A scorching autumn is looming near Washington. The mass resignations of key players in business and the economy (among others Intel, Disney, 3M, Merck and so on) prompted Donald Trump to dissolve both the American Manufacturing Council and the Strategic and Policy Forum, i.e. two symbols of the alleged harmony between the White House and the business world, in open revolt against the attitude held by the president after the incidents in Charlottesville caused by the extreme right. A few hours earlier Trump had lashed out at Amazon, which just yesterday launched the bond issue (17 billion) to buy Whole Foods, "Amazon damages small retailers and makes many jobs disappear," said Trump, furious with Jeff Bezos , publisher of the "enemy" Washington Post.
THE FED IS DIVIDED ON THE BUDGET AND RATES
In such a climate, it is not easy to perfect one of the most delicate operations in the history of world finance: to bring monetary policy back to normal after ten years of expansion of the monetary base and cheap money. The confirmation came yesterday from the minutes of the last meeting of the Fed. The members of the board were divided in the meeting of 25-26 July on the timing and methods of reducing the bank's balance sheet (today 4.500 billion) and on the decision whether to proceed or less to a new increase in rates within the year, despite the weak trend of inflation. Hence the decision to postpone the start of the budget cut plan to September, while the rate hike in December will be seen later.
ACCELERATE QE. DRAGHI BRAKES THE WAIT FOR JACKSON HOLE
In the midst of so much uncertainty Mario Draghi let it be known, via Reuters, that in Jackson Hole, at the conference at the end of August organized by the Kansas City Fed, he will not speak about Qe or other news in ECB policy. The banker's strategy, moreover, is working as demonstrated by the improvement in the economy of the Eurozone (including Italy): the ECB's purchase program has allowed banks to reduce their exposure to Italian government bonds from 428 billion euros in June last year to 377 billion last month. A result made possible also by the fact that purchases from Frankfurt are increasingly oriented towards France and Italy.
SEOUL, THE RECOVERY CONTINUES, TOKYO WEAK
In the meantime, the cautious recovery of stock markets continues in Asia in the face of declining tensions on the front of Korean missiles. The Seoul Stock Exchange rises by 0,5% The web giant Tencent shines in Hong Kong +5,5%. Weak Tokyo +0,4% held back by the recovery of the yen against the dollar. The euro rose, traded this morning at 1,17835 against the dollar which reversed course after the publication of the Fomc minutes. The bond market also reacted, the yield on the reference ten-year government bond fell to 2,22% from 2,26 the day before.
Contrasted Wall Street stressed by political controversies: the White House's room for maneuver is further reduced, the tax reform is moving away, and so the rise in price lists lost momentum towards the end of the session. The Dow Jones closed up +0,12%, S&P 500 +0,14%. NASDAQ +0,19%.
OIL, US PRODUCTION RISES AGAIN
Oil goes up again: Brent at 50,47 dollars (+0,4%), Wti at 46,88 (+0,2%). US crude stockpiles fell just under 9 million barrels last week, double the consensus expectation, but in line with the American Petroleum Institute's forecast tonight. also communicated data on gasoline reserves (+20.000 barrels against the expectation of a drop of 0,9 million). Stocks of distillates went up by 0,7 million, expected a change of zero. In July, US production rose 0,8% to 9,50 million barrels per day.
In Piazza Affari Eni is up 0,4%. Saipem +0,43% is among the companies that have come forward with Saudi Aramco for the Hawiyah gas treatment plant expansion project. The company was awarded a new contract in Kuwait worth approximately $850 million.?
MILAN STILL AT THE TOP, GDP TOWARDS 1,5%
The good macro data favored the recovery of the Stock Exchanges of the Old Continent. The minutes of the last ECB meeting will be published today. Piazza Affari, once again the leading stock exchange in Europe, closes at +1,21%, the Ftse Mib index close to 22 points (21,984). The other main European markets were positive: Paris +0,71%; Frankfurt +0,71%; London +0,67%; Madrid +0,63%.
