Great end of the week for the financial markets. The most awaited US data will arrive today: new jobs and the manufacturing index, two signals that will have to confirm the recovery of the American locomotive. But very few expect an imminent turnaround in rates, given the performance of the currency markets.
The confirmation comes from the march of the euro, which this morning broke the barrier of 1,14 against the dollar. Since early March, the European currency has appreciated against the dollar by almost 5%.
Meanwhile, even the Central Bank of Japan must acknowledge that the negative interest rate policy has not brought the desired benefits: the Tankan, Tokyo's super-index, reports the worst data since June 2013, before the start of Abenomics: new stimuli are urgently needed money, despite the huge public debt. The yen, however, continues its ascent (112,26 on the US currency).
CHINESE WITHDRAW FROM STARWOOD
In this context, Wall Street closed the last session of the first quarter with modest variations: S&P 500 and Dow Jones -0,2%, Nasdaq unchanged. The first setback in Chinese shopping in the USA is significant: Anbang International's offer of 14 billion dollars for the Starwood hotel chain was withdrawn because the group led by Wu Xiaochui did not raise the money necessary to beat the offer from Marriott, which is thus preparing to create a giant with 5.500 hotels. Starwood's -5,3% drop on Wall Street was immediate. This is the first stop for Beijing's finance, closely linked to political power, after the flurry of purchases by Chem China and Wanda.
JAPAN SLOWS DOWN, BEIJING RAISES ITS HEAD
The Japanese economic crisis has hit not only the Tokyo Stock Exchange, down by 2,8% one hour after closing, but also other Asian stock exchanges. Shanghai also falls (-1,4%) despite the first, comforting positive signal. The PMI index on the expectations of purchasing managers of Chinese manufacturing companies rose in March to 50,2 from 49 in February, it is the first increase after seven months of decline and it is also the return above the 50 point level which marks the boundary between contraction and expansion. On the other hand, Standard & Poor's negative outlook has arrived: for the rating agency, Chinese reforms are proceeding too slowly.
THE WEIGHT OF THE EURO STRONG ON EUROPE. MILAN -1,4%
The advance of the euro (“it is certainly not what Mario Draghi hoped for”, comments the Financial Times this morning) conditioned the last session of the European Stock Exchanges in March. According to forecasts, today's opening is also weak. The PMI indices of the main European economies will be released in the morning.
Milan suffered a drop of 1,4%. However, the Ftse Mib index climbed above the support at 18.000 points after reaching an intraday low of 17.971 points. The balance for March remains positive: +2,802%. On the other hand, the first quarter was heavily negative: -15,414%. Madrid (-1,6%) and Paris (-1,3%) were also bad yesterday. Frankfurt (-0,81%) and London (-0,46%) defended themselves.
In Europe, sales hit oil companies in particular (the Stoxx index is down 2%). The media sector (Stoxx -1,8%), banks (Stoxx -1,7%) and utilities (Stoxx -1,6%) also fell.
SURPRISE. THE BEST PRICE LISTS ARE IN SOUTH AMERICA
The financial first quarter balance sheet offers some surprises. The most unexpected data is the recovery of emerging stock markets, caused by the return of financial flows to peripheral markets, already hit by the fall in raw materials and by the Chinese slowdown: in March, according to the IIF, half of capital movements involved the south of the world.
The Brazilian Stock Exchange, in full institutional crisis, was the best, with a leap of 20%, followed by Buenos Aires and Mexico. Also on the currency front, the recovery of the real stands out, together with the Canadian dollar and the ruble, already great victims of the decline in commodities.
Another surprise winner was gold: the yellow metal, favored by the drop in the dollar (worst quarter in the last five years) achieved the best three-month performance in the last thirty years.
POPOLARI, MPS AND UNICREDIT: THE LANDSLIDE WON'T STOP
The banking sector is still being targeted, also penalized by the approaching two delicate recapitalisations, that of Veneto Banca and Banca Popolare di Vicenza.
Unicredit pays a heavy price (-3,06%), which has to guarantee the increase of the Vicenza bank. Unicredit, according to Reuters, could try to postpone the capital increase of Pop. Vicenza, for which it has provided a guarantee, with respect to the currently foreseen times of the end of April if market conditions do not improve, according to some sources. UBS announced that it has started hedging the stock with a Neutral recommendation and a target price of €3,70.
On the other hand, Intesa Sanpaolo is up (+0,66%), which will have to guarantee the increase of Popolare di Montebelluna. Monte Paschi closes down by 4% to 0,5060: in the first quarter of the year the loss is around 60%. Bofa-Merrill Lynch cut the recommendation to Hold from Buy, target price at 0,65 euro from 1,10 euro. The US broker's analysts are convinced that margins will remain under pressure also due to the probable weakness of the revenue growth trend.
Banco Popolare still suffering (-6,42%), at a new historic low after losing up to 8%. Investors remain very cautious in view of the one billion euro capital strengthening measures that the institution will have to take at the purpose of complying with the dictates imposed by the ECB. Banca Popolare Milano also fell (-3,8%), the bank candidate to merge with the Venetian institution. Strong declines also for Ubi (-4%) and Bper (-3,2%).
Closure in a nosedive also for Carige (-4,04%). Yesterday the meeting renewed the board of directors by rewarding the list of Malacalza Investimenti (55% of the shares present) which obtained 10 seats on the new board: Giuseppe Tesauro, former president of the Consulta and of the Antitrust, was appointed president, Vittorio Malalcalza is the vice president. Guido Bastianini, will be indicated as ad.
In the meeting, the lawyer Vincenzo Mariconda, speaking on behalf of Malacalza, expressed "bewilderment and concern about the methods of disclosure of Apollo's proposal". Malacalza Investimenti does not believe that the offer of the private US, which aims to take over the non-performing loans and become the first shareholder of the Ligurian bank with a reserved capital increase, is sponsored by the ECB, contrary to what has been hypothesized by the press. Thus a "plan B" is emerging to oppose the private US, which should move from recourse to the Gacs (Guarantee for the securitization of non-performing loans), with the aim of enhancing the institution more in view of a future aggregation.
SAIPEM SLIPS BELOW INCREASING PRICE
WTI oil closed last night's session at 38,3 dollars a barrel, with little movement (it gained 14% in March). Anticipation is growing for April 17, when a historic agreement could be reached in Doha between hydrocarbon producing countries.
Oil stocks were weak yesterday: Eni -1,8%, Tenaris -0,1%. The landslide of Saipem continues, which closed the last session of the month close to parity at 0,3540 euro, a price slightly lower than the issue price of the new shares of the capital increase which had been set at 0,3620 euro. It is the worst blue chip in the first quarter of 2016 with a loss of 62%.
The disappointing performance of the stock is weighed down by the fear that the banks, which have had to purchase unopted securities (ie not subscribed by the market at the time of the capital increase), sell the shares on the market while accepting sacrifices on the price.
The utilities reverse course: Enel -2,2%, Snam -0,4%, Terna -0,9%.
WEAK INDUSTRY AND LUXURY. SPOTLIGHT ON VIVENDI-MEDIASET
Telecom Italia sold 0,63% in the final days following the appointment of Flavio Cattaneo as managing director. After the changing of the guard, market rumors point to the acceleration of the negotiations between Videndi and Mediaset (-1,31%).
The recovery of the euro has affected industrial and luxury goods. Finmeccanica (-1,4%) and StM (-0,3%) lost ground. Fiat Chrysler -2%, Cnh Industrial -2,3%. In luxury, Luxottica -2,6% and Moncler -1,8%, the best blue chip since the beginning of 2016 with +15%.
