It seems like a midsummer dream: Piazza Affari, under the impetus of Unicredit, conquers the primacy of the best stock exchange of 2017, overtaking Madrid by leaps and bounds. In the same day, the yield on BTPs returns below the 2% barrier: the feared increase in the cost of debt has not yet materialised. On the contrary, the ECB bulletin reports that the economic situation seems to be turning upside down. Of course, the picture is threatened by the strength of the euro, which is already starting to make its effects felt on exports. But, on the other hand, the revaluation of the single currency removes the risk of a tightening of money in Europe. For now, the budget for the Bel Paese is largely positive. We'll see. In short, operators can leave for a sunny weekend without particular anxieties. Even on Wall Street, at least in appearance, dead calm reigns despite a political situation hotter than the climate of this African summer.
The Wall Street Journal revealed yesterday that Robert Mueller, the special prosecutor for Russiagate, has convened a grand jury into the investigation into alleged Russian interference in the 2016 US election. Thus the circle around Donald Trump is tightening: impeachment remains a remote hypothesis, but the space for reform is getting smaller every day. Yet, the streets of politics are full of surprises. Last night the President received the support of the governor of West Virgina, Jim Justice, convinced by Trump's pro-coal policy.
WEAK ASIA, THE DOW REMAINS ABOVE 22 THOUSAND
The Japanese stock market was weak (-0,3%), held back by the recovery of the yen. Shanghai was also down (-0,3%). Good Hong Kong (+0,4%). After Thursday's crash, signs of recovery of the Korean Kospi (+0,3%). The American Stock Exchange remained on the sidelines awaiting today's data on employment. The Dow Jones gained an unnoticeable 0,04%, thus reaching a seventh consecutive high (22,026,1 points). S&P500 down 0,2% and Nasdaq down 0,4%.
The news of the inauguration of the Grand Jury, which has already begun its work, questioning witnesses under oath and seizing documents, weighed on the results at the end of the session. The dollar lost further ground following rumors of investigations into Russia's interference in the latest presidential election. Euro-dollar exchange rate at 1,187 from 1,185 the day before.
TESLA SHINES IN NEW YORK, THUD OF TENARIS IN MILAN
On the price list only Tesla shone (+6,5%). The electric car company founded by Elon Musk closed the second quarter of 2017 with a loss of 336,4 million dollars, worse than the 293,2 million loss of the same period of 2016. Net of extraordinary items, however, the loss per share improved to $1,33 from a year prior's $1,61, better than the red expected by analysts, who were expecting $1,82 per share. Revenues more than doubled to $2,79 billion, versus $1,27 billion in the same period of 2016 and $2,51 billion expected by the market.
Brent oil finished down 0,7% at $52,0 a barrel. Oil prices go down in Piazza Affari. Eni loses 0,2%. Collapse Tenaris, down by 7,2%: the company of pipes for the oil industry expects a difficult scenario in the coming months due to the rise in raw materials.
MILAN +13,2% FROM JANUARY, FRANKFURT ONLY +5,9%
Piazza Affari consolidated its fresh record of best European Stock Exchange in 2017 with a sprint in the afternoon. The Ftse Mib index rose yesterday by 1,02%, to 21.793 points. Among the other markets, Paris (+0,55%) and Madrid (+0,31%) advanced. Setback for Frankfurt (-0,2%).
London rose (+0,89%), driven by the drop in the pound, to a 9-month low against the euro (0,9039) after the Bank of England's decision to keep interest rates unchanged. The BoE also reduced its 1,9 UK GDP growth estimate from +1,7% to +2017% and its 1,6 forecast to +1,7% from +2018%. Uncertainty over Brexit "weighs decisions by businesses and households and penalizes both supply and demand," Governor Mark Carney said.
Since the beginning of the year, the Italian stock market has gained 13,2% ahead of Madrid (+12,7%), Frankfurt (+5,9%) and Paris (+5,6%).
GOOD FOR THE EUROPEAN PMI. SPREAD AT 152 POINTS
Eurozone businesses started the second half with robust growth albeit at a slightly slower pace than in June, aided by the loss of momentum in France and Germany. The final composite PMI for the eurozone by IHS Markit came in at 55,7 in July from 56,3 in June and compared with a first estimate at 55,8. However, the result has been above the threshold of 50, which separates contraction from growth, since mid-2013.
