Vertically falling stock markets and rising spreads. The market clock seems to have gone back several months with perfect timing and that is while the stability law is being examined by the European Union. In the end, the lists manage to recover the losses and close not far from parity while Wall Street tries to move into positive territory after some better-than-expected macroeconomic data.
Milan is doing worse, closing in the red by 1,21%, now at 18.083 points, Paris drops by 0,54%, London by 0,89%, while Frankfurt manages to regain positive territory at +0,13.
THE VIX RISES, THE SPREAD RUNS
IN GREECE RETURNS TOWARDS 9%
Volatility is making a comeback on the markets after being extraordinarily low in recent months. The Btp-Bund spread rose to 200 during the day and then closed at 178 basis points. Volatility should not create repercussions for the state coffers: the Treasury has its back covered, having already completed 86% of the funding program planned for 2014. A good part of the remainder will be completed next week with the seventh issue of the BTP Italy leaving on Monday for retail. In 2014 the Treasury was able to finance itself at the lowest historic cost, at 1,39% from the average 2,14% in 2013. Cost of funding at 1,39%, at historic lows.
The Italian Treasury, at least for 2014, is substantially sheltered from the volatility of these days as regards the cost of servicing the debt. Even if the rise in yields on BTPs were to further accentuate in the next few days, the impact for the state coffers is destined to be marginal. And in Greece, yields soared towards 9%. However, the entire sovereign debt market is under stress.
Today Spain had problems in placing its debt: the auction closed with a rise in yields and an amount placed equal to 3,2 billion out of the 3,5 billion expected. France also suffers. In any case, the auction of 5-year bonds in Paris went without problems: the French Treasury placed 7,497 billion euros of bonds with yields down by 0,39% from the previous auction to 0,34%. The widening of spreads is also a consequence of the new substantial wave of purchases on German Bunds.
The markets are feeling the effects of Greek tensions, uncertainty about the economy and deflationary fears in Europe. Today the September consumer price index slowed to +0,3% in the Eurozone and +0,4% in the EU. In both cases, this is the smallest increase in the last five years. then there is the Ebola emergency in the background. The clouds gathering over the economy resulted in a drastic drop in the price of oil which dropped below $80 a barrel to close at around $81. Naturally, oil prices are back down.
BULLARD (FED ST.LOUIS): POSTPONING END OF QE
MACRO DATA USES BETTER THAN EXPECTED
While the ruble touches new all-time lows despite the support of the Russian Central Bank, the euro-dollar exchange rate falls to 1,2810 -0,22%. On Wall Street, after an attempt to recover, the indexes returned to negative territory: the Dow Jones lost 0,55%, the S&P500 0,15% and the Nasdaq 0,33%. St.Loius Fed Chairman suggested the Fed should think about ending QE later. Some macroeconomic data has also arrived from the USA, which beat expectations. The Philadelphia area manufacturing activity index fell to 20,7 points in October from 22,5 points in September.
However, the data released by the local Federal Reserve is better than the expectations of analysts who expected a more contained decline to 19,9 points. In detail, the sub-indexes on prices paid grew from 27 to 27,6 points, that on prices received from 8,8 to 20,8, that of new orders from 15,5 to 17,3 points and that of stocks from 6,1 ,14,8 to 21,2 points. On the other hand, the sub-indexes relating to employment decreased, from 12,1 points to 21,6 points, shipments from 16,6 to 3,8 points, deliveries from 0,6 to 1 points. US industrial production in September rose by 0,4% seasonally adjusted against forecasts by analysts for +23%. Unemployment benefits fell by 264 to XNUMX.
SALES ON BANKS AND TELECOMS, CNH WELL
Eyes on the results of the US financial giants: Goldman Sachs, despite above-expected profits and dividends, falls back on the lists. In Piazza Affari the banks and Telecom still suffer: Mps -8,72%, Bpm -4,86%, Ubi Banca -3,21%. Azimuth -3,87%. Telecom Italy -4,01%. The best stocks of the Ftse Mib, Cnh (+6,32%), Tod's (+3,27%), Saipem (+2,31%), Finmeccanica (+1,74%) and Pirelli (+1,01%).
Luxottica regained share after marking its lowest price since January 2013 during the day and closed up 0,6%. The group today denied rumors that some key executives were leaving: Fabio d'Angelantonio, Sunglass Hut president and chief marketing officer, and Antonio Miyakawa, head of licensing.
