The rise in yields on T-bonds, now close to 3%, is putting stock markets under pressure, starting with the emerging markets, hit by the rise in the dollar on all currencies, including the euro (1,221, a two-year high and half). But China took sides this morning in favor of the Bull: a newspaper controlled by the party anticipates that the politburo of the Communist Party of China is ready to take measures to support the liquidity of the markets.
The reaction from the price lists was immediate. The CSI 300 index of the Shanghai and Shenzhen stock markets rose by 2,2% driven by the banks. Hong Kong +1,1% also helped by the resurrection of Rusal (+33%). US Treasury Secretary Stephen Mnuchin said US sanctions on the Russian aluminum giant would be lifted if billionaire Oleg Deripaska, close to Putin, leaves the company, listed in the former British colony.
The Japanese Stock Exchange rose (+0,7%), favored by the decline, the sixth consecutive, of the yen, traded at 108,7. The stock exchanges of Taiwan and Seoul are down (Taiex -0,7% and Kospi -0,2%), penalized by the bad momentum of the chip industry companies. The Philadelphia Sox index closed last night at its lowest level since February.
GOOGLE: REVENUES BOOM BUT COSTS RISE
US stocks moved little yesterday: Dow Jones -0,06%, S&P 500 +0,01%. The Nasdaq loses ground (-0,25%), hit by the slowdown in smartphone sales. But Wall Street is ready for the wave of quarterly reports that will arrive in a few hours.
The first to take the field was Alphabet, the parent company of Google (-0,33%, but -0,40% in after hours trading): revenues fly (+73%), but the analysts were struck by the parallel strong increase in costs associated with the giant's numerous initiatives: investments for YouTube but also for Waymo, the company dedicated to the development of self-driving cars, and for the subsidiary that deals with artificial intelligence.
Oil prices are still at their highest: Wti at 68.95 dollars, Brent close to 75 dollars. In Piazza Affari, Saipem (+0,87%) stands out, awaiting the announcement of the accounts approved by the Board of Directors yesterday evening.
POSITIVE EUROPE, MILAN IS THE BEST
European equities started the week well ahead of the ECB meeting: the Eurostoxx is at its highest since February 2, and has returned marginally positive since the beginning of the year. The composite PMI index for April stood at 55,2 points, above the consensus of economists, but EU data, weak overall, suggest a monetary policy that is still accommodative.
Starting braking from coupon detachment (-0,37% the incidence of dividends on the index) Milan (+0,64%) picked up speed during the session, closing by a hair's breadth from 24 (23.982 points). The value of trades stood at approximately 2,26 billion euro, down on the volumes achieved in the five sessions last week (all above 2,5 billion).
Similar script for the other European price lists: Frankfurt +0,25%, Paris +0,48% and Madrid +0,38%. Only Zurich closed in negative ground, conditioned by the drop in Ubs (-2,50%) after the accounts. The Swiss banking group closed the first quarter of 2018 with a net profit rising by 19% to 1,5 billion Swiss francs.
SPRED AT THE LOWEST FOR TWO YEARS, THE CTZ'S AT AUCTION TODAY
The Btp/Bund spread went down to 115 basis points, for the first time since 8 September 2016. The Italian 1,78-year yield fluctuated between 1,81% and XNUMX%. Purchases, especially from abroad, took shape later the task for the government to the president of the Chamber, Roberto Fico.
The month-end auction cycle kicks off today, with an offer of up to 3,75 billion Ctz and the two Btpei in May 2028 and September 2032. At the end of the secondary session, the Ctz in March 2020 was trading on the gray market at yield in the -0,190% area, above the -0,225% of the placement a month ago: at these levels it would be the highest auction since October last year. The month of April saw a peak in the maturities of securities purchased through the programme, over 24 billion in total, 22,6 of which in the public sector.
