The US labor market is improving, but "the slowdown in the Chinese economy could pose risks to the economy's prospects". This can be read in the minutes of the Fed meeting on July 29, before the devaluation of the yuan and the new drop in crude oil which has since fallen by 17%, thus curbing the recovery in inflation.
The Fed's minutes have thus brought new arguments in favor of the thesis according to which the central bank will renounce the rate increase in the September meeting. Stock market indexes, weak for most of the session, reacted to the rise under the pressure of utilities. But in the end, the sales caused by the new slump in oil and by concern for China prevailed again.
The Dow Jones closed down 0,93%, S&P 500 -0,83%. NASDAQ -0,8%. The uncertainties of the US markets were confirmed this morning in Asia: Tokyo fell by 0,6%, Sydney -1,2% conditioned by the performance of oil stocks.
IMF POSTPONES YUAN PROMOTION TO 2016
Above all, the slowdown of Chinese stock exchanges continues, increasingly volatile. Shanghai is down, one hour after the close, by 1,3%, Shenzhen – 1,2%. But an "anomalous" wave of top-down purchases, as happened in Tuesday's session, is not excluded.
Meanwhile, the quotation of the yuan is tending to stabilize: the central bank has set the parity against the dollar at 6,3915 (+0,1%) but analysts expect further declines. Meanwhile, Beijing's hope of seeing the currency admitted to the basket of special drawing rights has faded: the Monetary Fund has decided to postpone the review of the basket to autumn 2016.
It was another day of pain for emerging markets. Indian rupee, Malaysian ringgit, Vietnamese dong and Turkish lira record new lows against the dollar. The Morgan Stanley Capital Index Emerging Markets stock index is moving at levels not seen for four years.
OIL, LANDSLIDE CONTINUES. ENI LEAVES 3% ON THE GROUND
Meanwhile, the landslide in oil prices is gaining speed. Prices hit new lows tonight: WTI crude traded at $40,4 a barrel, down 5,2% to its lowest prices since March 3, 2009. Brent fell to $46,85 (-0,7 % after yesterday's plunge of 3,4%). The future fell after the release of data on strategic hydrocarbon inventories in the United States.
Heavy repercussions on oil stocks. The fall in oil knocked Eni down. The shares of the Italian major lost 3% after hitting a low of 14,66 euros (-4,2%) following data on weekly crude oil inventories in the US, much higher than analysts' expectations. Enel also fell sharply -2,4%.
THE GREEK AGREEMENT DOES NOT LIGHT UP EUROPE: MILAN -1,8%
The drop in oil influenced the end of the session on the European markets. In Milan, the Ftse Mib index closed with a loss of 8%. Frankfurt (-2,14%), Paris (-1,75%) and London (-1,9%) were also heavy.
Greece has now faded into the background. The German Parliament approved the aid plan as expected. Immediately afterwards, the board of the European Stability Mechanism (Ems) approved the proposal for financial aid to Greece. Under the terms of the agreement, the EMS will provide up to 86 billion euros in financial aid to Greece over three years. Finance ministers have released a first tranche of aid that will allow Greece to repay 3,4 billion euros to the ECB today. Greece will immediately receive 23 billion euros.
LUXURY IN THE SIGHT. NEW REDUCTION FOR PRADA
China suffers, emerging markets suffer. And the luxury sector continues to suffer, the most targeted by sales. The most penalized in Milan are Ferragamo and Tod's with losses exceeding 3%. Next comes Luxottica (-2,7%), involved in a French antitrust investigation into an alleged agreement on price fixing. Moncler -1,3%, Ferragamo -3,1%, Yoox -0,3%. In Hong Kong, Prada dropped again this morning (-0,86%).
RISIKO IS GOOD FOR CARIGE AND THE POPULAR PEOPLE
Among the banks, the Popolari are saved, in the wake of the expectations of consolidation of the sector which could start shortly. Banco Popolare is making progress (+0,56%) together with Ubi Banca (+0,48%). Bper (+0,43%) and Bpm (+0,1%) also performed well. Carige also toned (+3,6%) at the center of the risk. Instead, Mps slows down in the final (-0,4%).
On the other hand, Unicredit (-0,9%), Intesa (-1,7%) and Mediobanca (-1,8%) are down. Mediolanum lost 2,2%, Generali 1,7%.
EMERGING EMERGENCIES WEIGHT ON PRYSMIAN AND CNH
Difficult day also for industrial stocks. The worst blue chip of the day was Prysmian with a drop of 3,8% linked to the crisis in emerging countries.
In 2014, the leader in the cable sector generated approximately 13% of its total revenues (6,84 billion euros) in the countries of the Pacific + Oceania area, 8% in Central and South America, 64% in EMEA area (Europe, Africa, Middle East), 15% in North America.
The fall in demand from emerging markets also weighs on Cnh Industrial (-2,7%). Fiat Chrysler (-2,7%) and StM (-2,1%) also fell sharply. Finmeccanica -0,1%.
THE RACE OF PRELIOS CONTINUES
Prelios +7%, best title for the second consecutive day. Down on the other hand were Recordati (-3,6%) and Maire Tecnimont (-4,3%), worst stock of the day.
