THE MARKETS REPENT AND REWARD DRAGONS
GOLD MEDAL FOR INTESA AND MEDIOLANUM
'SUS occupation it went better than expected: 163 new jobs against the 100 expected by analysts. After the publication of the data, Wall Street took off like a rocket: The Dow Jones gained 1,77%, , the Nasdaq 2,14, and the S&P 500 1,40%, to 1.384,22. Oil is up: September futures are up 81 cents to 90 dollars a barrel.
Note the thrilling swings of Knight Capital + 23% after having burned about 80% of the value in two days. The brokerage firm suffered a $440 million loss, caused by a technical error in trading, and had to cut its capital. The company will now be forced to seek new financing. But, judging by the reaction, he will find them. European stock markets continue to rise sharply. Piazza Affari, the best, literally flew over 14. The Ftse Mib index rose by 6,3 to 14.095% thanks to financial stocks in full recovery. Madrid follows, gaining 5,62%. Frankfurt earns 3,95% Paris 4,03%, London +2,18%.
The market has re-interpreted Mario Draghi's words in a positive light. The ECB could act, if it is not already doing so, by buying short-term government bonds. Meanwhile, the central bank is asking politics for a greater commitment to a closer fiscal union in the eurozone.
Strong reaction on Italian government bonds with the 2-year spread contracting by 65 basis points to 312 (2-year Btp yield 3,06%). The yield on the 12-month Bot falls to 2,65%. The 10-year Btp/Bund spread contracted by 33 basis points to 462 (10-year Btp yield at 6,04%). Similar recoveries also for Spanish Bonos, whose yields however remain at a safe distance from those of Italian government bonds: Bono 10 years 6,95%.
It should be noted that Italian yields up to 2 years have returned to levels not seen since the beginning of May, while the yield differential on the 2-10 year curve rises to 298 basis points from 213 two days ago. Translated into simple terms, this means that a 10-year BTP yields 290 basis points more (6,04%) than a 2-year BTP (3,06%).
THEeuro recovers ground and goes to 1,228 from 1,215 this morning.
In Financial stocks fly, those who suffered the most from sales yesterday. . Mediolanum even marks an increase of 16%.
Strong increases for Unicredit 6,7%. Even spectacular Intesa +12,58%, today grappling with the quarterly accounts.
UniCredit closed the first half year with a Group net profit down by 18% on an annual basis to 1,1 billion, while in the second quarter alone the decline in the consolidated net result is 66,9% to 169 million against 302 million in the consensus of analysts. EBITDA held up well at 2,5 billion in the second quarter, according to a note, confirming the Group's ability to face the difficult context and also operating costs did well. Provisions for loans increased sharply (+23,6% annually to 3,3 billion in the six months and +62,2% to 1,9 billion in the second quarter) due to the difficult economic context.
Unicredit settled the disputes relating to the Brontos operation with the Revenue Agency. Following the agreement reached, the bank will pay the tax authorities 264,4 million, a figure “which will be absorbed with the use of the appropriations made in previous periods.
Intesa has announced the results of the second quarter: Among other things, the group announced that it has completed 70% of the funding needs for 2012. Commitments on the public securities front are increasing. As at 30 June, the portfolio included Italian government bonds for 80,374 billion, of which 49,668 billion relating to banking activities with a duration of 1,7 years. For 2012 Intesa Sanpaolo expects a dividend per share equal to or higher than that distributed for the 2011 financial statements. Other objectives for the current year include maintaining the core tier 1 above 10% and capital ratios above the EBA threshold of 9%. Triumphant day also for the other banks with Banco Popolare +8,99%, Ubi gains 8,76%, Popolare Milano 7,79% and Monte Paschi +5,98%.
After a bad start, MontePaschi earns 3,6%.
Mediolanum +16,1% is the best blue chip.
Also positive i industrial titles, with Pirelli rising by 3,9%. Fiat rebounds by 6,52% and Fiat Industrial also performs well +2,93%.
Atlantia turns up 1,88% after a 2% down start. Société Générale downgraded the rating to hold from buy. The target price was drastically lowered to 11 euros from 14,9 euros. Citigroup confirmed the hold judgment and the 10 euro target, saying it maintains a cautious attitude due to the drop in traffic and the increase in debt.
Among the minor titles. Yoox rises by 3,4% after the announcement that the company has implemented the agreement with Ppr and set up a new company with the French luxury group, respectively 49% and 51% owned, based in Italy, for the management of mono online stores -brand of numerous luxury brands of the PPR group.
Continue the descent of Fondiaria Sai which even today loses 2,2%, moving ever further away from the issue price of the new shares deriving from the capital increase set at 1 euro.
The climate around the insurance company is heating up and not only due to the flop of the capital increase which saw an unopted 32% equal to 432 million euro, even if around 142 million of these will be subscribed by Unipol -2% at 1,83 euros, also below the 2 euros of the new shares issued.