OFFERED 9,25 BILLION LONG-TERM SECURITIES
With the stock exchange closed, the Treasury announced the amount of medium-long term securities to be auctioned next Thursday:
- from 2,25 to 2,75 billion euro of the fifth tranche of the 5-year BTP 1/3/2023 coupon 0,95%.
- from 2,5 to 3 billion euro of the seventh tranche of the 10-year BTP 1/2/2028 coupon 2,00%.
- from 3 to 3,5 billion euros of the first tranche of the Ccteu 15/9/2025.
NPL, ECB READY TO CANCEL REQUESTS
The banking sector fueled the rally in Piazza Affari, especially in the afternoon. The Italian sector index closed up 1,03%. The news that the ECB intends to cancel the plan to reduce non-performing loans by banks has contributed to the recovery, a reform that could impose higher provisions on the system for non-performing loans (759 billion euros between Italy, Portugal, Greece and Spain).
UNICREDIT AND FINECO FLY ON COUPON DAY
In evidence Unicredit (+2,76%) promoted to "overweight" by Barclays. The stock released its dividend of 0,32 euro per share yesterday (yield 1,78%).
FinecoBank also shines (+3,11%). The stock posted a dividend yesterday of 0,285 euro per share (yield 2,88%) recovered almost entirely during the session. According to Mediobanca Securities, the institution will present the best quarterly among asset management companies, while Azimut (+0,32%) could be the one most impacted by market volatility. Banca Generali closed up 1,38% after accounts.
Good rise also for Mediobanca (+2,02%), Ubi (+1,67%) and Banco Bpm (+1,32%). Mps (-0,7%) goes against the trend, which is also affected by the target price cut by Deutsche Bank. Flat Bper.
ENEL RELAUNCHES IN BRAZIL
Utilities were weak, in line with the sector at European level (-0,38%), with investors attentive to the ECB's next moves on rates and the rise in US T bonds.
Enel (+0,54%) yesterday modified its takeover bid for the acquisition of all Elettropaulo shares, undertaking unconditionally to inject 1,5 billion reais. Those interested in the Brazilian group will compete in a public auction on May 18th. In addition to Enel, Iberdrola and the Chinese State Grid of China are in the field.
FIRST DUEL IN TELECOM TODAY. BUT THE MATCH MOVE TO MAY 4TH
The first round of the match on Telecom Italia (-0,71%) between Vivendi and the Elliott fund, supported by the majority of foreign investors, kicks off today. But the assembly will limit itself to approving the budget and confirming CEO Amos Genish. The Court of Milan has decided in fact, Tim's assembly today will not vote on the appointment of representatives of the Elliott activist fund to the board, which will be entirely reconstituted with the vote of the shareholders at the new meeting on May 4th.
MORGAN STANLEY DOESN'T BELIEVE IN MARCHIONNE'S RETIREMENT
The star of Fiat Chrysler shines (+2,11%) thanks to a report by Morgan Stanley which raised the "bull case" target to 50 from 35 dollars keeping the base target price at 23 euros. Investors' interest in the analysis of the broker (always among the closest to the group) was ignited by the passage in which Morgan Stanley points out that there are currently no signs of the start of the selection process for Sergio Marchionne's successor within the next 12 months. "We would not be surprised - write the analysts of the American bank - to see him remain as boss".
In the automotive sector, Sogefi also stands out (+3,44%) after the results.
THUD OF JUVENTUS, QATAR ON THE FIELD WITH ROMA
In the rest of the price list, Cattolica Assicurazioni should be noted (+4,92% to 9,06 euro). The president of the Cariverona Foundation Alessandro Mazzucco, speaking at a press conference in Verona, declared that "the return levels of Cattolica's share - which remains a financial investment - must rise because otherwise alternative, even interesting choices can be made".
Positive Fiera Milano (+2,74%), which from 30 April returns to the Star segment of Borsa Italiana.
Splash of Juventus (-3,07%) after the latest championship results, while Lazio rose by 4,45%. Roma, who announced that Qatar Airways will be the new "main global partner", gained 7,5%.
