Not just the industry. Services are also losing blows, ie the engine of US growth, so far unscathed by the general slowdown that has affected the global economy. The ISM Purchasing Managers Index of US services companies plunged to levels not seen in three years, in line with recent European data.
But the novelty, far from depressing the market, has given way to purchases on Wall Street, which is now betting on a new rate cut as early as October. A probable, if not inevitable, turning point if the data on employment and the US labor market, arriving at 14 pm, confirm the slowdown of the economy. But the cut, strongly invoked by the markets, does not convince everyone: the governor of the Chicago Fed, Charles Evans, noted dove, this time sides with those who consider a new cut ineffective, however insufficient to counter the fall in trade unleashed by the war on duties, which has now spread to Europe.
"INVESTIGATE ABOUT BIDEN", THE REQUEST TO XI
There could be a turning point next week, when a Chinese delegation arrives in Washington greeted by a request from Trump: investigate the trafficking of Joe Biden's son, already at the origin of Ukrainegate, with the Bank of China. The US electoral campaign, a full year after the vote, weighs more and more on the economy: it is now clear that Donald Trump will use any means to win and so will his enemies. Against this backdrop, the markets are starting to end a mixed week, under the banner of growing uncertainty.
TOKYO SENDS 2,7% FOR THE WEEK
Asian markets resigned, awaiting the reopening of the Chinese stock exchanges next week. Weak Tokyo (-0,3%), weighed down by purchases on the yen (106,80 against the dollar), the traditional safe haven for the Pacific Stock Exchanges. During the week, the Nikkei index dropped 2,7%.
Hong Kong also down (-0,2%). The police banned the use of masks or other gags to avoid recognition. It is unlikely that the measure will prevent the 18th consecutive Saturday of protest. The confidence index has plummeted to lows.
Sidney is also weak, a timid rebound from the Korean Kospi. Among the notable movements this morning, the -0,7% of the Korean won dollar cross.
The Indian central bank should proceed with a new cut in the cost of money.
NASDAQ BOUNCES, OIL HOLDS BACK
Final in recovery yesterday of the US stock exchanges. The S&P500 closed up 0,8% on the session's highs yesterday evening. Dow Jones +0,47%. The Nasdaq, down 1% at the start of the session, at the end of trading, marked a gain of 1,12%, a daily recovery from negative to positive that is unprecedented in the last year and a half.
The rebound in equities yesterday afternoon coincided with the rally in bonds as well. The yield on the 1,53-year Treasury Note, which moves inversely of the price, is at XNUMX%, its lowest in the last four weeks.
Gold still shines, having risen to 1.510 dollars an ounce.
Oil is slowing down, losing 5,8% during the week: the WTI trades this morning at 52,64 dollars, the lowest since July. Eni closed down 1,09%.
The euro dollar has risen since the beginning of the week, even if in Europe, just yesterday, five-year inflation expectations reached a new all-time low. The euro is trading at 1,097 this morning.
DUTIES, ONLY AIRBUS EARNS
Frankfurt closed on the occasion of the party for German reunification, yesterday the awaited sting of duties arriving from Washington for the condemnation of Airbus arrived on European price lists. Now Europe will have to decide the answer: either aim for a compromise, trusting in the condemnation of Boeing before the WTO for an infringement similar to those committed by Airbus, or dust off an old condemnation of the US (4 billion dollars) never made to execute. Not an easy choice in fear of new US requests on the import front of German cars, an old fascination of Donald Trump. But on the trade front, surprises are lurking: Trump's fines have not damaged Airbus, +4,5% in Paris when it emerged that the European giant of the skies would not have been hit by punitive measures because the offending manufacturers sell products in the branch in Alabama. It remains to be seen that any sanctions on Volkswagen, which operates from Chattanooga (Tennessee), will affect Italian salami and wines.
LONDON -0,6%. THE EU TOWARDS NO TO JOHNSON
Piazza Affari (+0,06%) closed the session with a modest rise to 21.311 points.
The Airbus effect allowed Paris, the market hardest hit on the eve of the fine, to close the session with an increase of 0,30%. In red Madrid (-0,11%).
London did worse (-0,63%). The European Union has rejected Boris Johnson's Brexit plan. European Council President Donald Tusk said the EU was open to further negotiations with Great Britain but did not find London's latest proposals convincing. “We fully support Ireland: we remain open but still unconvinced,” Tusk tweeted.
EU INFLATION PUMPS TO EVER LOWS
The PMI on Eurozone Purchasing Managers' Expectations fell to a year-to-date low of 51,6.
In August, producer prices fell more than expected and five-year inflation expectations reached an all-time low of 1,13%, 13 basis points less than the value prior to the announcement of measures to counteract the deflation of the mid-September ECB.
“The European Central Bank – Governor Ignazio Visco warned yesterday – cannot risk losing control of inflation expectations in a deteriorating economic context”. Especially "in a context of high public and private debts".
But the risk of deflation did not prevent the boom in demand for Btpei linked to price trends: compared to the 4 billion offered on Wednesday, demand exceeded 22 billion euro.
BTP YIELD DOWN TO 0,83%
Bond market slowed down yesterday, given the closure in Frankfurt. But the yield on ten-year BTPs still falls to 0,83% from 0,90%.
In closing, the spread is 142 basis points from 145 on the previous day.
BANKS ON THE MOVE. SPOTLIGHTS ON MEDIOBANCA
It was the banks that made Milan float above parity: in evidence Banco Bpm (+2,8%), supported by the hypothesis of an aggregation with Ubi Banca (+0,5%). Giandomenico Genta, president of the Cassa Risparmio di Cuneo Foundation, Ubi's largest shareholder with a 5,9% stake, argued that, as part of an inevitable consolidation process, the institute will have to examine all possible M&A options, including Banca Mps and Bper Banca (+1%).
Mediobanca advances by 1,6%. Leonardo Del Vecchio's Delfin would have already reached 10% but the king of eyewear would be willing to ask permission from the ECB to reach 20%.
Unicredit (-0,2%) launched a 5 and a half year senior preferred bond for 1 billion euro, which attracted orders for over 2 billion. The rate was set at 90 basis points on the midswap. The issue was priced at 99,919%, with a fixed coupon of 0,50%.
MONCLER BOUNCES BUT THE CAR FEARS A US STANG
Moncler is reviving (+0,9%), recovering from the lows since January. According to Bernstein's analysts, among luxury companies, medium-small sized ones such as Moncler, Ferragamo (+0,37%) and Tod's (-2%) will probably be most affected by the riots in Hong Kong. Brunello Cucinelli, on the other hand, rises (+1,92%).
Auto remains weak, affected by fears of tensions on tariffs. FCA and Pirelli lost 1,36% and 0,5% respectively. For Equita, FCA's US auto data in the third quarter are positive and will allow us to confirm the 2019 forecasts, even if the visibility of the market in the coming months remains more than uncertain, given the geopolitical uncertainties.
DRUMS RECOVER, WAR OF SPAIN FOR MEDIASET
Banca Akros confirmed the buy judgment on Tamburi (+3% to 6,19 euro), raising the target price to 7,2 euro from 5,9 euro.
Male Mediaset, which leaves 1,58% on the ground, while the Spanish subsidiary has fallen below 5,8 euros, far from the price (6,54 euros) to exercise the right of withdrawal for those who do not intend to participate in the holding.
Bio-On rebounds (+8,89% to 9,8 euros) after the recent decreases linked to the results which highlighted a fall in sales in the six months.
