On the eve of Sunday's elections, Argentina is once again attracting the attention of the markets in view of the probable overtaking of Peronist Alberto Fernandez on Mauricio Macri. It is the fuse that could cause the Emerging sector to explode, already under stress from the violent protests that are sweeping Chile, a former happy island for investors. And not only. Reuters lists the crisis situations, the result of financial stress and worsening living conditions, affecting countries at risk: Hong Kong, Beirut, Cairo, Santiago, to name the most obvious cases. “What is happening in South America – reports Alessandro Fugnoli – the charge of anger that is brewing even where it is least expected. The markets do not seem particularly shaken by these events, but it is reasonable to think that the reaction of the elites will be to accelerate wherever possible the global reflation process that has already started for a year".
In short, in this context, the markets are accelerating thanks to liquidity injections, but they are once again fearing the consequences of a confrontation between the big names which, from being commercial, is becoming more and more political, as demonstrated by the violent attack by US Vice President Mike Pence on China, one “Police state the world has never known”. The agreement on tariffs, which will probably take place, will not end the conflict, therefore.
WASHINGTON ATTACKS NIKE, INTEL FLY
And yesterday Nike paid the price, accused by Washington of treason for having withdrawn the merchandising of the Houston Rockets, a basketball team, from the shelves after an executive via tweet had sided with the Hong Kong protest.
Hence the profit taking on the Asian markets, while Wall Street concentrates on the quarterly reports that record positive notes, such as the leap of Intel (+8%) after the accounts that reduce the fears on the slowdown of the chips fueled by the crash of Texas Instruments, but also sudden frosts: Amazon, after the Stock Exchange, fell by 9% after a quarter lower than expected. Revenue climbed to $70 billion, up 24% year over year, but profits fell to $2,1 billion, an unexpected drop of 26%. And the capitalization dropped by 80 billion dollars in just a few minutes.
And so the markets, after saying goodbye the departure of Mario Draghi, are on their way to celebrating the Fed's third rate cut, an almost foregone conclusion of next week's meeting.
All Asian stock exchanges in red after Pence's intervention. Hong Kong loses 0,5%, Chinese and Korean lists are also weak. The Nikkei was also down, the only plus sign being Sydney (+0,6%).
Uncertain but not far from Wall Street highs. The good performance of Microsoft (+2%) and other tech stocks limited the losses of some quarters: Dow Jones -0,11%, S&P +0,19%. NASDAQ +0,81%.
This morning, futures on European stock exchanges restart from the highs of the period marked yesterday.
pound in the balance. JOHNSON WANTS TO VOTE DECEMBER 12
The pound is still holding back: Prime Minister Boris Johnson on Monday will ask the British Parliament to support the early return to the polls on December 12th.
DRAGONS LEAVES, NEW QE COMES
“Unfortunately, everything that has happened since the September monetary policy decision has abundantly shown that our determination to act promptly was justified.” Mario Draghi resorted to irony to reply to the criticisms of the new QE, the legacy that the banker leaves to the Eurozone after eight years in which "I tried to respect the mandate in the best possible way". And so, as expected, the new purchase program (QE) announced in mid-September for 10 billion euros a month will start on November 20th.
The relative surprise came from the data on the manufacturing trend which shows that it is France that is keeping the area's economic activity out of the territory of contraction. Giuseppe Sersale of Anthilia points out that "a comparison between the German and French numbers (the first recovering by 1.8 and the other stable) and the Eurozone aggregate one (stable) tells us that the rest of Europe has seen in aggregate at least one point further decline".
MILAN AT THE HIGHEST FOR 17 MONTHS
Piazza Affari greets Draghi with an increase of 0,79%. The index moved to 22-527 points, for the first time beyond the 22.500 barrier in 17 months.
The Eurostoxx index (+0,5%) also rose to its highest level since June 2018.
Frankfurt gains 0,62%; Daimler climbed 5% on the day of the quarter's data release, operating profit rose 8%.
Paris +0,55%; Madrid +0,14%.
The Finnish Nokia crumbles after the publication of data for the quarter and the alarm on profit, -22% in Helsinki. London +0,98%.
