The bull's race continues as sudden as it is robust. By now the markets are convinced that the rise in the cost of US money is imminent: June, or, thanks to the caution caused by the British vote on EU membership, July. Meanwhile, the obstacle of Greece has fallen, after the agreement in the night between Tuesday and Wednesday in Brussels.
The IMF is actually holding back for now: "We're not in a situation where the IMF can say 'we're ready to move forward' but I think we can get there by the end of the year," said one official. But it takes more than that to curb the euphoria emanating from Wall Street being pushed up by the banks. Stock indexes are on the rise: Dow Jones +0,9%, S&P500 +0,7% to 2.090 points (one step away from the all-time record of 2.134), Nasdaq +0,7%.
FINANCIALS PUSH WALL STREET, GOLDMAN RAISES GDP ESTIMATIONS
The push is favored by numerous factors.
1) The oil rally. The price of crude oil crossed the psychological threshold of 50 dollars this morning: Brent reached a price of 50,08 dollars (+0,7% compared to yesterday's price of 49,2 dollars, already up 1%) , the Wti trades at $49,86. These are the highest quotations of the last seven months.
2) The dollar moves on the highs of the last two months against the euro: euro-dollar cross at 1,113.
3) The 2-year T bond, the most sensitive to monetary policy moves, stands at 0,93%. The 1,87-year bond rose to 170%. With a spread of 0,17 bp over the German Bund (XNUMX%).
4) The rally in tech stocks continues. Yesterday Microsoft led the race as it announced $950 million in writedowns and restructuring costs for its former Nokia cell phone division. He flies Computer Science (+ 42%) in view of a merger with the pc division of Hewlett-Packard. Alibaba thud (-6,8%) , under investigation for verification of actual sales data. But the recovery is driven by financials: Citigroup +3,7%, Bank of America +3%, JP Morgan +2,7, Goldman Sachs +3%.
5) Goldman Sachs has revised upwards its GDP estimate for the second quarter: according to the Investment Bank, the United States should record growth of 3%, from the previous +2,7%, according to Zerohedge reports.
WEAK ASIA, CHINA CONCERNS
However, the enthusiasm has not infected Asia. Concern over the Chinese situation weighs on the stock markets: the rise in the dollar risks putting pressure on the yuan with negative effects for the entire region. Despite strong gains in the energy sector, Tokyo limits the rebound to 0,3%, Hong Kong -0%. Shanghai loses 4%, Shenzhen -1%. Today Bank of China and China Merchant will issue, for the first time, two bonds composed only of non-performing loans.
MILAN +1,6%, GREEK BONDS BELOW 7%.
Positive closure instead for the European Stock Exchanges, infected by a new optimism on the prospects of the economy. In Milan, the FtseMib index ended the session with an increase of 1,6%, lower only in Madrid (+2,3%). The Paris Stock Exchange gains 1,1%, Frankfurt +1,4%.
In Europe, as on Wall Street, the best stocks belong to the banking sector: the sector's Stoxx index closed up by 3,2%. Any rise in the US should not infect the EU, still under the effect of deflation. But if market rates rise under the influence of the Fed, there will be some breathing room for banks and insurance companies, unable as they are in the current scenario of zero rates to gain from financial management.
Furthermore, the rise in the dollar could lend a hand to exports by European companies. Italy needs it in particular: in March, industry recorded the worst slowdown since the summer of 2013 with a 3,6% drop in turnover. The Automotive sector (+1,8%) and the Oil (+2,4%) sector also rose well on the list.
The Greek debt deal had immediate effects in the debt market. Athens 7-year yields slipped below 2% in the morning, only to correct in the afternoon. The 6-year bonds were traded under 120%. For the first time since the beginning of May, the Btp/Bund spread fell below 128 points, only to close at 1,44 points, with a yield of 30%. The Treasury announced that on Monday 6 May 7,5-5 billion between Ccteu and Btp at 10 and XNUMX years will be offered.
METROWEB, CDP GRANTS EXCLUSIVE RIGHTS TO ENEL
In addition to the euphoria for banking stocks, the broadband game characterized the day. Cassa Depositi e Prestiti has granted exclusive rights on Metroweb to Enel (+0,3%) in preference to Telecom Italia. The enterprise value awarded to Metroweb, destined to merge with Enel Open Fiber, is 814 million, the same price that was assumed by Telecom. It will now be up to the board of F2i, a shareholder of Metroweb with 53,8%, to decide on the operation. The only constraint to be resolved is the approval by Swisscom, which has a veto right on changes to Metroweb's shareholding until March next year, and which aims to exchange the 10,6% held in Metroweb Milano for a share of the Enel Open Fiber holding which yesterday announced an agreement with the municipality of Perugia for the laying of optical fiber throughout the municipal area as part of the national plan. The first 50 customers, identified within the project fast track, will be connected by Vodafone, Wind, Go Internet and Tiscali within the current month. Yesterday Telecom Italia also announced the launch in Perugia of the 1.000 Megabit ultra-broadband on fiber optics.
TELECOM ITALIA, 38,4% OF THE MEETING AGAINST BONUS IN CATTANEO
Telecom Italia up (+2,7%) on the day of the meeting. 38,4% of shareholders voted against the special awards or bonuses guaranteed to CEO Flavio Cattaneo: 55 million euros for 80% in shares, 20% in cash upon achievement of certain objectives. Even the board of statutory auditors had given a negative opinion. The proxy advisers had suggested that they vote against, because they consider that the salary is excessive and does not provide enough incentive for the pursuit of medium-long term results. However, the resolution passed with a majority of 61,5%, thanks to the vote of Vivendi and some funds.
