A corporate tax rate of 20% and a cut in that for natural persons (the rates would go from 7 to 3), with the possibility of raising taxes for the wealthy. Envisaged, but not yet defined, incentives for the repatriation of multinational profits. Here, in a nutshell, is the tax reform (just a nine-page draft, not a bill) presented yesterday by Donald Trump, looking for his first parliamentary success since his appointment.
It will not be easy to get there: Ronald Reagan, the last to introduce a tax reform, took years. And on Trump, who came out battered by the flop of health care reform, the unknown factor of Russiagate remains. Finally, the plan, which allows significant savings for the Trump family, provides few details on how to offset the cuts without increasing the federal deficit. But the project has restored good cheer to Wall Street: the prospect of tax cuts more than offsets the effect of the rate increase.
ASIA CAUTE, SMALL BUSINESSES RUN IN WALL STREET
The advance of the dollar, traded at 1,1717 against the euro and with a strong recovery also against the yen (-112,81 -05%), is the note that characterizes the forecast.
The Nikkei index rises in Tokyo (+0,3%). Lists in the Asia Pacific area are slowing down, put under pressure by the greenback. Shanghai/Shenzen -0,1%, Mumbai -0,1%. Hong Kong (-0,4%) suffers from Beijing's tightening on real estate values, but the online insurance company Zhong online has achieved an increase of 18,1% in its debut in the list of the former British colony.
The air of rises on the American markets: the prospect of rising interest rates has given a boost to financials. The promise of tax cuts has given wings to the Russell 2000, the small business index, up 1,92%, to an all-time high, and to tech stocks, the most favored by the tax rebate on profits accumulated across borders .
The Dow Jones rises by 0,25%, the S&P 500 index +0,41%. Best of all the Nasdaq, +1,15%. Highlights Goldman Sachs and Bank of America, with increases of more than 2%. The big names in technology are clearly on the rise: Facebook +2,11%, Alphabet +2,40%, Netflix +1,44%. Apple also rises (+0,7%). The Oscar, however, goes to Micron Technology: the chip maker scored an 8,5% rise on S&P tech after the quarterly.
Nike down -3,6%, the company recorded the slowest quarterly sales growth in nearly seven years, in light of intensifying competition from Adidas.
TWO-YEAR BOND YIELDS AT HIGHEST SINCE 2008
Worth noting is the sharp rise in government bond yields: the 2,326-year T-bond yields 2,23% from yesterday's 2%. The 1,47-year Treasury, the most sensitive to changes in monetary policy, returns 2008%, the highest since 1,26, two weeks ago it was XNUMX%.
Contrasted performance of oil: Brent slows down to 57,71 dollars a barrel from Tuesday's highs (59,49, a 26-month record), after the increase in US inventories: the refineries are back at full capacity after the damage from the hurricane Harvey. The US WTI crude trades at 52,11 dollars.
At Piazza Affari Saipem +0,7%, Eni -0,4%. Saras sale (+2,5%). Kepler Cheuvreux increased the target price to 2,5 from 2,3 euros and confirmed the 'buy' judgment after raising expectations on refining margins.
RECORD BUSINESS PLACE, COMPANY CONFIDENCE THROUGH THE STARS
A day of increases also for European lists, driven by the propellant of the weak euro and by the sprint of the banks. The spotlight today will be on the preliminary German inflation reading ahead of next month's European Central Bank meeting, when Frankfurt is expected to announce plans to phase out its asset purchase programme.
As always, the good performance of the banking sector gave Piazza Affari wings: the Ftse Mib index rose by 0,85%, to 22.622, a new high since December 2015. More modest increases for Frankfurt (+0,41. 0,25%) and Paris (+1,20%), despite the propellant of the merger between Siemens (+4,25%) and Alstom (+0,38%). Similar trend for London (+XNUMX%).
The most brilliant Stock Exchange was Madrid (+1,38%), driven by the hope of an agreement in extremis between the capital and Catalonia. The climate of consumer confidence in Italy is improving, reaching its peak since January 2016. The business index even leaps to its highest level since August 2007 (the month in which the subprime crisis began).
“This is probably the most encouraging element”, underlines Paolo Mameli, economist at Intesa Sanpaolo. "Both domestic and foreign orders are reported to be picking up, easing fears of a negative impact from the recent appreciation of the euro."
