Some discordant notes in the concert of the US quarterly reports and the uncertainty around European banks have conditioned the progress of the lists, which await indications from the central banks to understand whether or not there is room for the traditional year-end rally. A first signal in this sense arrived yesterday afternoon via Reuters: "Sources inside the commission" argued that the extension of the easing plan, put in place to give new breath to growth and inflation, is practically certain while maintaining the he current pace of monthly purchases – 80 billion a month – will depend on the indications coming from
macroeconomic data.
In particular, the key rule which requires the Eurosystem to purchase bonds in proportion to each individual country's share in the capital of the ECB could be set aside. The change would make it possible to reduce purchases, for example, of German government bonds, whose yields up to 5 years are often below the minimum threshold of -0,40% below which the ECB cannot purchase, instead favoring an increase in activity on peripheral paper, such as the Italian one. Will it go like this? The markets reacted to the news positively but not too much. The EU is currently too divided to send precise signals. But stagnation can cost dearly: if no action is taken on the expectations of companies that are too low today, warned the chief economist of the ECB Peter Praet, there is the risk of causing a permanent reduction in production capacity.
In the meantime, the markets appear tired, as reported by Meteo Borsa. Asian stock markets were weak, influenced by weak Apple data and the slowdown in the dollar. Tokyo drops by 0,3%, Hong Kong -1,1%. Shanghai and Shenzhen also fell (-0,3%). The decline in Chinese industrial profits (-7,7% in September) weighs on raw materials. Weak Nintendo: the major profits linked to the success of Pokemon have been wiped out by the growth of the yen.
The US markets were mixed: the Dow Jones recorded a rise of 0,17% at the end. A similar change but downwards for the S&P, which fell by 0,17%. The Nasdaq dropped 0,63%. The quarterly reports influenced the session. The disappointment for Apple's accounts weighs on technology (-2,2%). Apple's profits in China, now the number one market, fell 18% in the quarter. The positive boost to the industrial index comes from Boeing (+4,7%), at the highest levels of the year after the brilliant results of the quarter.
OIL BELOW 50 DOLLARS, SAIPEM -3%
The jump in Markit's PMI on purchasing managers' expectations, coupled with September's still very strong home sales data, reminded investors that economic improvement brings rate hikes closer. The yield on the benchmark 1,80-year bond rose by three basis points to XNUMX%, a level not seen since June.
Oil prices stable but below 50 dollars. The prices were supported by the decline in US stocks and the political crisis in Venezuela, now one step away from civil war. But skepticism is growing about the success of the OPEC meeting at the end of November which should fix a production ceiling. Even Vladimir Putin has said that Russia does not intend to reduce extractions.
Brent traded this morning at 49,95 dollars a barrel, Wti at 49,13, both below the psychological threshold of 50. In the American list, Chevron and Exxon Mobil rose by 0,4%. European energy stocks were weaker: Eni -1%, Tenaris -2,9%. Total down 1%, Bp -1,4%. Worst of all was Saipem (-3%) after the announcement of a loss of 1,978 billion in the third quarter, due to asset write-downs. "The market did not like both the surprise write-downs and the new net debt target with a consequent deterioration of 400 million in cash", an operator told Reuters.
LA BUOY SUPERVISES SALES ON MPS. MILAN +0,3%
Futures on European stock exchanges anticipate a start down by 0,4%. The Financial Times reveals that the British market authorities have asked the City banks for the exact position vis-à-vis Deutsche Bank and some Italian institutions, starting with Monte Paschi, a precaution linked to the strong sales currents of recent weeks. It is the confirmation that central banks, starting with the Bank of England, have already taken steps to counter a possible "Lehman effect".
Piazza Affari filed a session above parity without any particular cues, the Ftse Mib closed the session with a +0,29% at 17.280 points, recovering all losses and accelerating upwards in the final. Minus sign in Paris (-0,18%), Frankfurt (-0,5%). In positive territory Madrid (+0,24%). Bringing up the rear was London (-0,9%), weighed down by mining titles: Antofagasta lost 3,2% after announcing a reduction in copper production in 2017.
