Donald Trump has pressed the red button. The United States has imposed since midnight Washington time, duties of 34 billion dollars out of 818 import products from Beijing. The president himself, speaking in Montana, threatened new sanctions if China reacts by hitting 25% tariffs on all trade with its Asian partner, equal to 500 billion dollars a year. It is probable that already today China will respond with equally harsh measures against, in the words of the China Daily, "that gang of thugs who are harming the rest of the world, starting with China". Yesterday, in a frantic rush, the last ships loaded with US soybeans unloaded the goods in Chinese ports, before incurring the reprisals in effect today.
TRUMP THREATENS NEW DUTIES. BEIJING: HE'S A THUG
Thus begins the vicious circle also feared by the Federal Reserve. As emerges from the reading of the minutes of the central bank in the last meeting the bankers underlined how the uncertainties on the commercial policy could harm an otherwise solid economy. "Several companies - reads the minutes - have expressed concern about the possible negative effects of tariffs and other trade restrictions".
"Both in the United States and abroad - writes Jerome Powell - some investments have been delayed or decreased due to uncertainty". But the opinion of the hawks seems to prevail in the US administration. At least with regard to Beijing because, for now, there is a clearing up with Europe, at least for the car. The markets try to absorb the news, taken for granted but still indigestible.
TOKYO STOCK RISE, SHANGHAI HOLDS
Chinese stock exchanges closed the morning session down by .3%. But in the afternoon, once the possible agreements on the car were confirmed, the increase was revised.
The Japanese stock market advances: Toyota and Honda gain one and a half points, dragging the Nikkei (+1,1%) upwards. The Korean Kospi also recovers, thanks to the leap forward by Hyundai (+2,9%).
STOCKS RISE, OIL SLOWS DOWN
Oil slows down: Brent -0,1% to 77,20 dollars, Wti at 72,85. US crude stocks grow surprisingly. The stock increased by 1,25 million barrels, compared to the drop of about 5,2 million expected by analysts and the 4,5 million decline in the API data.
But tensions remain high: the US Navy has announced that it will not allow Iran to close the Straits of Hormuz in response to the embargo on crude oil.
In Milan, Eni (+0,4%) announced that the Mellitah Oil & Gas joint venture has started production of the first well of the Bahr Essalam offshore plant in Libya.
MINUTE FED AND INSPM DATA LAUNCH WALL STREET
Last night WallStreet closed the day well up with the three main indices: Dow Jones +0,8%, S&P500 +0,9%. Nasdaq100 +1,1%.
The purchases were justified by the excellent indications from the non-manufacturing ISM index which rose to 59,1 points, better than the 58,3 expected.
AIR DIA CCORDO: FLY THE CAR
Breaking the curtain of bad news on the trade front came the news of a possible agreement to avoid the increase in US tariffs on European cars. According to Handelsblatt, US Ambassador to Germany Richard Grenell said in a meeting with German automakers that he was asked by Washington to reach a solution between Berlin and Brussels on car tariffs. Chancellor Angela Merkel immediately said she was in favor of lowering European duties on car imports, but the cut should not only concern the United States, but also other countries; otherwise, she stresses, the plan would not comply with WTO rules.
The announcement lifted industry headlines. In Frankfurt, the titles of the big protagonists of the meeting with the US ambassador took off: BMW +3,6%, Daimler +3,9% and Volkswagen +4,2%. The European Stoxx advanced by 3,4%.
FIAT CHRYSLER IN POLE POSITION
Even better in Piazza Affari Fiat Chrysler: +5,8% to 17,15 euros also thanks to the Jefferies "buy", with the target price going from 20 euros to 21 euros. Exor (+1,95%) and Ferrari (+1,5%) were also strong, together with Pirelli and Brembo, respectively up by around 1,6% and 0,9%.
The mere news of concrete negotiations with the participation of the major German automakers has revived the euro and the European stock exchanges. An agreement with America, which will in any case still require some time, would be a great tonic for the European cyclicals and, according to Alessandro Fugnoli, could give the stock markets a 5% recovery. Futures on European stock exchanges are positive this morning, gaining half a point before the opening of today's session.