The euro retreated against the dollar, with the exchange rate at 1,095, after rising to 1,115 in the session, in line with Draghi's words according to which the lower probability of a hard Brexit allowed an improvement in the situation in the euro area.
CTZ AUCTION TODAY, S&P RATING IN THE EVENING
The BTP closed the session higher, in line with the rest of the euro bonds. At the end of the session, the Italy-Germany spread fell to 131 points from 134.
The 0,91-year reference rate fell to 0,94% from XNUMX%.
Investors await S&P's pronouncement on Italy's sovereign rating ('BBB', negative outlook) tonight after the markets are closed.
Also on the agenda today is the auction of the new Ctz 29/11/21, offered for 2,5-3 billion euros. In the evening, the share on the gray market was quoted at 100,11 with a yield of around -0,05%.
The Treasury announced that it will offer 29 billion six-month BOTs on Tuesday 6,5 (against 6,6 in maturity).
Il new BTP Italy, in the institutional phase, 76% was subscribed by domestic investors. The total amount was 6,75 billion euro – 2,987 billion from retail customers and 3,763 from institutional customers.
STM AND SAIPEM SUPERSTAR, TODAY IT'S THE TURN OF ENI
Best stock of the main STM list which jumps by 8,5% after the better-than-expected third-quarter results thanks to the demand for more sophisticated chips destined for the automotive and smartphone sectors. In the last part of the year, sales should rise by around 5%, with a gross margin of around 38,2% (+/- 200 basis points), forecasts are slightly lower than expected.
Juventus is also booking a leap forward: the Juventus club and FCA have reached an agreement to increase the annual fixed payment of the Jeep sponsorship by 25 million to 42 million euros for the current and next seasons. The decision was taken "in consideration of the excellent sporting performance of the first team", reads a statement, and the increase in global recognition of the Juventus brand.
In the spotlight Saipem (+5,4%) after beating expectations in the third quarter with a leap of 26% in 'core' profits thanks to a solid order backlog higher than analysts' estimates. Equita underlines the numbers that confirm the improvements in terms of debt reduction and the indications that give greater visibility in the offshore sector.
MEDIOBANCA BEATS ESTIMATES AWAITING THE SHAREHOLDERS' MEETING
Mediobanca (+0,98%) also beat analysts' estimates: the accounts which showed in the first quarter of the 2019-20 fiscal year a 10% trend growth in net profit to 271 million euro, beating the estimates of consensus set at 250 million. This is Alberto Nagel's calling card on the eve of the shareholders' meeting in which Leonardo Del Vecchio will participate with an 8% stake. The CEO of Bper (-1,85%) Maurizio Vandelli, denied the existence of agreements with the shareholder Unipol in search of possible partnerships, including Ubi -2,88%. “The market – he said – enjoys playing the game of couples: sometimes with Banco Bpm and with Ubi and then perhaps Mps remains behind the scenes”.
Highlights under management: Banca Generali +1,6%, Azimut +1,2%. Fineco +1%. Poste Italiane +0,2%: by the end of 2020, the entire network will sell insurance policies of all types, except for motor liability.
FREANO TIM AND ATLANTIA
Telecom Italia down -0,8% with savings shares -1,5% doing worse than ordinary shares: it seems that there is no space to approve the conversion into ordinary shares by the end of the year.
Atlantia is down (-0,73%). Moody's has extended its review for a possible downgrade of the ratings of Atlantia and its subsidiaries Aspi and Adr.
Sias also fell (-0,3%), which increased its stake in two motorway concessionaires in North-West Italy, the A5 Turin-Ivrea and the A4/A5 Ivrea Santhia Turin Pinerolo with a total expenditure of 102 million euros .
SALINI'S ORDERS DOUBLED
Maire Tecnimont dropped 4,7% after nine-month results which saw a cut in revenue guidance for the year.
Ima (+3%): the CEO said that we will grow by favoring acquisitions.
Salini Impregilo +2%. Contracts won or in the process of being closed in the first 9 months amounted to over 6,9 billion euros, more than double compared to the same period last year. This was stated by CEO Pietro Salini on the sidelines of a meeting with investors.
