SPARKS ON ARTICLE 18: THE SPREAD JUMPS TO 300
CHINA, OIL AND USA BRICK, ALL TILES FOR THE BULL
Una quiet day", despite the disappointment for the data on the US housing market and the tensions on crude oil. With one exception: Milan. And not just because theFtseMi indexb suffered a 1,2% decline against the unchanged closures of London and Paris and with the 0,2% increase in Frankfurt.
The massive sales of government bonds by international operators brought back some fibrillation on the electronic circuits of the financial markets. The yield of the ten-year BTP it has risen to 4,97%, the spread is back to 300. In part, the "freeze" depends on the weakness of Spain: the yield on the government bond of reference for Madrid has risen by 16 basis points to 5,35%. The opportunity to unleash the sales was offered by a statement by William Buiter, chief economist of Citigroup, for which Madrid "is practically doing everything wrong".
But the reform of the labor market certainly also weighs in the assessment of the markets, experienced as the first real test for the Monti government. It is not just a question of verifying the resistance of the "technical" executive in the face of the opposition of the CGIL but, above all, the resistance in Parliament against the various mediations to water down a text which, as it stands, pleases the markets. He takes care of cooling down the tensions the boom of the BTP Italy now at 5,7 billion purchases, i.e. well beyond forecasts. The operation ends this afternoon.
Meanwhile, after dreaming of the big recovery, markets are realizing that the global economy is, at best, recovering but not vaccinated against relapses, as Ben Bernanke himself pointed out before Congress.
A Wall Street the S&P index fell by 0,02%, the Dow Jones by 0,4%, the Nasdaq stable at -0,04% also thanks to the performance of Linkedin +6,5% promoted by the buyout by Goldman Sachs.
Also contrasted sitting in Asia. The effect of Japan's unexpected trade surplus was modesta: the Nikkei index rose 0,40% almost unchanged (-0.03%) Hong Kong.
Three negative factors which have conditioned the markets on an international level:
1) Data on the US housing market are holding back Wall Street and are also affecting the European stock market: sales of existing homes fell by 0,9%, economists instead expected an increase of 0,9%.
2) Oil accelerated after the release of inventories in the United States noted by the Department of Energy: Crude inventories fell by 1,1 million barrels last week against an expectation of an increase of 2 million barrels. WTI oil futures are trading at $107,5 a barrel, up 1,3%. The market ignores Arab Oil Minister Ali Naimi's words that high oil prices are not justifiable and that his country is ready to increase production by 25% if necessary. Saudi Arabia could increase production by 2,5 million barrels equivalent per day.
3) There are new signs of weakness from the Chinese economy. This time it is the index of business purchases which has fallen to 48, at recession levels. For now, the authorities do not seem willing to counter the crisis with a more expansionary monetary policy. The first concern remains that of cooling down the real estate market.
Bad day for financial values, starting with Leo, Il title General -4,6% due to write-downs (Greece plus Telecom Italia) but also fears about future dividends conditioned in part by the put to be paid to Petr Kellner. However, CEO Giovanni Perissinotto said he was confident: “We have reached rock bottom. Now the ascent can begin. We are already seeing a recovery in the first two months of 2012. It will probably be a year of consolidation and rebuilding confidence in the market”.
Green light for creditor banks for Premafin debt restructuring plan (368 million), necessary to allow the company to approve the financial statements on March 30th. Banks are down, starting with Unicredit -3,2% and Mediobanca - 2,4%. Intesa Sanpaolo ,-1,8%. Against the trend Banco Popolare + 3,2% after having provided reassuring indications on capital solidity. The Milan Stock Exchange is also weighed down by Mediaset -4%, which fell sharply the day after the presentation of the quarterly data and the indications on the start of 2012. In no particular order are the industrialists: Fiat and Finmeccanica -1,1%, Prysmian -1,6%. Up Pirelli +0,8% and StM +0,6%.
