Filmed by the TVs, the flames rise in the courtyard of the Chinese consulate in Houston, Texas. The documents that Beijing's diplomats destroyed before leaving the city, home to many leading technology companies, are on fire. The scene could soon repeat itself in Wuhan, the martyr city of Covid, from which US officials could already be expelled today. The US Justice Department has formally accused two Chinese hackers of conspiring with Beijing intelligence to steal trade secrets from more than a dozen US companies active in various sectors, including defense and health care.
Under the skies marred by Covid-19 (yesterday more than a thousand dead in the USA), the Cold War between the two superpowers is taking off: the Asian markets suffer, less the American ones, fascinated by the light of Tesla. Yesterday Elon Musk's creature fully earned entry into the S&P 500 index thanks to the fourth consecutive quarter closed with exceptional profits: the stock rose by 5% in the aftermarket thanks to profits of 108 million dollars, against the accounts in the red expected by analysts. The trend in revenues is even more surprising: in a period of partial production shutdown of the Californian plants, they fell by only 3%, to 6,04 billion dollars. The consensus expected five billion.
The lists reflect the different sentiment: Tokyo's Nikkei -0,6%, Shanghai Composite -1,2%, Seoul's Kospi -0,7%; the S&P ASX200 of Sydney (+0,2%) and the Hang Seng of Hong Kong (+0,3%) were positive. The Mumbai Stock Exchange opened on parity.
BAD SLIP OF THE KOREAN ECONOMY
The Asia Pacific area is held back by the heavy fall of the Korean economy: in the second quarter the sequential decline was 3,3%, worsening from -1,3% in the first and against -2,4% forecasts. The country's central bank, which released the data, highlighted that it was the steepest contraction since 1998.
Wall Street futures are slightly positive. Yesterday evening the S&P500 gained 0,57%, fourth consecutive rising session: just over 3% to return to the all-time highs of February. The Dow Jones (+0,62%) and the Nasdaq (+0,24%) also rose.
Pfizer flies (+5,1%) after the White House announced the purchase of 100 million doses of vaccines that the US group will produce to defeat Covd-19. Cost of the operation: 2 billion dollars.
Microsoft lost about 2%, on disappointing quarterly accounts for cloud business.
Wall Street futures are slightly positive this morning. The advance of the euro against the dollar continues at 1,1568. Gold also strengthens.
SUPER EUROS. MA LAGARDE: “THE AGREEMENT COULD HAVE BEEN BETTER”
Buy on rumors, sell on news. The old adage always works: Eurozone stock markets, so off the adrenaline for the agreement on the Recovery Fund, yesterday they lost the grit of hot days, thanks to the rise of the euro. After the initial enthusiasm, moreover, the first regrets appear. “The agreement – said Christine Lagarde – could have been better” and had a larger share of non-repayable aid than loans. However, the race for the euro does not stop: the single currency extended its gains against the dollar yesterday, even rising above 1,16 dollars, the highest since mid-October 2018.
CDS ON ITALY RISK COLLAPSE, STOCK MARKET IN RED AFTER 5 RAISES
The Brussels accord has pushed the cost of insuring Italian sovereign debt against default to six-week lows. Italian five-year bond yields and credit default swaps (CDS) fell by around 100 basis points from April levels to around 160. A wide spread is a signal of risk.
The Milan Stock Exchange (-0,6% to 20.598) retreats after five consecutive rising sessions, a positive streak that brought it yesterday to the highest levels since the beginning of March.
THE COUNCIL OF MINISTERS LAUNCHES THE 25 BILLION MANEUVER
The Council of Ministers approved a budget slippage of 25 billion euros. The resources, states the government note, will be used to extend the redundancy fund; supporting businesses and sectors most affected by the economic crisis linked to the pandemic also "through a rescheduling of tax deadlines for the coming months"; restart face-to-face teaching in safe conditions.
WIRECARD, THE SCANDAL INVESTS THE GOVERNMENT OF BERLIN
Similar losses in Frankfurt (-0,59%), hit by the Wirecard scandal. Former CEO Markus Braun has been arrested for the second time, while requests are multiplying that the tapes of his conversations with representatives of the Finance Ministry directly reporting to Olav Schalz should be kept public.
VALEO SWAPS IN PARIS, HUAWEI EXCLUDED FROM 5G
In Paris (-1,32%) Valeo swerves: -5,08% after a loss of 1,2 billion in the first six months. Peugeot falls by 2,35%. The French authorities have notified telecom operators that they intend to purchase Huawei 5G equipment that will not be able to renew licenses once they expire, effectively excluding the Chinese company from the country's mobile networks.
Madrid -1,37%. London also lost 1,01% under pressure from oil prices.
BTP: THE RATE DOWN TO 1,04, SPREAD TO 154
After a morning without shocks, the BTP has resumed marching on the wave of the EU agreement on the Recovery plan. At the end of the session, the ten-year rate was in the 1,04% area, around the values at the beginning of March.
