SALES AVALANG ON COUNTRY RISK CDS
THE BAGS ARE BREAKING. BUSINESS SQUARE GOES DOWN -0,7%
The Milan Stock Exchange, shortly after 12, abruptly reversed course, in line with the slowdown in Frankfurt -1,11%. The Ftse Mib index, which had reached a 2,8% increase, lost almost 500 points in just a few minutes: at 12 it was at 30 with a drop of 15.184%. At the same time, the spread with the Bund, which had fallen below 0,74 points, rose to 500. The tensions over the sovereign debt thus canceled the Monti effect for the time being. The prime minister in charge went up to the Quirinale to lift the reserve on the constitution of the new government shortly after 510. The list of ministers is expected shortly. The new government should then be sworn in in the early afternoon.
Despite the political "clearing up", the tension on the bond market still remains high. Investors prefer to buy the government bonds of the "core" countries (the yields of the 1,8-year German Bund and the respective US Treasuries remain at their lowest at 2% and 5% respectively) and buy CDS (policies for insure themselves against the default risk of a country): the news recently reported by Bloomberg that Jp Morgan Chase and Goldman Sachs would have sold 1,353 trillion dollars of CDS without however specifying the amount on the countries at risk (probably Greece, Ireland, Portugal, Italy and Spain). It was the fuse that ignited the market reaction. The euro recovers this morning's losses and is stable against the dollar, the exchange rate is set weak at XNUMX, in line with last night's close.
In Milan, bank stocks are slowing down. Unicredit -1,22, Intesa -0,74%; the exception is Ubi +1,22%. MontePaschi +2,2%. Good Azimut +1,99%, Mediolanum loses 1,45%.
The shares of Banca Popolare di Milano collapsed, down by 12,49%. The new shares deriving from the capital increase will be available on Monday.
Finmeccanica still down -2,07% after yesterday's 20% drop. Safilo rose by 5,2% after the now obvious announcement that its Armani license will not be renewed. Luxottica also rose +0,52%, which will most likely be the new licensee. Campari continues to fall -4,16%, after the announcement two days ago of disappointing data. Enel fell by 0,95, the other utilities balanced: Telecom Italia +0,06%, Terna unchanged and Snam -0,18%. Fiat loses 0,74%, Fiat Industrial +0,73%, Pirelli -0,80%