IN SIGHT OF RISE IN YIELDS AT THE BTP AUCTION
Closing down both for the Italian bond market and for other government bonds in the euro area, affected by the prospect of gradual tightening of the cost of US money. The looming round of long-term auctions at the end of the month is also weighing on the Italian map: today up to 6 billion in 5 and 10-year BTPs will be made available to investors together with a CCTEU.
Rates from today's auctions are expected to rise. At the end of the session, the August 2027 BTP, the ten-year benchmark, recorded a yield in the 2,22% area, while at the August auction it was assigned 2,09%. If the price is confirmed at auction, it would be the highest issuance rate since April. The rate of the 5-year BTP in August 2022, assigned at the end of August at 0,84%, traded at 0,87% yesterday evening.
Yesterday, however, the Treasury placed 6 billion six-monthly BOTs at a rate of -0,382%, a new all-time low, after the one marked by the CTZ at auction on Tuesday. The Btp/Bund spread stood at 175 basis points from 177 on the previous day.
FINCANTIERI LEASES 1% OF STX. LEONARDO IN THE SEA AIRBUS
Les jeux sont faits. Emmanuel Macron, dusting off his experience as an investment banker, pulled a solution to the Fincantieri-Stx puzzle out of the hat, anticipating to Le Monde the agreement later signed in Lyon with the Italian premier Paolo Gentiloni. Fincantieri (-0,36% after a robust rise in the morning) will take operational control of Stx France. The agreement provides that Fincantieri will acquire 51% of Stx, of which 1% in the form of a 12-year loan from the French. France has the right to take back the 1% stake under certain conditions but in this case Italy will be able to exercise a 'put' option and oblige Paris to take over its 50% stake at a fair price.
The French Minister of Finance, Bruno Le Maire, expressed confidence in the possibility of forming a naval group in the military sector of European scope, along the lines of what is happening in the railway sector with the announced merger between the French Alstom and the German Siemens. In the project of an Airbus of the sea, Leonardo will be "certainly" involved (+1,53%), said Gentiloni.
TELECOM, GOLDEN POWER ARRIVES TODAY
Among the issues under discussion between Italy and France there is also Telecom Italia (+1,45%). "Tim and Vivendi - said Prime Minister Paolo Gentiloni in response to reporters - are private companies to which governments ask to respect Italian laws and European rules". The statement comes on the eve of today's meeting of the Italian committee on golden power, which must assess whether Vivendi has violated the transparency rules on Telecom Italia's control. On Friday, the board of directors of the company will appoint the successor of Flavio Cattaneo: Vivendi intends to designate the manager Amos Genish as the new CEO.
CATTOLICA CAN BE BOOKED FOR BANCO BPM POLICIES
The great protagonists of the day, after Yellen's hawkish statements that pushed yields upwards, were the banks. The sector's basket rose by 1,9% (in line with the sector in Europe). Leading the race of the Banco Bpm sector (+4,2%). Cattolica Assicurazioni (+0,7%) yesterday presented a binding offer in the tender for the new bancassurance partner to the institute in Piazza Meda. Ubi (+3,9%), Bper (+2,9%) and Unicredit (+2,7%) also shine.
A 3,2% jump for Banca Intermobiliare, with above-average volumes. According to press rumors, a meeting of the liquidators of Veneto Banca was held yesterday evening to decide whether to assign the exclusive rights for the sale to Attestor or Barents.
YNAP NEVER STOP ANYMORE
Ynap is still in evidence in the luxury sector, which in the afternoon managed to gain up to 5,3%, to a new high for the year of 32,61 euros, to then close at +3,6%, with volumes slightly above the five-day average and double the average over 30 sessions. The title has recently seen some flare-ups on the stock exchange, also driven by M&A expectations. Yesterday, the start of coverage with a 'buy' by HSBC arrived in support of the prices, together with rumors of an interest from Kering.
BORSERO, THUD AT AIM. LESS COINS IN OVS
Ovs decreased after the placement at 6,53 euros with which Coin dropped to 17,8% of the capital. Alerion gains 4,5% and is close to the 3 euro at which Fri-El has announced a voluntary takeover bid.
Orsero loses more than 15% after announcing results well below expectations. The Italian group, one of the leaders in Mediterranean Europe for the import and distribution of fresh fruit and vegetables, has landed at Aim in combination with the Glenalta Food Spac, supported by Banca Aletti as a Nomad.
Flat debut always on Aim Italia by Spactiv, seventeenth Spac which was listed on the Borsa Italiana markets.