The yield differential with the German Bund with the same maturity does not differ much from the 154 on the previous day.
A Unicredit report indicates that tonight the Treasury could announce the renunciation of the mid-August auction.
JUDICIAL SHADOWS ON ENI, DIASORIN AND FCA
Markets were overwhelmed yesterday by fears related to Covid-19 infections which continue to hold up in various parts of the world. Some judicial investigations around the world involving various blue chips weigh on Milan.
Eni -2,49% after the request by the Milan prosecutors for 8 years in prison for CEO Claudio Descalzi and his predecessor Paolo Scaroni for international corruption in the trial on the Eni-Shell-Nigeria case, with an alleged bribe at the center of one billion and 92 million dollars paid by the two oil companies to the politicians of the African country.
FCA (-0,86%) grappling with the dieselgate scandal. The Guardia di Finanza of Turin has searched some of the group's companies in agreement with the Frankfurt prosecutor's office, which is investigating for commercial fraud. The hypothesis is that devices that do not comply with European regulations have been installed on some models. The group consoles itself with the Buy of Banca Intesa after the group announced that it has expanded its partnership with Waymo on autonomous driving technologies.
Finally Diasorin -2% around, penalized by theinvestigation announced by the Pavia prosecutor's office with the hypothesis of the crime of disturbed freedom of the procedure for choosing the contractor and embezzlement for the agreement stipulated between Diasorin and the San Matteo Hospital on the serological tests on Covid. The diagnostic company based in Saluggia reiterated the correctness of its work.
UNICREDIT SELLS TWO NPL PACKAGES
The issue of banking risk deflates. Unicredit CEO Jean Pierre Mustier reiterated that for Banca di Piazza Gae Aulenti the buyback remains the most effective option compared to mergers. The Bank yesterday sold two Npl portfolios for 1,5 billion. The stock closed with a cautious increase (+0,46%).
OPS UBI, THE ANTI-INTESA FRONT CRUSLES
Intesa Sanpaolo -0,3%. Consob has approved the supplement to the information prospectus of the public exchange offer on Ubi, after the increase in the consideration and the antitrust ok for the operation. The Patto dei Mille, which collects 1,6% of the capital of Ubi, has decided to leave its members the freedom of choice on joining Intesa's offer, says Reuters. In February, the Pact of the Thousand had expressed an opinion against membership. Yesterday, subscriptions to the public offer launched by Intesa on Ubi amounted to 8,488% of the capital covered by the offer, the Stock Exchange announced yesterday.
MOODY'S AWARDS BANCA MONTE PASCHI
Banca Mps, in particular, was well collected, up 6,3%. Yesterday Moody's placed the bank's ratings under observation for a possible upgrade following the agreement reached at the end of June for the transfer of 8,1 billion euros of gross non-performing loans to Amco. Since the beginning of the week, the share of the Banca di Siena has been gaining over 22%.
The interest in Banco Bpm is slowing down (+0,3%), while Bper retreats (-1,5%) after the recent run.
STM, REVENUES AND MARGINS RECOVER (+36%)
The quarterly accounts of Stm were released this morning, +0,76% yesterday. The group reported second-quarter net revenues of $2,09 billion; gross margin at 35,0%; operating margin at 5,1%; net income of $90 million. For the third quarter, net revenues are expected to be $2,45 billion and gross margin at 36,0%.
PRYSMIAN DOES BUSINESS IN CANADA
Among industrialists Prysmian rises (+1,3%) after the signing of an agreement for the acquisition of 100% of EHC Global for a value of 130 million Canadian dollars. According to Fidentiis, "from a strategic point of view, the agreement will strengthen Prysmian's positioning in a niche but in a business with high added value with a higher than average level of profitability and prospects".
ORDER FOR SAIPEM IN THE NORTH SEA
Saipem +0,5% on the back of new offshore wind contracts for projects under development off the coasts of England, Scotland and France for a total value exceeding 90 million euros. Equita points out that “the contract represents 1% of the estimated E&C order collection for 2020 and 3% of the offshore E&C division”.
Buzzi Unicem up 2,7% after UBS brought the target price on the stock to 25 euros from the previous 24 euros.
Tim -0,2%: Cdp has expressed its approval for the entry into the capital of Open Fiber of the London infrastructure fund Wren House, which, however, would have submitted an offer for Enel's share lower than that of Macquarie.
A2a +2,71. Exor (+1,65%) and Finecobank (+1,54%) advance.
IN THE SPOTLIGHTS IMA AND CERVED
Ima goes into orbit (+6%). Kepler has raised the recommendation from Reduce to Hold, bringing the target price from 46 to 53 euros. The company will communicate its quarterly results on August 7th. Cerved did well, jumping 6% after Kepler Cheuvrex raised the target price on the stock to 9 euros from the previous 8,1 euros.
