frankfurt, only to recover slightly.
A note from Pictet Asset Management edited by Fabio Castaldi underlines that the strengthening of 'Qe' purchases to accompany the end of the 'Pepp' is lower than expected and that Frankfurt has not made any mention of flexibility in the application of the 'capital key' coefficient, which has so far made it possible to modulate the distribution of purchases while avoiding distortions on the fixed income market. “It is understandable that the market wants to price, in this context, less support on government bonds of the euro area and, in particular, a higher risk premium on Italian government bonds also in consideration of the uncertainties and risks associated with the elections presidential elections at the beginning of 2022”, observes the manager.
At closing, the spread between Italian and German ten-year bonds was 132 basis points (+2,85%). The BTP goes to +0,97% and the Bund to -0,35%.
RISING PRICE LISTS, MILAN +0,44%
Among the stock lists, Piazza Affari is the most timid, +0,44%, 26.782 points. Frankfurt +1%, Paris +1,12%, Amsterdam +0,8%, Madrid +1,25%, London +1,29% are appreciated with greater conviction.
THE BUYBACK OF NOVARTIS HAS BEEN STARTED, TWO BIG SHOTS FOR AIRBUS
In great evidence in Zurich Novartis +5,73% after the start of the buyback of treasury shares up to 15 billion dollars to be completed by the end of 2023. Airbus rises +3,2% after the Australian Qantas Airways has chosen the manufacturer French in place of Boeing as the preferred supplier to replace the national fleet. The European manufacturer was also awarded an order from Air France-KLM for 100 aircraft destined for the fleets of the KLM and Transavia companies, with an option for another 60 aircraft.
On the other hand, EDF collapsed -14% which reduced its core profit target for this year after having identified leaks in a nuclear power plant and having closed another plant using the same type of reactor. Online fashion retailer Boohoo drops 16,3% after launching a profit warning, the second in four months.
EXOR HAS SOLD PARTNER.RE, STELLANTIS IS RUNNING
Yesterday evening with the stock market closed, Exor announced the sale of Partner Re to the French company Covea for 7,8 billion euros (closing in mid-2022). The two parent companies, states a press release, will continue the collaboration. It is therefore likely that the Agnelli rally will continue today in Piazza Affari: yesterday Stellantis rose by 3,3% in line with the sector, but also because the European Court of Justice rejected the request to pay Luxembourg back taxes from Fiat Chrysler for 30 million euros. Cnh +4,4% does even better. Among the positive industrialists also Leonardo +1,1% and Pirelli +0,3%.
TELECOM ITALIA, FINAL DUEL WITH GUBITOSI. KKR INSISTS
New day of passion for Telecom Italia -0,93% to 0,44 euro after a decline of more than 2%. Weighs the third profit warning in a year announced Thursday evening. The auditing of the accounts makes the position of Luigi Gubitosi more critical, who a few days ago returned his powers but remains a director. The board today will have to examine the risks associated with the contract with Dazn and how to proceed with Kkr's expression of interest. Wednesday evening Tim it cut the 2021 estimates for domestic fixed telephony, which should record revenues down between 6 and 7% and a gross margin net of extraordinary components down between 13 and 15%. Meanwhile, from New York, KKR reiterates that it is ready to put almost 40 billion on the table, out of the approximately 10 in the purchase offer and 30 for subsequent development investments.
BPER/CARIGE DEFLATES, SALES ON UNICREDIT
Among the banks Realizations hit Bper - 4,3%: the board of the Interbank Deposit Protection Fund gave a negative opinion on the non-binding offer presented for the purchase of an 88,3% stake in Banca Carige for the symbolic amount of 1 euro for a 1 billion dowry. Bpm also down -1,9%.
Intesa Sanpaolo is doing better +1,5% while Unicredit -0,5% loses share in the afternoon despite the target price increases after the recent presentation of the industrial plan: Berenberg raised the target price on the stock to 17 from 12,1 euros, confirming the buy recommendation. Positive Generali +0,8%, in the aftermath of a strategic plan that was liked by analysts but did not warm up the market.
DIASORIN, TODAY THE INVESTOR DAY AFTER THE LUMJINEX DEAL
Weak Diasorin on the eve of today's Investor day in which the new strategic plan elaborated after the acquisition of Luminex will be illustrated. "Over the last two years - said the CEO Carlo Rosa - the pandemic has redefined the role of diagnostics in public health management and has posed new challenges for national health systems to which DiaSorin intends to respond by strengthening its position as Specialist
OIL RISE HEAVY LUXURY
The appreciation of oil pushes the energy sector: Eni +2%, Tenaris +3,2%. Luxury slips due to fears related to tourist flows. Heavy Moncler -2,4% Ferragamo, Tod's. Cucinelli resists after the rush triggered by the recent, further increase in the guidance on 2021 revenues.
JUVENTUS INCREASE, 8,25% NOT SUBSCRIBED 8,25%
Juventus -3,45% on the closing day of the capital increase. 91,75% is subscribed, for a total amount of approximately 366,9 million euro at the end of the option period. The unexercised option rights will be offered on the Stock Exchange starting from 20 December 2021.
