In anticipation of the governors' meeting in Jackson Hole, the initiatives of the anti-recession majors are multiplying. The White House, according to the Washington Post, intends to temporarily cut payroll withholding taxes. China tonight announced it was cutting its one-year benchmark interest rate on loans to commercial banks to 4,25% from 4,31% previously (analysts had expected 4,24%). In the meantime, the Bundesbank has launched the recession alarm and, for the first time, the Finance Minister is open to a robust expansionary manoeuvre.
THE BOSSES OF WALL STREET: IT'S NOT JUST THE SHAREHOLDERS THAT MATTER
But the most significant news of the day does not come from central banks: 181 companies of the Business Roundtable, an association that brings together the CEOs of major American companies including Amazon, JPMorgan and BlackRock, signed a declaration in which they affirm that "satisfying shareholders does not will no longer be the only priority of companies, but employee well-being and environmental impact will also have to be considered”. A demanding declaration, in open contrast to the dominant trends, starting from the resistance of the Bigs to pay taxes But also the signal that the hegemony of the message of Trump and the sovereigns encounters serious obstacles.
PROTESTS IN HONG KONG, NEW CUTS FOR AUSTRALIA
Against this backdrop, the markets are about to experience a hot day that will culminate in the D day by Giuseppe Conte, at 15 pm in the Senate.
This morning, the Chinese stock exchanges welcomed the rate cut already discounted yesterday without too much enthusiasm. Shanghai and Shenzhen shares rise by 0,1%, Hong Kong is at parity,
Nor does the Hong Kong governor's openness to dialogue with the demonstrators arouse enthusiasm: today there will be a new demonstration while Facebook and Twitter have suspended hundreds of accounts which are believed to be an emanation of the Beijing government.
The other Stock Exchanges are advancing in the wake of Wall Street. Japan +0,5%, South Korea +0,6%) and Australia +0,9% rose.
The dollar-yuan exchange rate rose by 0,2% to 7,07 from 7,05 the day before. The yen, which fell for three consecutive days, appreciated slightly to 106,5.
The Australian dollar weakens, to 1,47, after the publication of the minutes of the last meeting of the Reserve Bank of Australia: the bank's leaders are determined to further cut interest rates, if the conditions arise. Australia's 0,94-year bond weakens 3%, +XNUMX basis points.
The 1,59-year US Treasury Note strengthens again, to 1,61% yield, from XNUMX% at the close.
S&P UP 1,2%. FLY ESTEE LAUDER
Lively Wall Street yesterday galvanized by the news that Huawei will have 90 more days to buy US products and technology, before the embargo. The news of the meetings between Donald Trump and Tim Cook, the CEO of Apple +1,9%, to discuss tariffs was also appreciated: Dow Jones +0,96%, S&P +1,21%, Nasdaq +1,35, XNUMX%.
- In the semiconductor sector Nvidia rises by +5%. Advanced Micro Devices +3% after Piper Jaffray initiated coverage of the stock, assigning a Neutral rating, with a target price of $33.
- Another record for Estée Lauder: The cosmetics giant rises by 6,5% after the accounts.
- Brent oil is unchanged at 59,8 dollars a barrel, from +1,9% yesterday. The oil and oil service sector did well yesterday in Piazza Affari. Tenaris closed at +3,8%, together with Saipem +2,88% and Eni +1,79%.
TODAY GERMAN AUCTION AT 30 YEARS WITHOUT COUPON
The European stock exchanges also started the week at a gallop. In addition to the elements common to the entire global economy, from the expansive measures being studied by central banks to the improvement on the tariff front, two political factors contribute to fueling the rise. More and more evident signs are coming from Germany of a change of attitude towards a balanced budget: Finance Minister Olav Schalz said yesterday that there are 50 billion euros to spend, in the event of a worsening of the economic picture. Meanwhile, tomorrow the German Treasury will auction a thirty-year bond with no coupon, it has never happened in history that the zero coupon formula was used on this maturity.
BUSINESS PLACE FLIES DESPITE THE CRISIS
Even the Italian crisis, on the eve of Prime Minister Giuseppe Conte's communications, is less scary: early elections are no longer a given. The premier, according to forecasts, will deliver a speech of accusation against Salvini and will resign his mandate to the Quirinale, without the vote of the House.
- Piazza Affari is number one and gains 1,93%, returning to 20.715 points with all the blue chips in green: the political crisis, awaiting the intervention of Prime Minister Giuseppe Conte in the Senate, is not scary.
- After the opening of Wall Street, the other markets of the Old Continent are picking up speed: Paris +1,34%; Madrid +0,63%.
- Frankfurt +1,34%. The German economy could register a further contraction during the summer months, feeling the effects of the decline in industrial production due to the reduction in orders. The monthly Bundesbank report says so, indicating that the first economy in the eurozone has entered a recession.
BORIS JOHNSON REITERATES: OUT OF THE EU AT ANY COST
Outside the euro area Zurich +1,02%. London +1,04%. Boris Johnson has urged France and Germany to change their position on Brexit to negotiate a new divorce agreement between London and the European Union, reiterating his intention to take the United Kingdom out of the EU at any cost, even in the absence of agreement. In the event of a no-deal exit from the EU on October 31, the British government has announced that it will "immediately" put an end to the free movement of people.
BTP AT 1,44, THE SPREAD AT 207
The appetite for risk is back, yields on the bond market are strengthening. In a session of thin volumes, yields are driven upwards by the sharp rise in the thirty-year rate, the decline of which in line with that of the Bund of the same duration is the largest since 2017.
In the finale, the closing is positive: the yield of the 10-year BTP is 1,44% after having reached a maximum of 1,50%; the differential with the Bund of the same duration decreased by 0,3% to 208 basis points.
Next year's maneuver will have to contain a reduction in taxes, which to a small extent will inevitably have to be implemented in deficit. This was stated by the president of the Budget commission, the Northern League supporter Claudio Borghi: “We must carry out a reduction in taxes. It is obvious that a small quota must be made in deficit. It's not that terrible."
GOOD FOR THE BANKS, SPRINT OF BANCO BPM
On the shields the European banking sector dragged by the rise of Deutche Bank +2,8% and HSBC +1,5%, strongly interested in the Chinese market. In Milan (+1,90% for the sector), Banco Bpm +2,3%, Unicredit +2,6%, Intesa Sanpaolo +2% shine.
CNH AT THE TOP CONFINVEST STILL IN THE RALLY
The blue chips are all in positive territory. In the lead stands Cnh Industrial +5%. Morgan Stanley has upped their rating to Overweight. The rest of the automotive sector is making progress: Fiat Chrysler +2%, Pirelli +2%. Brembo +1%. Well Stm in the wake of the Nvidia rally on Wall Street. Prismian +3,2%. Tim +2,2% and Atlantia +3,4% also rose. Mediaset, on the other hand, is holding back -1,67% after last week's sharp rises.
In the rest of the list:
- Confinvest's rally continues, rising by 22,6% to 3,63 euros. The share price of the leading company in the trading of coined gold has more than doubled since the first quotation, which took place on 1 August at 1,50 euros. The increase in the title was equal to 147%. The shares traded yesterday totaled 203 thousand. From today, orders without a price limit will not be accepted.
- Stop for Technogym -1,19%. Berenberg reduced the rating to hold from buy, target price reduced to 10,5 euros from 12.
- Renergetica +2,8% consolidates its presence on the Italian market with the start of the authorization process for the construction and connection of 5 photovoltaic plants with a total power of 30 megawatts.
