Oil falls, stock markets fall, held back by the trend of the real economy. After the collapse of Wall Street in the last two hours of Friday's session (two points burned by the S&P index, which closed at -1,25%, reversing the previous trend) the script was repeated this morning in Asia. Tokyo closed for holidays, the Chinese stock exchanges are starting to close in the red -1,1%, Sydney and South Korea -0,6%. Hong King also falls -0,7%.
The markets did not react to the leap in Chinese exports (+15,3% in September) and imports (+9%). Behind the sensational number, according to analysts, there are above all speculations on the trend of the renmimbi against the dollar. The yen rises (+0,7% against the dollar), crude oil falls: Brent is worth 88,6 dollars a barrel (-1,7% compared to Friday).
EBOLA EFFECT ON PRICE LISTS. FED IN ALARM
The psychological effect of the death of a nurse in Dallas, the first case of Ebola infection on American territory, also weighs on today's opening. Fed vice president Stanley Fisher said that the evolution of the market situation could push the Fed to review the timing of the strategy for returning monetary policy to normal.
The support of the US central bank, combined with the ECB's expansive strategy, thus acts as a barrier to market levels. "A 10% correction would be the healthiest thing, but it seems unlikely to me - said Mary Erdoes, JP Morgan's equity manager yesterday - The market will retreat by 2-3% and then it will be submerged by a rain of cheap cash". That is, the Fed's parachute is still the dominant element of the market.
MILAN DOWN FIVE SEATS. AND FOR FIVE WEEKS
Despite changes in the order of hundreds of points, however, the S&P 500 index closed the week down by 3,1%, but remains in positive ground since the beginning of the year. Europe did not fare better during the week: the Stoxx 600 index lost 4,1%, archiving the worst week since 2012. The Milan Stock Exchange closed the fifth consecutive week of declines, a week characterized by all five sessions down: from 4 September to today, the FtseMib has fallen by 10%.
The balance of the week for the FtseMib marks -4,9% : the performance since the beginning of the year decreases to +1,2%. The Milanese index lost 0,9% on Friday and is one of the most resistant in the European panorama, compared with the Dax of Frankfurt down by 2,4%, with the Cac of Paris down by 1,6% and with London's Ftse100 falling by 1,2%.
THE ZEW, INDEX OF GERMAN CONFIDENCE, UNDER EXAMINATION
Moody's has postponed the rating on Italy pending the financial law soon to be examined by Brussels. However, the Renzi government guaranteed its presence in Serie A thanks to the confirmation of the "A low" (negative out look) of the Canadian agency Drbs. The Italian government's decision to postpone the achievement of structural budget balance to 2017 is seen as an exceptional measure and as such "absolutely acceptable". Meanwhile, S&P has revised downwards the outlook of France and removed the triple A from Finland.
The calendar foresees a series of "mines" hidden in the rugged terrain leading up to the key events of the month: the outcome of the examinations of the European banks (ballots on Sunday 26 October) and the penultimate meeting of the Fed in 2014 (28-29 October). Spotlights turned on Tuesday on the Zew, the German confidence index, down since last December.
CHIPS, OIL, TRAVEL: BLACK WEEK
It has been a black week for many sectors. Semiconductor stocks fell after the profit warning of the American Microchip, a major microcontroller maker, which announced a sharp slowdown in sales in China in September. StM fell 5,49% on Friday, Germany's Infineon lost 6,8%, Wall Street's Texas Instruments fell 7%, Intel -4%.
Raw materials are in free fall: crude oil prices are down by 19% compared to the end of June. Throughout Europe, it is above all oil stocks that are dragging down price lists, penalized by the decline in crude oil: Eni -2,2%, Saipem -2,8%, Tenaris -1,4%. In Paris, Total loses 3,6%. On Wall Street, Exxon has recorded a drop of 9,2% on Wall Street since the beginning of the year.
The Travel & Leisure sector is also under fire, under the pressure of the Ebola effect: in the last 5 sessions, Autogrill's stock has lost 15% of its value, bringing the year-to-date performance to -16%. Even more serious was the loss of Wdf which dropped by about 3% in one week. Fidelity funds took advantage of the landslide to double their stake from 25 to 5%.
TODAY THE NEW BENCHMARK AT 3 YEARS LAUNCHES
The bond markets are preparing for the month-end appointments. From 20 to 23 the Treasury will appeal to savers for the seventh issue of the BTP Italia. So far, securities (over six years) linked to Italian inflation have collected 88,7 billion. The goal is to exceed 100 billion.
