S&P RETURNS SPAIN. IMF APPEAL ON GREECE. TODAY TREASURE IN THE FIELD WITH BTPs. FIAT UNDER MOODY'S FIRE
Standard & Poor's cut Spain's rating by two notches from BBB+ to BBB- while also maintaining a negative outlook: a further demotion would drop the Bonos into the junk bond category. The decision, according to a note, is motivated by fears linked "to the deep recession which limits the options available to the government". The agency warns against "growing social unrest". The euro slipped to 1,2870.
Asian stock exchanges felt the pinch after the rating agency's move, albeit predictable. Tokyo lists lose 0,63%. Hong Kong rises +0,24% but not Shanghai. Beijing's decision to desert the IMF meeting in Tokyo in protest against Japan is also worrying.
Meanwhile, from Tokyo comes the warning of the director general of the IMF, Christine Lagarde: Europe must give Greece more time, or else disaster. Other alarm signals: 12 billion euros have flowed from Italy in 235 months. In particular, according to the document of the Fund, "capital flight from Spain amounted to 296 billion euros, 27% of GDP in 2011, and that from Italy amounted to 235 billion euros, 15 % of GDP". It is in this climate that the Treasury auctions continue according to schedule.
Yesterday's auction of 11 billion BOTs saw yields rising for the first time since August but still lower than those expressed by the secondary market. A good result in a delicate moment for European balances, also given the quantity of paper on offer.
The German auction went better: 3,112 billion Bunds were placed over 5 years at a yield of 0,53% from the previous 0,61%. As usual, the issuer preferred not to place the entire amount on the market (4 billion) in order to take advantage of low yields. Attention now shifts to today's auction of medium/long-term BTPs for a maximum amount of 6 billion.
The reaction of the spreads was in any case composed, the 10-year BTP is trading at a yield of 5,07%, flat, spread at 358 points from 361 at the previous closure. On Wall Street indices down: Dow Jones -0,95%, S&P - 0,63, Nasdaq -0,45%.
Economic activity in the United States showed "moderate expansion" and growth that "continues at a modest pace". This is what we read in the Beige Book, the report on the American economy that the Federal Reserve publishes every six weeks and which arrives just over ten days before the next meeting of the FOMC, the monetary policy arm of the Fed, on 23 and 24 October . Consumer spending 'remained unchanged or rose slightly', while the improvement in the residential property market continued. The conditions of the manufacturing sector are also contrasting, 'but somewhat improved', while 'employment conditions have changed little' compared to the previous report.
Cala Alcoa -3%, dragged down by the growth estimates of world aluminum consumption due (above all) to the slowdown in China. YumBrands climbs 8,5%, leader of "low-cost" restaurant and fast food chains, including Taco Bell and Kentucky Fried Chicken, after the company announces third-quarter profit up 23% to 99 cents . The picture emerges from the Wall Street quarterly reports of an America still halfway through the ford, far from confident that the recovery will last.
Facebook loses 3,3% and returns below 20 dollars (19,57 dollars) after the Bloomberg agency published a long investigation summarizing the clashes that preceded the placement of the shares on the market. For three months, from February to May, SEC officials were engaged in an exhausting back-and-forth with the social network's management and its legal advisors, who were very vague about business developments. The doubts of the SEC, which has no power in determining the price of the IPO, have not prevented Facebook and the placement banks from setting a price of $38 per share, equal to 107 times the expected earnings for 2012, of Marck Zuckerberg's company the most expensive stock in the S&P 500 index: since then Facebook has fallen by 48%.
All the European stock exchanges were in red at yesterday's close. In Milan, the FtseMib index fell by 0,6%, Frankfurt -0,3% on a par with London, Paris -0,4%, Madrid -0,9%. Concerns about the euro zone and the prospect of weak quarterly results are also weighing down equity markets, after the Monetary Fund revised downwards its forecasts for global growth for this year and for 2013.
In Piazza Affari, the rise of Impregilo stands out +3,1%, after the Brazilian Primav Construçoes increased its offer for the purchase of Ecorodovias bringing it to 19 reais per share from the previous 17,90 and on the hypothesis of the payment of a penalty for the failure of the order relating to the Messina bridge. Sufficient news to compensate for the indictment of Pietro Salini and general manager Massimo Ferrari on complaint presented by the Gavio group. Impregilo would have been sacrificed to Salini in a tender in Romania.
Atlantia -1,8% and Terna -1,6%, both cut to sell from neutral by Citigroup. Snam -0,5%, Citigroup confirmed the buy opinion. Positive Eni +1,1% after yesterday evening oil jumped 3%. WTI American crude is traded at 93 dollars a barrel (+0,7%), Brent at 114,5 dollars, both down by 0,1%. Ferragamo +2,6% and Ansaldo +1% also went against the trend.
Fiat turned higher after a difficult morning: Moody's downgraded its rating to BA3 from BA2. “This is not the time to sign any more trade deals,” Marchionne said. "The one with Japan is now on the table, but there are others." A free trade area between the United States and Europe "would help us a lot," added the CEO. “But it wouldn't be useful” to other European producers. "It wouldn't help the balance." In the evening Marchionne slipped on a banana peel. In replying to Matteo Renzi he called him mayor of "a small and ugly city".
Pirelli also reversed its initial losses and rose by 0,4%. Camfin recovers +0,3%. Camfin's board of directors was adjourned to tonight at 18pm. The Malacalzas were present yesterday. The meeting lasted less than an hour and ended around 18,45pm. On the table is the resolution relating to the bond convertible into Pirelli shares, the Prelios question and the examination of the summons presented yesterday by the advisers of the Malacalza family against the August resolutions on the bond issue. The reasons that made it necessary to update the works are not known.
Among the other industrial stocks, Prysmian falls by 0,5%, Finmeccanica falls by 0,7%. Banks in decline with Unicredit falling by 1,7%. UniCredit's Corporate Governance and Appointments committee has finalized the proposal, which will be submitted to the next board of directors, scheduled for October 18, to appoint director Luca Cordero di Montezemolo as vice-president of the company, replacing Khadem Al Qubaisi (Aabar ) who presented his resignation a few days ago. This is what can be read in a note released by Unicredit at the end of the meeting. The note announces that the same committee has defined a proposal, again to be submitted to the board of directors on October 18, for the cooptation of a new director of the company in the person of Mohamed Ali Al Fahim, current head of the Finance division of International Petroleum Investment Company (Ipic), an investment company wholly owned by the Government of Abu Dhabi and parent company of Aabar.
Intesa -0,6%, MontePaschi loses 3,3%, Popolare Milano -0,8%. Unipol +2%, Fondiaria Sai -3,6%. Among the mid and small caps, italcementi -4,5% and Saras -2,4% fell sharply. “Yesterday we sent our offer again to President Bernabè for La7 offering 150 million euros. We want La7 and we will do everything to get it": word of Alessandro Proto of the homonymous investment company who, however, asks for "a non-disclosure agreement".
