The stock exchange week in Asia starts on a positive note, thanks to the latest news regarding the trade negotiations between the United States and China. But the markets' attention, 90 years after the great collapse of '29, whose anniversary falls tomorrow, is also focused on the impact of current politics in Italy, Germany and Argentina and on the eve of the Fed's decisions.
- Positive this morning on Nikkei of Tokyo +0,4%, theHang Seng of Hong Kong +1,1%, Shanghai +0,7%, and the Kospi of Seoul +0,4%.
- The agreement on the "phase one" of the trade peace with Beijing to be signed at the Apec summit scheduled in Chile on 15/16 November seems to have been finalised.
- Lo Chinese yuan it appreciates slightly to 7,059. The yen weakens, to 108,8.
CHINA, ALL CRAZY ABOUT THE BLOCKCHAIN
Blockchain user or developer companies are highlighted in China's list, after President Xi Jinping announced a government commitment on the technological approach born with bitcoin: all cryptocurrencies are on the rise, starting with bitcoin . Sixty ultra-high tech companies on China Stock Exchange were suspended for overshooting.
The plenum of the Chinese central committee begins today which, after four days of work, will choose the names of the new members, chosen from among the youngest members of the party.
ELECTION EARTHQUAKE IN UMBRIA AND THURINGIA
In Europe, Italy in the lead, holds the court the electoral earthquake in Umbria. The center-right with Northern League and Giorgia Meloni traction triumphs, the Five Star Movement collapses. The government of Giuseppe Conte wavers, in the crosshairs for conflict of interest after the Financial Times revealed his ties to a Vatican-linked investment fund at the center of a corruption investigation. Conte admitted that in May 2018 he gave a legal opinion to the Fiber.4 company regarding the exercise of golden power over Retelit, but said he was "very calm".
No less strong was the blow to the German government in the Thuringian elections. The extreme right becomes the third political force by overwhelming Angela Merkel's CDU. He keeps the radical left in government, but loses allies, green in the lead.
PERONIST TRIUMPH IN ARGENTINA AT RISK OF DEFAULT
Great turmoil on the markets also due to the overwhelming victory of the Peronist Alberto Fernadez who, with 48% of the votes, beat outgoing president Mauricio Macri. The new president, in office since December, will intervene immediately to deal with inflation (55 percent) and the collapse of the peso (30% devaluation since the summer). As Antonella Mori of ISPI wrote: “The strong depreciation of the peso in the last two months makes the restructuring of the approximately 100 billion dollars of foreign debt inevitable. The question today is not whether the country will default, but what will be the loss inflicted on private bondholders, in terms of cutting the nominal value, reducing interest rates and lengthening the maturities of the bonds”.
LONDON TOWARDS THE VOTE ON DECEMBER 12
Time for elections in London too. Today Boris Johnson will officially propose that the Kingdom return to the polls on 12 December. Labor is in favor as long as the premier undertakes to proceed with Brexit only after an agreement with the European Union. Divided, as usual, the Europeans. France opposed until the end the request for a long postponement (January 31) appreciated by Germany sensitive to the interests of the big car manufacturers, determined to protect exports to the United Kingdom as well as those to China, the reason which prompted Merkel to open the 5G market to Huawei, the only Western country. The EU decision is expected for today.
The euro pound traded this morning at 0,846 (+0,1%).
DRAGON'S GOODBYE, EVEN THE FED ACCELERATES QE
Tonight in Frankfurt there will be the farewell ceremony for Mario Draghi and the investiture of Christine Lagarde who will speak immediately after superMario in the presence of Angela Merkel. The Qe 1 purchases are expected to start on November 2st, the (non-maturity) legacy of Eurozone bond purchases. Rain of data arriving from the USA.
Federal Reserve announcements are expected first on Wednesday. The forecast is for a new rate cut, the third of 2019. In the meantime, the central bank has increased (from 75 to 120 billion) the massive injection of liquidity on the repo market which has been going on for several months.