Meanwhile, a few days before the Fed meeting (October 28 -29) and the end of the American QE, T-bonds are down, from 3% at the beginning of the year to 2,3%: the markets do not believe in rate hikes. In this context, after the favorable outcome of the 12 BTP auction (slight increase in yields of 3 bp, strong growth in demand) the Treasury is launching today between 1,5-2 billion 3-year BTPs. issue of 30-year securities, maturing in September 2044 for an amount between 750 million and 1,25 billion euros. Finally, government bonds with a six-month maturity (2 billion euros) will be offered.
But attention is focused on the new three-year benchmark BTP: one of the three new benchmarks (in addition to the CcTeu and the 5-year BTP) that the Treasury plans to issue in the fourth quarter of 2014. Expectations are for a good reception from part of the market combined with a significant rise in yields. On Friday, on the gray market, the new three-year BTP fluctuated at yield levels around 0,73% against the 0,52% recorded in last September's auction (historic low).
FIAT, AT 15 PM THE CARAVELLA ARRIVES IN WALL STREET
FCA's first time on Wall Street it will be necessary to wait for 15 pm. Exceptionally, exchanges on FCA will also start in the afternoon in Piazza Affari. In the evening, the top management of the Lingotto will ring the bell which will signal the closure of the Columbus Day session. The landing will take place in troubled waters given the mood of the market. On Friday, Fiat took its leave of the Milan Stock Exchange with a sharp fall of 30%, in line with the difficulty of the automotive sector. The German giants Volkswagen -2,1%, and BMW -2,9% paid the highest price.
After the debut on the American stock exchange of FCA, which includes 100% of Fiat Group Automobiles and Chrysler Group, but also 90% of Ferrari, Sergio Marchionne and CFO Richard Palmer will start talks to place around 8% of the shares (part resulting from the withdrawal, part already in the portfolio) in order to increase the free float. We start with a market capitalization of less than 10 billion, against around 40 from Ford and GM, the abundant 50 from BMW and 60 from Daimler.
LUXOTTICA SAGA: DEL VECCHIO LOSES CAVATORTA. TODAY THE BOD
The world leader in eyewear loses its second ad in less than two months. Co-administrator Enrico Cavatorta resigned on Sunday after a three-hour conversation with founder Leonardo Del Vecchio. Cavatorta has also already sold the securities linked to his stock options (collection of over 22 million). An extraordinary board meeting of the company will be held today. The matter of contention is the tormented governance of the group, conditioned by family disagreements.
Del Vecchio's last wife, Nicoletta Zampillo, has in fact asked for 25% of the shares in the family safe (today distributed equally among the heirs resulting from the entrepreneur's three marriages) plus a seat on the board of directors for her son Leonardo Maria ( 21 years old) in place of his eldest son Claudio (57 years old, owner of Brooks Brothers) as well as a leading role for his accountant Francesco Milleri.
Today, barring surprises (always possible in a climate of family saga) there could be the clarification that the markets are waiting for.
MEDIOLANUM RETURNS THE ATTENTION ON MEDIASET-TELECOM
In the spotlight Mediolanum, down on Friday - 3% after the news that Fininvest, which owns 31%, will have to reduce its stake to less than 9,9% as required by Bank of Italy rules because Silvio Berlusconi does not have the good repute requirements for being the controlling shareholder of a bank. Ennio Doris, a shareholder with the same stake in Fininvest, said he was ready to buy up to 10%. Silvio Berlusconi's heirs could acquire shares personally or concentrate on other investments. But the fate of the 20% that Fininvest will have to sell could be intertwined with the maneuvers on Mediaset +1%. Despite the denials coming from Giuseppe Recchi, Telecom Italia - 0,5%, the rumors about a possible entry of Telecom (with the blessing of Vincent Bolloré, the next major shareholder) into Mediaset Premium are becoming insistent.
IPO, THE FEDRIGONI PAPER MILLS TRY
The market climate is not favorable for new quotations, as evidenced by the withdrawal of offers by Italiaonline and Intercos (or the reverses by Zalando in Frankfurt). But the Fedrigoni paper mills are launching the public subscription offer this morning, an operation that will end on October 23: Piazza Affari hopes that the black streak will thus end.