On the macro front, it is worth noting the growth in the second quarter of the Italian gross domestic product which rose by 0,4% compared to the previous quarter and by 1,5% compared to the second quarter of 2016. At this point, according to economists, the Italy could close the year with GDP growth of 1,4%-1,5%, the best in 2010. According to Istat, if the cyclical growth rate remained unchanged, the annual average of GDP adjusted for working days would be by 1,5%. "This probably means that there are more margins for public finance, above all to defuse the safeguard clauses on VAT", commented Nicola Nobile, economist at Oxford Economics.
In the Eurozone, however, according to the second preliminary reading, GDP increased by 0,6% on a quarterly basis and by 2,2% on an annual basis in the second quarter of 2017 beyond what was previously estimated (2,1%). At the end of a session with rarefied volumes, the Italian secondary closed at parity against a moderate drop in German securities which allowed the spread to briefly return below the 160 level, down by almost ten basis points compared to last week's levels. The yield differential between Italy and Germany fluctuated in the session in a narrow range between 161,2 and 158,6 after it had returned to 168 on the last day of last week, the highest since mid-July.
ATLANTIA, ABERTIS IS CLOSER. RUN OF OFFERS ON AUTOGRILL
Atlantia stands at the top of the Piazza Affari list, +4,2% to 27,6 euros, a new record. The quotations were pushed by an article in the newspaper El Confidential according to which a counter-offer by ACS on Abertis as an alternative to that of the Italian group is becoming increasingly unlikely. Although the group led by Florentino Pérez, president of Real Madrid, can count on the support of the Spanish government, explains El Confidencial, Acs cannot acquire Abertis directly without launching a capital increase, a possibility excluded because it is unwelcome to the shareholders and to Pérez himself. that does not want to go below the 10% threshold. Moreover, the newspaper does not exclude the entry into the field of a significant investor to support Acs. And he stresses that Criteria Caixacorp, the holding company of the Caixa foundation which owns 22% of Abertis, has not yet pronounced itself on Atlantia's offer. Furthermore, the Spanish government has not yet said a definitive word; indeed, we read, Álvaro Nadal, minister of energy, is against allowing a foreign company to manage a motorway concession.
Autogrill also stands out in the Benetton team +5,1%. The cause of the leap lies in the news published by the American site Wall Street Wires according to which negotiations are underway with several competitors (the French Elior and Sodexho, the English Compass) to sell the company, or part of its assets, on the basis of a valuation of 14 euros per share, 35% more than the current quotation.
FCA STILL IN THE RALLY. AN AGREEMENT WITH INTEL AND BMW AT THE START
Fiat Chrysler's rally continued: the stock hit a 19-year high and closed up 2,64% after the 8,15% jump posted on Monday. Sustained volumes, more than three times the daily average recorded in the last 30 days. In the wake of Exor rose by 2,5%, despite the arrival of the first denials and the skepticism of brokers. The four potential Chinese buyers (Great Wall, Dongfeng, Geely and Guangzhou Automobiles) have denied they are interested in buying FCA according to the financial newspaper Jingji Guancha Bao (Economic Observer). A possible sale would include the Jeep and Ram brands, Dodge, as well as Chrysler and Fiat, however leaving out Maserati and Alfa Romeo.
Meanwhile, FCA announced yesterday that it has signed a memorandum of understanding with the BMW group, Intel Corporation, Mobileye (an Intel company) which provides for it to join these companies in the development of a cutting-edge platform in autonomous driving technology.
BANKS, LUXURY, PUBLISHING: IT'S TIME FOR THE BULL
The increases affected a large part of the list:
– Among the banks, Unicredit +1,52% and Intesa Sanpaolo +2,16% stand out above all in the wake of the positive comments from HSBC. Ubi Banca +2,5%, Bper +1,96% and Mediobanca +0,91% also did well. Asset management companies also performed well: Azimut +3%.
– Brilliant luxury sector, Yoox Net a Porter +2,5%, Tod's +3,2%.
– Publishing companies are also highlighted, Gedi +4,3%.
– Among the small caps, KREnergy's run continues, posting a leap of 34,58% after the +17,8% recorded on Monday. The increase follows the agreement between the Ministry of Economic Development, the Campania Region and the 100% indirectly owned company Fib, which provides for the creation of an innovative process to produce lithium cells.
