DRAGHI DISAPPOINTS THIS TIME: BANKS AND BTP TRY TO REACT. SPOTLIGHT ON US EMPLOYMENT. STILL DOWN THE CRUDE
After the downpour of selling on European stock markets, disappointed by the failure of the ECB to launch the European QE, the markets open higher in Europe and remain mixed in Asia. The volatility rate remains high. On several fronts.
This morning the Hoing Kong Stock Exchange reopened its doors, where the protest shows no signs of abating. The index closed down again -1,36%. The squares of Shanghai and Shenzhen are still on vacation, but the PMI services confirms the slowdown in Beijing's economy. Weak Tokyo -0,34%.
Flat closing on Wall Street: Dow Jones and S&P 500 almost still and the Nasdaq was up 0,18%. The wait is focused on the labor market data, the non-farm payrolls, the most followed by the chairman of the Fed Janet Yellen: appointment at 14 pm, Italian time. Sensational admission by Jp Morgan: in August, hackers violated 73 million private current accounts plus another 7 million small and medium-sized companies.
The drop in oil continued: the WTI trades at less than 90 dollars a barrel. The drop since the beginning of August is more than 20%. The energy stocks are crying: Eni -3,82%, Saipem -3,72%, Tenaris -4,55%. But the most delicate game concerns the stability of the European markets. Will the Piazza Affari dam be able to hold up after the beating of Black Thursday? Or with yesterday's correction, have we entered an autumn marked by the Bear?
The reaction of the stock exchanges to Mario Draghi's press conference was violent but after closing down by 3,9% Milan opened up as did the other European stock exchanges. The deep red of Madrid (-3,1%), Paris (-2,8%), Frankfurt (-1,9%) and London (-1,5%) today gives way to rebounds on all squares. The euro rose again, albeit slightly, to 1,265.
BTPs HOLD ON, BUT PIONEER HAS ALREADY LIGHTENED
The yield of the 10-year BTP rose slightly to 2,32%, from 2,28% yesterday. the spread between the Btp and the Bund rose to 144 during Draghi's press conference, to then settle just below at the close, widening compared to the 138 points of yesterday's close.
Confirming that moods have changed is the testimony of Tanguy Le Saout, head of European fixed income at Pioneer. Pioneer Investments, a UniCredit group, sold Italian government bonds last month on a bet that the ECB will not start buying sovereign bonds to jump-start the recovery.
This said Tanguy Le Saout, head of European fixed income at Pioneer. “We are short on the periphery now, especially on Italy. We started exiting Italian government bonds a bit before the previous ECB press conference and right now during today's one,” he explained.
However, the correction could be short-lived: it is unlikely that the ECB will be able to avoid recourse to QE in 2015, many managers reason. “With the purchases of ABS and covered bonds alone – claims Alessandro Giansanti of ING – Draghi will not be able to achieve that enlargement of his balance sheet to the desired figures”, that is, approximately one thousand billion, 50% of current values.
After the disappointment, in short, we will return to betting on anti-crisis measures.
EUROPE, "THE RECOVERY IS WEAK, FRAGILE, UNHOMOGENEOUS"
There is no European Quantitative Easing at the moment. However, the ECB has given the green light to the ABS (Asset backed securities) and covered bond purchase programs which, together with the series of special financing operations for banks (TLtro), will have the task of facilitating the disbursement of credit and ultimately, to accentuate the expansive nature of the central bank's current monetary policy.
“These measures – reads the ECB statement – will have a considerable impact on the Eurosystem's balance sheet and will help bring inflation back close to the 2% level”. The two programs will start in the fourth quarter of 2014 and will last at least two years. The size of the purchases, Draghi said, will reach up to 1.000 billion euros.
The disappointment of the markets was palpable and, at least in terms of scale, surprising. It is clear that stock markets hoped that the recent wave of negative news on the growth and inflation fronts would prompt the Governing Council to accelerate expansionary measures. On the contrary, Draghi said he expected a moderate recovery as early as next year, while acknowledging, however, that the recovery in the euro area is weak, fragile and uneven”, said the ECB president.
BANKS IN BROKEN. BUT WEDDING AIR AMONG THE POPULAR
In Piazza Affari the massacre of the sector was general: Intesa -5,5%, Monte Paschi -5,08% and Unicredit lost 5%, despite Blackrock returning to 5%. Mediobanca -3,91%.
Banco Popolare did worst of all -6,19%. CEO Pierfrancesco Saviotti said he was confident about the results of the Aqr. “Our numbers are clear and unambiguous. Then, nobody knows how the ECB will evaluate the numbers”. The other securities in the category also suffer: Bper -5,87%, Ubi -5,14%. Bpm -4,25%.
The “ballots” of the Asset Quality Review are approaching (the examination for Italian banks will begin on Monday), the consolidation of the sector is once again topical. Yesterday, in a Uilca conference that had some of the big names in the sector as protagonists, the CEO of Ubi Victor Massia offered himself as an aggregator pole. Pier Francesco Saviotti, CEO of Banco Popolare, has hoped for a marriage with the Popolare di Milano. In turn, the CEO of Piazza Meda, Giuseppe Castagna, made it known that if there should be a phase of aggregations, the popular will play his part.
TELECOM: DEBT DOWN TO 25 BILLION AT THE END OF THE YEAR
Telecom Italia loses "only" 2,81%. The CEO, Marco Patuano, has ensured that at the end of the year the debt will fall below 25 billion euros, "considering the effect of the convertible loan immediately". In November of last year, Telecom Italia issued a 1,3 billion euro convertible loan, maturing in November 2016.
Patuano also declared that no capital increase is planned, not even reserved, resisting the advances of Naguib Sawiris ("if you want to buy on the market, take a seat") and reiterating that he had not had contact with the Mexican tycoon Sol Trujillo, architect of the Adriano plan, i.e. the purchase of a significant position in Italian society thanks to capital from the Gulf countries.
The utilities are heavy, after the disappointment of the ECB. Enel loses 3,86%.
FIAT, THE INCREASE WILL NOT BE DONE. FINMECCANICA, THE WORST STOCK
No capital increase in sight not even for Fiat, assured Sergio Marchionne at the Paris motor show. The 2014 guidance remains, for now, confirmed: we will discuss it again on October 30, after the approval of the third quarter accounts. Things are much worse at Finmeccanica -6,44%, which takes the black jersey for the day.
Standard & Poor's revised the holding's outlook from stable to negative due to below-expected financial results (BB+/B long-term and short-term rating confirmed).
Meanwhile, it is a two-way race between Japan and China to conquer the transport hub of the Italian group. The Chinese-American consortium of Cnr-Insigma is ready to put 1,5 billion euros on the plate for Ansaldo Breda and 40% of Ansaldo Sts, but first the recapitalization of 300 million euros of Breda will be required by the seller. Hitachi's offer is more complex, linking the price to Breda's results for the first and third year.
ZALANDO CRUSHES YOOX, KEEPS GTECH
Yoox dropped 5,45% to 16,66 euros, penalized by the drop in Zalando, the online clothing retailer, which in Frankfurt lost 14,92% to 18,35 euros, falling below the IPO price (21,5 ,3,15 €). Wdf also lost 8,925% to XNUMX euros while awaiting the conference call in which the update to the industrial plan and news on the new managing director following the resignation of Josè Maria Palencia should be presented.
Contains losses GTech -0,8% after announcing a substantial buyback program that should reduce the execution risks of the IGT acquisition.