The Stars and Stripes labor market data, both employment and wages, will be released on Friday. But updates on industrial production and GDP trends in the third quarter will also arrive this week.
The 1,81-year Treasury Note yields XNUMX%, the highest in the last month and a half.
Hot eve also for the Bank of Japan. Despite the limited room for maneuver given the negative rates, the Japanese authorities seem determined to send Wednesday signals of further easing of monetary policy to avoid a further strengthening of the yen in the face of cuts in the euro area and the dollar. An increase in equity purchases cannot be ruled out.
TIFFANY FOR NOW SAYS NO TO LVMH, APPLE LAUNCHES STREAMING
The benevolent attitude of the central banks favors the reflation of the already effervescent stock markets. The stock markets are taking advantage of this: Piazza Affari is at its highest, over 22.600 points, the Standard & Poor's index has crossed the 3 mark again. In this context, the corporate battles are rekindled.
Spotlights on in Piazza Affari on the Mediobanca shareholders' meeting, a stock which in one year has achieved an increase of 45%, up from 10% in the last month under the pressure of Leonardo Del Vecchio who presents himself at the meeting with a share higher than the 8% and combative intentions.
The luxury sector will hold the court on the equity markets. Operators are called to evaluate the deal of the century: Lvmh, the luxury flagship led by Bernard Arnault (the richest man in Europe), with 75 global brands, with a market value of 194 billion euros , launched a $14,5 billion offering on Tiffany's, the icon of luxury made in the USA. But the figure was deemed "inadequate" by the board. There is a lot of Italy behind the deal: managing the negotiations is Francesco Trapani, a major shareholder of Tiffany, the man who sold Bulgari to the French tycoon. Leading the jewelery made famous by Audrey Hepburn is today the Italian Alessandro Bogliolo.
Amazon, after the disappointing quarterly, will have to deal with the loss of the Pentagon's order (10 billion dollars) for the management of cloud activities, assigned to Microsoft: Trump thus wanted to punish the "enemy", publisher of the The Washington Post, the spearhead of the campaign to impeach the president.
Also out today are the quarterly AT&T. Alphabet and Walgreen's, the multinational pharmacy led by Stefano Pessina.
Friday will see the launch of Apple's streaming service in more than XNUMX countries.
QUARTERLY: 160 ACCOUNTS FROM WALL STREET
The accounts of 160 corporations arriving this week including: Facebook, Mastercard, GE, Pfizer, Bristol-Myers Squibb, Bayer, AT&T, Sony, Airbus, Colgate-Palmolive, GM, Volkswagen, Aeroflot, Apple, Starbucks, Beyond Meat, Alphabet, Alibaba, Exxon Mobil, Chevron, BP, PetroChina, Repsol, Baker Hughes, Hess, Total, Sanofi, Royal Dutch Shell, Credit Suisse, Bank of China, MetLife, Allstate, AIG, HSBC, Danske Bank, BNP Paribas, Nomura , Macquarie Group and Banco Santander are the hot names on the agenda.
The Piazza Affari calendar also includes the assembly of Cir, Cofide and Giglio Group, the pocket-sized e-commerce multinational. To follow the remote derby on the accounts between Lazio and Rome.
MANAGED SAVINGS: ITALY YIELDS LESS THAN EUROPE
Tosetti Value, one of the leading Multi-Family offices in Europe, has X-rayed the actual performance of asset management companies. "If we had invested 100 euros at the beginning of 2018 in the top 30 European management companies - it is noted - we would have had a return of 6,15%, net of 1,79% of fixed commissions (any other charges are not included such as performance fees, transaction costs, entry/exit fees). While the top 10 Italians returned 0,3% and cost 2,61%”.
In terms of returns in the first nine months of 2019, the top 30 investment houses operating in Europe (including Gruppo Intesa, third with assets under management close to 200 billion, and Anima with numbers close to 65 billion) average generated a performance of 12,3%. The top 10 Italians in the same period amounted to 7,6%.