Rich quarterly schedule: Volkswagen, Deutsche Bank, Barclays, Bbva, Telefonica, Deutsche Boerse, Basf, Abb, Nokia, Technip, Suez, BT Group, Alcatel. Closure in the red for the bond market, which continues to weigh on the uncertainty relating to the ECB's decisions on quantitative easing. The 1,48-year BTP rate rose to XNUMX%, surpassing the peak reached after the Brexit referendum: it is the highest since the end of April.
The offer of six-monthly BOTs is expected for today, against the 6,6 billion maturing. On the gray market yesterday, the stock traded at a yield of -0,282% from -0,257% at the end of September. This level, if confirmed in the auction, would represent the new historic low.
STILL CHILLS ON MONTE PASCHI (-8,6%)
At the center of attention are still the thrilling fluctuations of Monte Paschi which closed with a decline of 8,6% which adds to the -15% recorded on Monday after the presentation of the strategic plan. Trading remains intense (284 million pieces) but below the average of the last five days of 333 million.
Sales also prevailed on the subordinated debt of MPS after the increase triggered following the presentation of the bank's rescue plan which envisages, among other things, a potential voluntary exchange offer between the subordinated securities and new shares of the institute, in the scope of the 5 billion capital strengthening.
The MPS September 2020 subordinated bond with a 5,6% coupon was traded during the session at a price of 77,80, with a yield rising to around 13,30%. At the beginning of October, the yield reached a maximum of over 19%.
Bitter outburst from Giuseppe Guzzetti, president of Acri, one of the creators of Atlante. “We invent good tools but we leave them to their fate. If you don't give Atlas money, what does Atlas do? Atlante has performed a fundamental function,” said Guzzetti. The number one of ACRI points the finger in particular at Credit Agricole and BNP Paribas which “operate in Italy with banks that have NPLs and do not show solidarity for the whole system. I attended the meetings but sadly in retrospect I wish I hadn't gone. I forced friends and colleagues to put 536 million. Allianz performed well”.
The sector as a whole was positive, with the relative index up by 0,7%. Unicredit rose by 0,7%, Intesa +0,5%. Positive Banco Popolare (+3,5%), and Pop. Emilia (+1,6%). Banca Mediolanum has dropped by 1%: the ECB has reiterated the request, made two years ago by the Bank of Italy, that Fininvest reduce its stake from the current 30% to less than 9,9%, because the owner of the Fininvest, Silvio Berlusconi, has lost the integrity requirements (finally convicted of tax fraud).
FIAT CHRYSLER SUPERSTAR, USEFUL TESLA
The market rewarded Fiat Chrysler's good accounts with full marks (+4,4%). The upward revision of some targets for 2016 was appreciated. In the automotive sector, Tesla's leap should be recorded: +5% after the stock market. The July-September period ended with adjusted net income of $111 million, or 71 cents, over the same period a year earlier the electric sports car maker had posted a loss of $1,35. For Tesla, closing a quarter in profit is almost an event, only twice in its history has it happened.
YOOX STAGGERS, ESPRESSO AND AMPLIFON FLY
Strong decline for Yoox (-2,27%). The market expects disappointing results from the quarterly to be published on November 9th. Telecom Italia +0,19%. For Equita Sim, which confirmed the buy rating on the share and the target price of 1,21 euro, the share is undervalued and has very interesting upside potential.
Positive for Terna (+1%). According to Jefferies (hld, Tp at 4,8 euro) the possible purchase of 24% of Admie's capital would be a significant opportunity for the group. The accounts pushed L'Espresso (+2,98%) and Amplifon (+6,01%). Purchases also on Sogefi (+4,66%) rewarded by Banca Akros, which raised the target price on the stock to 3,1 from 2,9 euros, confirming the buy recommendation.
Leap of the Sun 24 hours (+20%) which continues the recovery of the last few days after a period of prolonged weakness.