The Eurozone economy continues to grow at a rapid pace and will maintain this pace also in the next quarter. This was stated by the ECB in its monthly bulletin: “The generalized and consolidated economic expansion continues in the euro area, driven by domestic demand. GDP continued to grow in the first quarter of 2017 compared to the previous one driven by the improvement in domestic demand and, to a lesser extent, by changes in inventories". The central institute reaffirmed its commitment, if necessary, to increase the extent and duration of the quantitative easing.
Rates drop in Europe. The Italian secondary closed the session recovering the slight drop recorded in the first part of the day. The yield of the 10-year BTP fell below the 2% threshold, to 1,98%, while the spread with the Bund was stable at 152.80 (-0,07%).
The ten-year German benchmark rate fell to its lowest for the month, 0,456%, in the wake of the British government bonds, after the BoE meeting, whose message was interpreted as slightly more dovish than expected. Yesterday France and Spain made moves on the primary market. Paris with the placement of 6,5 billion euros on three OATs, and Madrid with the assignment of 4,122 billion on three nominal bonds and one indexed one.
UNICREDIT SUPERSTAR DRAG THE LIST: BANKS+3%
The flight of Piazza Affari is linked to the formidable leap of Unicredit (+7,2%) to the highest since May 2016. The institute beat expectations in the second quarter (net profit of 945 million euros) thanks to lower loan loss provisions, cost containment and strengthening of the commercial activity in the main business areas. The Bank has confirmed that it will pay a cash dividend on the 2017 results. Jean Pierre Mustier specified that for 2017 he expects a Unicredit cash coupon equal to 20% of the normalized profit. The Transform plan provides for a payout of between 20% and 50% starting from the 2017 budget.
As regards the possible sale of the stake in Mediobanca, Mustier specified that Unicredit will not be able to sell its 8,68% of Mediobanca (which in turn owns 13% of Generali) until market values (about 8,9 euro) will be under 10,1 euro load.”We are happy to remain shareholders, we support the management – he added, specifying, however, that “it is a purely financial participation”.
The Italian banking sector rose by 3%, against +0,27% in the sector's Eurostoxx. In the wake of Unicredit, Mediobanca had a positive session (+1,4%). Ubi is also advancing (+1,7%). Intesa closes unchanged. B for Bank +1,9%. The bank closed the first half with a net profit of 119,1 million euro affected by "significant non-recurring items": the write-downs on the share of the Atlante Fund for an amount of 61,5 million and the badwill generated by the acquisition of Nuova Carife equal to 130,7 million. An extraordinary intervention on provisions is being analysed, to be carried out at the beginning of 2018, for a gross amount in the order of one billion.
Generali stable (+0,13%). Kepler Cheuvreux reiterated the Buy recommendation, raising the target to 18 euros from 17 euros. More cautious Credit Suisse, which brought it to 16,50 euros from 15,70 euros. Neutral judgment confirmed. Following closely with upward adjustments of the target price: Banca Imi, Dz Bank, Natixis, Macquarie.
HURRY STOP FOR POST. TELECOM MARKS THE PACE
Sharp slowdown of Poste Italiane (-2,8%) after the release of the quarterly. Among the industrialists, Ferrari (+2,34%) stood out, recovering almost all of the sales on the eve of the day, as a result of the disappointment at the lack of upward revision of the 2017 targets. Fiat Chrysler +0,8%. Stm (+1,1%) and Buzzi (+1,6%) were positive. Prysmian is down (-1,7%).
Telecom Italia falls (-0,1%). The market awaits concrete indications on the hypothesis of the network spin-off and possible sale of Brazil. Governance issues also matter. The separation between infrastructures and operators increases efficiency and therefore should be applied where possible, said Economy Minister Pier Carlo Padoan yesterday.
ATLANTIA LANDS AT BOLOGNA AIRPORT, AGAIN PRELIOS SALE
Ynap did well (+1,5%) after the quarterly: Citigroup and Kepler Cheuvreux confirmed their buy rating. Ferragamo +1%. Atlantia advances (+0,8%). The society yesterday bought 164% of Bologna Airports for 29,38 million (+10% to 15,43 euros per share). The decline in interest rates favors the rebound of utilities. Enel rises by 1,2%. Terna +0,9%. Campari, on the other hand, falls -1,8% after the results.
Prelios is up about 4% to 11,72 cents, above the new price announced by Burlington at 11,6, which equals that of the Chinese Cefc's offer. The new contract signed by Intesa SP, Unicredit, Pirelli and Fenice does not provide for the possibility of withdrawal for sellers.
Safilo -2,07% after results in line with expectations. The management spoke of weak orders in the summer months but of an expected recovery from September thanks mainly to the new Smith and Dior collections.
