Netflix's abrupt slowdown interrupted the rally in US price lists last night. The streaming giant, for the first time, had to report a drop in subscribers (200 fewer) largely linked to the interruption of services in Russia. But Netflix itself has admitted that the decline could continue in the coming months, thanks to competition and the end of the closure imposed by Covid. The news, released after the Stock Exchange, caused a real storm: the stock lost 22 percent, or more than 30 billion dollars.
Record quarterly results in the USA
The beating of one of the symbolic stocks of the Nasdaq rally does not shake much, however, the surprise optimism that has invested the US market, despite the ever stronger winds of war in Ukraine and the alarm of the Monetary Fund on growth. The reason probably lies in the brilliant results arriving from the quarterly reports: 79,4% of the companies that gave the numbers (yesterday, among others, Johnson & Johnson and Ibm) beat their estimates. In other words, the increase in interest rates anticipated by the interventions of the Fed bankers is not favoring the recession: on the contrary, it can give new life to the financial sector.
Hence the rise in stock markets accompanied, surprisingly, by a new boom in yields: tonight the t Bond exceeded the 3 per cent threshold, supporting the dollar boom, at its highest level against the yen for more than twenty years. As a result of the sales of recent months, negative bonds in the world have fallen to 2.700 billion dollars, they had reached 18.000 billion last year. The indications coming from the USA are reflected this morning on the other markets, grappling with sanctions on energy (Europe) and the fight against Covid (China).
Shanghai reopens its doors, oil improves
Contrast the Asia Pacific stock exchanges. Tokyo's Nikkei is up by 0,7% and the yen falls back after having touched the lows of the last twenty years against the dollar: the cross is down by 0,5% after thirteen consecutive sessions. Hong Kong's Hang Seng +0,8%. Chinese techs are positive.
The Chinese yuan also weakened against the dollar, slipping to a six-month low. The CSI 300 index of the Shanghai and Shenzen lists was weak (-0,4%). In Shanghai, another four million people were allowed to leave their homes. Other factories have reopened following the easing of contagion rules.
The news favored the rebound of oil, yesterday -5% this morning recovering to 103,5 dollars a barrel in the WTI version.
European stock exchanges should open positively. EuroStoxx 50 index future: +0,5%.
In the USA the best session of the month
On Wall Street last night, the S&P 500 closed up 1,6%, its best session since March 16th. Better the Nasdaq (+2,1%). Dow Jones +1,45%.
The 2,93-year Treasury Notes traded at 2,84% this morning, up from XNUMX% yesterday. In the United States, the real rate on ten-year maturities is no longer negative, after two years below zero.
IMF: Ukraine plus covid, worse than an earthquake
Inflation on the rise (+5,3% for the Eurozone), slowing growth (only 3,6%, -0,8% compared to the January forecasts). The Monetary Fund thus estimates, for now, the effect of the scourges that have hit the world economy in recent months, starting with the war in Ukraine and the effect of the sanctions. Without neglecting, however, the shutdown of activities in China to eradicate Covid. Above all, the Eurozone is paying a high price (+2,8% GDP, -1,1% compared to January), the USA will allow itself a modest decline (-0,3%, from +4 to 3,7%) needed to bring inflation under control.
But for everyone, writes the new chief economist Pierre Olivier Gourinchas, the danger lies "in underestimating the seismic waves which, like an earthquake, are affecting raw materials, trade and financial flows". The fight against inflation will require rigour, but a too rapid rise in interest rates, warns the economist, risks upsetting the balance of a fragile and heavily indebted world.
The world takes refuge in the dollar
The suggestion, at least for now, has not been picked up by the markets. The race for yields on T bonds continues, on the wave of good data from the US economy (new construction has risen to its highest level since 2006). St. Louis Fed chairman James Bullard said he could not rule out a rate hike of more than 50 basis points. The dollar picks up speed, at two-year highs against the euro (and for twenty against the yen) the European stock exchanges, weak since the opening, are recovering some positions, awaiting decisions on sanctions against Russia.
T-Bond over 3%, runs the Bund. Spreads at 163
Bullard's words electrified the government bond market. The 2,89-year Treasury Note trades at 3%, +3 basis points. But last night, for the first time, the yield exceeded 0,91%. German paper is also picking up speed, with the 10-year rate rising to +2,55%. This favors the decrease of the spread with the 163-year BTP (+1,04% yield at today's closing). The differential stops at XNUMX basis points, down by XNUMX%.
The coupon detachment slows down Milan: -0,96%
In the afternoon, the Eurostoxx index (-0,1%) recovered almost all the losses accumulated in the morning. Piazza Affari -0,96%, at 24.624 points, remains the weakest Stock Exchange. At least in appearance, because the data is influenced by the detachment of the coupons by eight blue chips which weighed on the index by one percentage point.
The expensive energy cost Italy 1,5 of the GDP
The International Monetary Fund has also revised downwards its forecasts for Italian GDP in 2022, from 3,8% three months ago to 2,3%; the growth forecast for 2023 has been revised from 2,2% to 1,7%. Weighing on Italian growth are the war in Ukraine and the sanctions against Russia, which have caused an increase in energy costs, given Italy's dependence on energy imports from Russia.
Le Pen effect on Paris: -0,83%
Paris retreats (-0,83%) in view of Sunday's electoral run-off between Macron and Le Pen. Hermès (-3,62%) and L'Oréal (-2,9%) fell sharply on the eve of the accounts.
Frankfurt (-0,07%) and Madrid (-0,4%) are flat, Amsterdam (-0,43%) and London (-0,16%) are down.
Dividends hold back Stellantis, Saipem runs
Stocks that detached the dividend end up at the bottom of the rankings on Piazza Affari. Including Stellantis (-5,2%), which also announced yesterday the closure of its only factory in Russia, operated jointly with Mitsubishi (also exiting). In strong, apparent decline, also Banca Mediolanum (-5,6%), Banco Bpm (-4,8%), Unicredit (-3,3%) and Prysmian (-2,2%). Campari (-0,9%) and Ferrari (-0,6%) were more stable. Cnh Industrial even closes with a modest +0,1%.
Net of coupons, the best stock was Saipem (+3,8%), followed by Iveco (+2,92%) and Pirelli (+1,36%).
Autogrill +12,3% in view of the merger with Dufry
Outside the main basket, Autogrill runs (+12,3%). Bloomberg reports that negotiations are underway with the Swiss Dufry, the duty free giant which should buy the Italian company, paying in paper. Edizione, the Benetton holding that controls Autogrill, should also be the first shareholder in the post-merger subject.
