Has Mario Draghi run out of ammunition? This is the alarm that swept the markets when, during yesterday's press conference, the president of the ECB declared that there will be no new rate cuts, barring extreme circumstances. This was enough to cause a reversal of direction of the stock exchanges, which fell into negative territory, and the rise of the euro and of the so-called "safe havens", gold (this morning at the highs of the year at 1.281 dollars an ounce) and the yen. The superbazooka of the ECB, for now, has not achieved the main mission: to restore confidence in the markets. On the contrary, a negative feeling is making its way: the wizard of the ECB may have run out of her spells.
The American stock market, initially up and in the wake of the European stock markets, closed practically unchanged. Dow Jones index down 5 points (-0,03%), S&P500 index up 0,3% points (+0,02%), Nasdaq index down 12 points (-0,25%).
OIL RISES AGAIN
Brent-type oil closed down 2,5% at $40 a barrel. But this morning it rose by 2%, to 41 dollars, also following some data on fuel consumption for vehicles in the United States. Crude is about to file a fourth consecutive week of upside. There is great uncertainty about the meeting between the producers already scheduled for March 20: due to the failure to reach an agreement with Iran, the summit could be postponed or, according to Reuters, even cancelled.
After a negative start, the Asian markets recover positions: Tokyo is starting to close up by 0,6%, Hong Kong by 0,5%, Shanghai loses 0,1%, Seoul +0,3%. The euro's surprise run continues in the East: after losing 4% against the dollar yesterday afternoon (1,082), the single currency reversed its course, reaching a 4-week high above 1,12. It now trades at 1,116.
EUROPEAN LISTS BETRAY THE CENTRAL BANK
A slight recovery is expected at the start for the European stock exchanges. Futures signal rises in the order of one percentage point for Frankfurt, Paris and London. But the shock caused by the stock exchanges' response to the central bank's messages has left its mark. The ECB has left no stone unturned in the fight against stagnation. Yet, after an initial rally, the market response has been disappointing.
The Milan Stock Exchange, which after the press release on the Frankfurt decisions had soared by +4%, closed the session down by 0,5%. The German Stock Exchange performs poorly (-2,2%), London is also down (-1,6%). Madrid defended itself (+0,3%).
GOVERNMENT BONDS TOWARDS NEW RECORDS DOWN
New test this morning for the bonds at the auction of medium and long-term Italian securities. Yesterday the 1,4-year BTP closed the day with a yield of 1,28%, after falling to a low of 114%. Spread at 15 points (at 107 pm it was 2 basis points). The initial rally had pushed the 0,09-year BTP to an all-time low of -XNUMX%.
In the morning, the Treasury had placed 6 billion euro of 12-month BOTs (out of 6,5 maturing), at a yield of -0,068%, the second lowest ever. Today, the offer of a total of 7,5 billion is expected, distributed between the new 7-year BTP in March 2023 (coupon 0,95%) and 3-year and 15-year bonds. The new 7-year bond is trading on the gray market in the 0,90% area , approaching the all-time low of 0,71% in March 2015. On the secondary, October 2018 is negative at -0,08% at the new all-time low.
FROM FRANKFURT BELOW ZERO MONEY FOR BANKS AND COMPANIES
The ECB has certainly not spared its efforts to restart the economy. The central bank lowered the main refinancing rate to zero, from +0,05%, and cut the rates on marginal lending by basis points to 0,25%. A new series of refinancing operations reserved for banks was launched, 4 Tlters with a 4-year maturity to start every quarter starting from June 2016. The liquidity will be made available at a cost equal to zero, the reference, but there is the possibility of further decreasing, up to a negative rate of -0,4%, depending on the requests arriving from the banks.
The ECB has also expanded QE bond purchases to 80 billion euros from 60 billion euros, 10 billion euros more than expected. Qe will also be extended to new classes of bonds, including those issued by non-credit companies: bonds with negative yields of up to 0,4% will also be bought and there will also be room for subordinated bonds.
All this effort is necessary to restart inflation, which is destined to remain negative in the coming months due to the drop in oil prices. The new measures should be able to bring prices back up in the second half of the year. Draghi clarified that the eurozone is not in deflation, but specified that it is now "crucial to avoid a second round of negative effects on inflation", triggered by the drop in oil prices.
BANKS ON A ROLLER COASTER, BPM GOES UP
Two-sided session for credit titles: in a decisive rally after the announcements from Frankfurt, in a decisive slowdown in the final stages. In the end Unicredit rises by 2,2%, from the +9% reached in the early afternoon. Agreement +1,1%, Monte Paschi on parity. Banca Popolare di Milano closed up 5%. Banco Popolare lost 1,6% The mission to Frankfurt by the heads of the two institutes produced no results. The Supervision of the ECB, the subject that must authorize the aggregation between the two institutions, continues to raise doubts both on the governance and on the disposal of non-performing loans.
Relay today to the top management of Generali (-0,1%). The nomination committee is convened to designate Philippe Donnet, current CEO of Generali Italia, as the new CEO.
THE RISK OF PAY TV AND TLC IS DEFLATED
Yesterday the expectation for the risk of media TV and TLC was deflated. Mediaset, protagonist of a leap of 6,8% on Wednesday, lost 2,4% on Thursday. Telecom Italia closed at -2,5%, at 0,99 euros. During the session it had gone up to 1,0550 euros. It seems that Vivendi, the largest shareholder of the Italian telecommunications group with 22,8%, did not like the exit of the CEO of Orange, Stéphane Richard, who in recent days had relaunched the idea of a merger with Telecom Italia.
Vivendi now appears much more focused on creating a European anti-Netflix platform with Mediaset in a project that sees the birth of an entertainment giant with the convergence of the telecommunications and media sectors.
GEOX SUPERSTAR, ASTALDI BLACK JERSEY. TOD'S LEAVES THE BASKET
Weak industrialists. Fiat-Chrysler -2,9%. Ferrari also sold -3,39%. Finmeccanica is back (-2,2%) which announced the signing of agreements for a total value of approximately 120 million euros with Malaysia, Saudi Arabia and Morocco.
In the energy sector, Enel gained 0,5%. Eni lost 3,3% on the wave of the decline in crude oil. Saipem -3,9%: the US fund Dodge & Cox reduced its stake to 6,4% from the previous 11,6%.
The best stock was Geox: +6,2% to 2,9820 euros, after having reached a maximum of 3,09 euros. Kepler-Cheuvreux upgraded the judgment to Buy from Hold. The target price is set at 3,25 euros.
The worst was Astaldi after the presentation of the 2015 accounts. Kepler Cheuvreux cut the target price to 4,30 euros from the previous 4,80 euros. Exane BNP Paribas reduced it to 5,50 euros (-30%). For both brokers the judgment remains Hold.
In luxury, Moncler corrects (-3,69%). Unchanged Tod's, which will leave the Ftse Mib index from 21 March. The group from the Marches entered the basket five years ago.