The increase in orders for the manufacturing sector in Germany, which grew by 2,6% on a monthly basis, contributed to dispel the ghosts of the crisis.
BUSINESS CENTER CLOSE TO 22 THOUSAND ALTITUDE
The positive tone of the Frankfurt Stock Exchange (+1,4% in the morning) triggered a series of increases throughout Europe. In the afternoon the push was partially exhausted (Dax index +1.19% at the close) after the cut in the IMF estimates on the German economy: GDP will rise by 2,2% from the +2,5 indicated in April.
Milan closed up by 1,05% at 21.914 points after temporarily crossing the barrier of 22 points during the session (high at 22.040).
Madrid (+1,11%) also lengthened its pace. In positive territory, albeit to a lesser extent, Paris (+0,84%) and London (+0,4%).
THE SPREAD RISES UP, BTP 10 AT 2,73%
Sitting in letter instead for the debt market. The spread on the 243-year bond closed at 246 after reaching a maximum of 10. The yield on the 2,73-year BTP rose to XNUMX%
The prospect of a clash on tariffs between China and the USA has favored the escape from the assets judged to be more risky: the future on the German ten-year thus closed at 162,70 while the results of the French auction did not impress, but above all the Spanish one.
Sharp warning arriving yesterday from the president of the Bundesbank Jens Weidmann to the requests for greater flexibility of the accounts (see Italy): "Considering how high the public debt is already at the euro zone level, giving countries new possibilities to finance themselves is precisely what we should do".
RELEASE OF GENERALI, BANKS POSITIVE
Highlights on the Italian Generali list +2,1% which it launched the sale of 89,9% of Generali Leben in Germany, a company valued at up to one billion euros, with total expected revenues of up to approximately 1,9 billion. Banca Generali also performed well (+1,55% to 22,3 euros) after the analysts of a leading Italian business house lowered the target price from 30,5 to 27 euros, a level which is in any case higher than current stock market prices. The recommendation is confirmed as “outperform”.
Banks benefited from Italy's request to the EU to obtain a six-month extension of the Gacs, to encourage the Npl sales already started by various institutions in the second half of 2018.
In the afternoon, however, the sector reduced its gains: Unicredit +0,4%. The most popular stock was Banco Bpm (+2%). Mediobanca (+1,2%) has launched the placement of a guaranteed bond in euro with a six-year maturity.
GOOD MEDIASET, TIM-OPEN FIBER AGREEMENT TESTS
The time for a merger between Mediaset (+0,65%) and Telecom Italia (+0,31%) has "definitely passed", said Mediaset vice president and CEO Pier Silvio Berlusconi yesterday during the presentation of the schedules to the TV group. Berlusconi did not rule out a return to the dividend on the 2018 accounts, adding that advertising sales grew by 2% in the first half-year.
Of note in the Fininvest group is the performance of Mondadori (+3,0%). The CEO Ernesto Mauri said that the second quarter is very positive in terms of profitability.
On the other hand, the hypotheses of an alliance on the access network front between Tim and Open Fiber continue: according to some rumors, the vehicle for the operation will be Flash Fiber.
Positive notes coming from Stm (+3%), bounced back after the thud on the eve.
LUXURY STILL SUFFERS
On the contrary, the downturn in luxury continued: Moncler -1,6%. Ferragamo instead dropped 2,11%, at 19,93 euros, after JP Morgan lowered the target price of the stock to 19 from 20 euros, confirming the neutral recommendation. Analysts have updated their estimates and consequently the target price in view of the second quarter 2018 results which will be published on July 31st.
JUVE ABOVE 800 MILLION IN VALUE THANKS TO CRISTIANO
Also in the spotlight in Piazza Affari Juventus (+11,2%) on booming volumes (over 39 million Pasi shares at 3,94% of the capital) . The club accelerates in anticipation of the possible arrival of Cristiano Ronaldo. In the last three sessions, the stock has risen by 22%, the capitalization has gone from 665 million to 816 million, therefore around 150 million more: the purchase of Cr7 has already been financed.