Speaking of Enel, CEO Cattaneo opened up to a possible collaboration. “Where there are possibilities – he said about agreements on the network – or because it does it at a lower cost, we are not averse to identifying synergies”. But the intention to take over the majority of Metroweb remains valid. “We have also declared ourselves available – said the chairman Giuseppe Recchi – to open the ownership structure of strategic companies. And with the new team we have done everything a responsible and market-oriented company can do to look to the future with long-term prospects”.
STM, MACRON FIRES THE LEADERS IN THE SENATE
Cold shower for Stm (+0,8%). CEO Carlo Bozotti was practically fired by the Paris government. The French Economy Minister, Emmanuel Macron, during a hearing in the Senate, said: "We have a management that does not respond to our objectives, which has an uncoordinated communication policy and which has repeatedly taken sides against the persons who nominated him".
According to the minister, the European semiconductor leader has not reduced the dividend sufficiently, with “a short-term logic that aims to support share prices, but which is not our priority. On the contrary, it is necessary to reinvest and subsequently simplify governance and management”. On June 20 StM will pay a quarterly dividend of 6 cents per share, equal to an annual yield of 3,97%.
The French government and the Italian Cassa depositi e prestiti share control of StM, through a 50-50% owned vehicle, which owns 27,5% of Europe's leading semiconductor group.
BANCO BPM FLYS, THE RACE AFTER GHIZZONI AT THE START IN UNICREDIT
Positive day across the board for bank stocks. Unicredit closes up 2,4% on the first day after Ghizzoni. The goal is to get to nominate his successor in the board of 9 June. But awareness is gaining ground that the process, also due to the constraints imposed by the statute, will be longer. The nomination committee will meet on June XNUMXst. Among the names of potential successors are Marco Morelli (head of Bofa-Merrill in Italy), Jean-Pierre Mustier (former head of investment banking at UniCredit), Andrea Orcel (head of investment banking at UBS) and Alberto Nagel ( CEO of Mediobanca.
Leap of Banco Popolare (+8,7%), best blue chip of Piazza Affari, a neck and neck above Banca Pop.Milano (+8,2%): the group that will be born from the merger will be called Banco Bpm. The new banking group is expected to achieve normalized net profit of €2019 billion in 1,1 and generate synergies of €460 million when fully operational.
In the rest of the sector, Ubi leads, up 7,2%. Intesa Sanpaolo +2,2%, Mediobanca +2,2%. Starting off sharply, Monte Paschi closed with an increase of 0,9%. The day before it scored a rise of 10% thanks to rumors about a European hypothesis to give relief to institutions aggravated by too many non-performing loans.
The prospect of rising rates is also good for insurance companies and asset management companies. Thus the plus sign prevails: Generali +1,4%, UnipolSai +3,2%, Anima +5,6%, Azimut +3,2%. Negative yesterday Banca Mediolanum -1,2% (the day before +5%).
EXOR SUPERSTAR: SHARE IN RCS REDUCED TO 1,7%
Fiat Chrysler (+2,9%) and Exor (+5,3%) were positive. The shareholders' meeting of the holding company yesterday approved the 2015 financial statements closed with a consolidated profit of 744,5 million euros compared to 323,1 million in 2014 and a profit of the parent company of 2,5 billion.
The dividend is 0,35 euro per share for a total of 82,02 million (it was 0,33 the previous year). “Some of you – said chairman John Elkann to shareholders – are dissatisfied with the level of dividends, but we are in a historic phase in which we want to continue reducing the level of debt and ensure that what we collect is more than we give. . This is why the dividend does not decrease but neither does it increase”.
The president added that next year the group will evaluate new investments: “Today Exor's prospects are linked to five large companies operating in different sectors PartnerRe, FCA, CNH, Ferrari and L'Economist. There are five global companies, adding another isn't possible today as we don't have the means to do so, but it's right to start thinking about the future. Next year we will try to understand what other sectors we would like to enter but also explore smaller investments such as Welltec and potentially new ones”.
Elkann has once again denied the interest in Peugeot: "The operation with Psa would not make a leap in size". The stake held in RCS has already been reduced to 1,74%.
SITTING OK FOR ENI, LEONARDO AND BUZZI
Energy stocks are highlighted. Eni +3,4%, promoted to Buy by Cheuvreux. Saipem +4,3%. Tenaris, on the other hand, was weak (+0,2%): the Brazilian subsidiary Confab is under investigation, like the local companies of other steel groups, with the hypothesis of corruption linked to obtaining orders from the public giant Petrobras.
Leonardo (+1,2%) announced the signing of a contract with the Government of Pakistan for "several AgustaWestland AW139 twin-engine helicopters", with deliveries expected next year.
Buzzi (+1,5%) reached an eight-year high supported by the promotions of some brokers. According to UBS analysts, the stock benefits from the favorable trend in cement prices in the USA and from the potential for price growth also in Italy from the beginning of the second half.
WEAK LUXURY. THE BUY BACK DOES NOT REVIVE LUXOTTICA
Widespread declines in luxury, conditioned by Tiffany's weak accounts. Luxottica is one of the worst blue chips today with a retreat of 1,1% to 49,11 euros. Yesterday the company announced that it had launched a new buyback plan of up to a maximum of 4 million ordinary shares, in execution of the resolution of the shareholders' meeting of 29 April 2016. The amount corresponds to 0,827% of the share capital.
