There is bad blood between the tech giants and President Donald Trump: the environment, immigration and protectionism represent as many battlegrounds. But the two worlds, who don't love each other, are forced to coexist. The president, under fire for Russiagate, aims to recover on the terrain that is most congenial to him, that of business. And so you were in the White House where 18 CEOs of technology companies such as Amazon, Apple, Ibm, Microsoft and Google met with a total capitalization of 3.500 billion dollars. The goal was to lay the groundwork to help President Donald Trump reorganize and modernize government, regardless of differing political views. Wall Street applauds and celebrates new records.
ARGENTINA (!) LAUNCHES A TITLE AT 100 YEARS OLD
It's a good time for the economy, both in the US and in Europe. But not only. Yesterday's most curious news is that Argentina, the historical naughty of the international community, already punished by the financial embargo after the default, has launched a sensational offer: a 100-year bond, at a rate of 8,25 %. It's hard to imagine who can trust the coupons from Buenos Aires expiring 2117. But it is nonetheless the signal that risk aversion has plummeted to an all-time low. That may not be good news.
NIKKEI OVER 22 POINTS, TO HIGHEST DOW JONES AND S&P 500
Even the Tokyo Stock Exchange participates in the euphoria of US listings. The market is starting to close higher this morning, the Nikkei index rising by 1,1% to 22.290 points, on the highs of the last 22 months. Other stock markets in Asia are relatively quiet, Hong Kong down 0,1%, Shanghai up 0,1%. Seoul -0,1% and Mumbai +0,1%.
Strong recovery on Wall Street thanks to the recovery of technology stocks and the health sector (new record for the index). The Dow Jones index (+0,68% to 21.528,99 points) and the S&P 500 (+0,83% to 2453,46) reached new all-time highs. The Nasdaq is even better (+1,42%).
DUDLEY (FED): ECONOMY OK, RATES WILL GO UP
The words of William Dudley, the governor of the New York Fed, also gave a boost to the stock markets (and to the dollar), who sent signs of confidence on the state of health of the economy. Inflation, the banker said, is set to rise as wages rise thanks to an improvement in the labor market. The Fed will therefore continue to gradually tighten US monetary policy, thus preventing bubble risk and recession risk. Dudley's message boosted financials, driven by JP Morgan (+2,2%): the sector advanced by 0,98%.
Biotech (index +2,5%) deserves a separate mention, as it experienced its best session since February. Biogen rose 3,5% after UBS upgraded the stock from sell to neutral. However, the Guinness Book of Records goes to Clovis Oncology: +46,5% after the positive outcome of the phase 3 tests on a new drug for the treatment of ovarian cancer.
The alarm on the tech sector has also subsided, starting with Apple (+2,9%) one of the stocks most targeted by sales last week. All the Bigs are up and the Tech sector index is up 1,7%.
AT PIAZZA AFFARI STM IS THE TOP TITLE
The recovery of the chips involved Stm (+3%), the best title on the Milanese list, in partial recovery after last week's crash. The recovery was accompanied by the increase by Goldman Sachs of the target price of the stock from 11,8 to 13,7 euros. “We are increasing our estimates to take into account the greater presence in the automotive and 3D sensing sectors”, wrote the analysts, reiterating their neutral opinion.
ENI, NEW BUSINESS IN MEXICO AND IRAN
Only oil products were down: Exxon -0,87%, Chevron -0,82% on the wave of a new decline in the raw material, which slipped to a seven-month low due to the increase in the production of shale oil in the USA and the recovery of Libya and Nigeria, which are neutralizing the effect of OPEC cuts. Brent fell to 46,91 dollars a barrel (-1%), Wti to 44,0 (-1,2%). Technical deadlines helped push the market downwards: today is the last day to trade futures on the end of July deadline.
Eni advances in Piazza Affari (+0,4%). Bloomberg has anticipated that the company is in the process of signing a memorandum of understanding with the National Iranian Oil Company (NIOC) for the expansion of the fields of Kish and Darkhovein. A consortium formed by the group of the six-legged dog, Capricorn Energy and Citla Energy yesterday won the seventh block of an auction concerning the exploration and exploitation of oil and gas fields in the waters of the Gulf of Mexico off the coast of the of Veracruz and Tabasco. Estimates of existing fields indicate up to 169 million barrels of crude oil in an area of 591 square kilometers. Saipem also rebounds +0,2%.
BREXIT, THE NEGOTIATION STARTS WELL. PARIS CELEBRATES MACRON
The fall of the euro against the dollar also helped the stock markets of the Old Continent, already electrified by the success, albeit predictable, of Emmanuel Macron in the legislative elections on Sunday. In Milan, the FtseMib index rose by 0,35%, recovering the ex-dividend of various stocks, including Poste Italiane. Paris, up 0,90%, while Frankfurt gained 1,07%. Madrid +0,83%. London was up 0,81%.
Positive start of the Brexit negotiations. The EU and the United Kingdom have reached an initial agreement on the priorities of the negotiations and the timescales to follow. This was announced at the end of the first day of political meetings in Brussels by the chief negotiator Michel Barnier, in a joint press conference with the secretary of state for the United Kingdom, David Davis. The negotiation will be organized through four sessions, one per month lasting a week. "For both the EU and the UK a fair deal is possible and is far better than no deal at all," said Barnier. The Irish question, said the two negotiators, yesterday "took up most of the time": the goal is to avoid the resurgence of a physical border between Eire and Northern Ireland while safeguarding the Good Friday agreements.
SPREAD DOWN, BTP DOWN TO 1,95%
Among government bonds, the rise in Italian securities continues. The ten-year rate fell to 1,95% from 1,99%. The Italy-Germany spread closed at 168 basis points from 172 on Friday after reaching a low for the session at 166 points, the lowest since mid-January. In parallel, the 1,95-year rate drops to 1,99% from 50% at the last close. Italy's performance was also positive against Spain with the yield bonus at 52 basis points at the end, against XNUMX.
BANKS: EUROPE RISES, ITALY MARKS TIME
European banks in the running (Eurostoxx +1,2%), Italians stalled (only +0,16%). The reason for the double pace is, as usual, linked to the impasse on the banks for which a solution is not yet in sight. On Friday evening, the government had to issue a lightning decree to freeze the repayment of subordinated loans maturing in the next six months, an emergency measure that affects banks undergoing recapitalization at the expense of the state.
VENETIAN BANKS: SOLUTION LATE, BONDS HOLD BACK
The climate of renewed uncertainty was immediately reflected in the senior bonds of the two institutions, slowing down after last week's progress. The senior of Popolare Vicenza March 2020 coupon 2,5% yields almost 4 points to 86,00, for a yield that rises to the 8,69% area, after falling last week to 6,40%, the lowest since the end of January . About ten days ago the title was traveling over 16%. Even the senior October 2018 coupon 5% of the Vicenza bank drops almost 4 points to 89,0, for a yield of 14,50%, against a low since mid-February seen last week in the 9% area, after a peak the previous week in area 26%.
BALZO DI CARIGE, ACCELERATES BANCO BPM
The performance of Banco Bpm +1,6% stands out on the main list. Carige is also making progress (+3,2%), which has transferred a portfolio of non-performing loans for a gross amount of 938 million to a special securitization vehicle. The group transferred a portfolio of non-performing loans for a gross amount of 938 million to a special securitization vehicle. Paolo Fiorentino, former chief operating officer of UniCredit, is in pole position for the position of chief executive officer.
Modest increases for the other institutes. Unicredit +0,3%: the group sold to MBCredit Solutions, specialized in the management of non-performing loans, a portfolio of non-performing loans with a nominal value of 450 million euro. Intesa -0,4%, Bper Banca +0,6%.
On the other hand, the decline in managed savings continues. Poste Italiane's performance was conditioned by the ex-dividend (-6,79%, but only -0,82% net of the coupon). Banca Generali (-0,7%) and Azimut (-0,33%) also fell.
After suffering for several sessions, Finecobank (+1,49%), Ugf (+1,4%) and Unipolsai (+1,96%) rebounded.
VIVENDI READY TO FREEZE AT QUOTE IN MEDIASET
Vivendi yesterday challenged the Agcom resolution before the Lazio Regional Administrative Court which obliges the French group to choose between control of Tim and a stake close to 30% in Mediaset (+0,23%). Vivendi, writes Ansa, has however communicated to Agcom that it is ready to comply with the resolution by freezing the voting rights above 9,9% in the Biscione.
Through Rti yesterday Mediaset took over the 11,1% stake held by the Spanish Telefonica in Premium pay TV. According to a source, Telefonica will receive 11,1% of any damages claimed from Vivendi. In January 2015, the Spaniards paid 100 million euros to enter Premium. The investment corresponded to an equity value of Premium pay TV equal to 900 million.
TELECOM OPEN FIBER CHALLENGE. THE GOVERNMENT THREATENS TO DEMAND DAMAGES
Meanwhile, the confrontation between the government and Telecom Italia increases (+0,3%). The government threatens to seek damages from the company if it goes ahead with the project to lay the fiber optic network in rural areas. In a note from the Ministry of Economic Development it is stated that “the Italian Government obviously has no intention of preventing or hindering Tim's investments that are compatible with the legal commitments undertaken and the relevant Community legislation. If, on the other hand, these conditions are lacking, the Government will act, as it should, to protect the public interest”.
Telecom Italia CEO Flavio Cattaneo said the company would move forward despite the threat of a claim for damages. The former monopolist defends himself by stating that the investments in the market failure areas had been communicated almost a year ago. Open Fiber (Enel) and Telecom Italia have an opposite technological approach to investments in optical fiber, Telecom Italia's is faster as it stops at the switchboard on the street, while Open Fiber brings the new network into the home.
GOLDEN SEASON FOR EUROPEAN E UTILITIES
The advance of utilities, the best European sector of the month (+4%), continues, without clamor, thanks to the downward movement of the cost of money in the Eurozone. Enel is up (+0,2%, but +17% since the beginning of May). A2A +0,47%. Terna moved little (+0,02%) on the day of the ex-dividend (-1,76% gross of the coupon). In the last month, the German utilities achieved significant performances: RWE +70%, Uniper +34% and E.On +33% in addition to the French Rubin +32%.
GIGLIO GROUP BREAKS IN CHINA: +115% IN ONE YEAR
Prysmian is up 2,1% among industrial stocks. Fiat-Chrysler +0,1%. Buzzi +0,6%: Fidentis raises its target price to 28 euros from 27,5 euros, Buy judgment confirmed. Campari +2,5%: HSBC raises its target price to 7,4 euros from 6,2 euros, confirming the Buy opinion.
Among the small caps, the Giglio Group's rally continues, up 16,5% after Friday's leap of +7%. Since the beginning of the year, the gain is 115%. Investors are celebrating the company's agreement with Secoo, the largest luxury e-commerce platform in China.
