“We are ready, very ready to deal with the epidemic,” Donald Trump syllified in front of the cameras, announcing that he had entrusted his deputy Mike Pence with the leadership of the fight against the virus. But Trump, accused by the Democrats of having underestimated the threat, was keen to let it be known that, according to him, "the fault lies with the media, which are exaggerating the threat and sowing fear on the markets". However, the effect of these words was nullified by the news that the health authorities had placed 83 suspected cases under examination, confined near New York. News of the contagion also came from California as well as from Germany, Norway and other hitherto immune countries, including Brazil. In short, the virus slows down its run in China, but expands almost everywhere with great rapidity, to the point that the American Food and Drug is now speaking of a pandemic.
And so Trump's reassurances did not reassure the markets, which turned downwards last night, after having failed in the confidence mission. The Dow Jones closed the day in the red by 0,46%, as did the S&P 500 index. Only the Nasdaq retained a modest gain (+0,17%). Tonight the sell-off on shares intensified again, especially on those of Japan: this morning the Tokyo Nikkei is down 2,3%. The Land of the Rising Sun has canceled the Sumo championship. The Korean Kospi fell by 1%. The only Stock Exchanges in the Asia Pacific area to rise are those of China: the CSI 300 index of the Shanghai and Shenzen stock exchanges gains 0,8%. For the first time, cases of contagion in China are fewer than in the rest of the planet.
Stock market futures signal that fear is destined to still govern the fate of the markets. Yesterday's rebound in Piazza Affari certainly does not mark a reversal of trend after what Guido Maria Brera of Kairos, with happy image, defined as "the Chernobyl of globalisation". In fact, risk aversion is still growing.
The yield on the 1,30-year Treasury Note falls to levels never seen in history, at 0,84%. Record also for the ten-year bond of Australia, at XNUMX%.
Lowest in the last 15 months for Brent oil, at 52,7 dollars a barrel: this morning, crude oil from the North Sea decreased by 1,4%. Gold up 0,5% to $1.650 an ounce.
MILAN LEADS THE REBOUND, FRANKFURT LUFFS
After a drop of about 10% accumulated in just four sessions, the Milan Stock Exchange rebounded decisively. Emergency passed? Absolutely not, given that the contagion counter continues to rise, but various factors have played in favor of Piazza Affari, starting with the prospect of being able to benefit from the flexibility clauses that allow for derogations from the EU budget rules to deal with the emergency, as the bloc's economic commissioner, Paolo Gentiloni, said yesterday.
Hence an upward session: +1,44%, at 23.422 basis points, strongly recovering from the lows of the morning (-2%), but down from the highs reached during the afternoon (+2%).
The gains in the rest of Europe were more modest: Paris +0,09%, Madrid +0,73%; London +0,39%. Frankfurt remains in the red (-0,13%).
LAGARDE: WHO CAN INCREASE EXPENDITURE
The president of the ECB, Christine Lagarde, yesterday reiterated her appeal to the governments of the euro area to use budgetary margins to fuel growth, especially at this time of slowdown for the bloc.
The call to Germany also resounded loud and clear in a document published yesterday by the European Commission in which the request to the leading economy in the euro area is renewed. "Germany's modest share of GDP earmarked for investment endangers its own potential and has negative implications for the euro area."
Markets are pricing in a 10 point rate cut from the ECB.
SPREAD TO 149, 5-YEAR AND 10-YEAR BTP AT AUCTION TODAY
At the end of the session, the spread returned to around 149 points, after having reached a maximum of 158 during the day. The 0,49-year Bund trades at -XNUMX%.
The 0,99-year yield fell to 1,06%, after a peak of XNUMX%.
The auction of the Bots closed with a rise in interest to the highest since the end of December, at -0,287% from the previous -0,355%.
Today the Treasury will offer up to 7,5 billion Btp at 5 and 10 years, plus a Ccteu.
Rating agency DBRS said it saw limited implications for the Italian economy. Moody's said the coronavirus increases the risk of Italy slipping into a recession, but believes it is unlikely to impact the country's creditworthiness.
MARKET PLACE PLAY A NICE TICKET
Saipem, Tim and FCA. Piazza Affari yesterday played an exceptional trio.
1) SAIPEM FLIES, THE DIVIDEND IS BACK AFTER SEVEN YEARS
Saipem leads the race: +5% after a masterpiece quarter. The company closed 2019 with a net profit of 12 million euros, from the loss of -472 million in 2018. The adjusted result was 165 million against 25 million last year. The company returns to distribute a cash dividend of 0,01 euro per share, after seven years of fasting.
The order book (25 billion euros) is at record levels, with a sharp decline in financial debt of less than 500 million compared to 1,2 billion in 2018.
2) TIM, TODAY THE KKR OFFER ON THE FIXED NETWORK
Tim scores a gain of 3,6%, to 0,53 euros. Today, KKR's non-binding offer for a minority stake in the fixed network is expected to be examined by the board. The potential buyer is ready to acquire 42% of the asset, valued at 7,5 billion euros at EV level. The Minister of Economy, Roberto Gualtieri, issued the following statement: "I believe that Italy needs to accelerate on the path of technological innovation, ensuring citizens, businesses and administrations the opportunity to have an infrastructure national ultra-broadband communications network, based on effective and fast data transmission capacity"
3) FCA: PEUGEOT USEFUL RECORDS
Fiat Chrysler (+4,6%) intends to propose to the shareholders' meeting the distribution of a dividend of 0,7 euro, in line with forecasts. But the stock was in line with the leap of Peugeot (+5%), driven by it by the dividend and record results: revenues stood at 74,7 million euros, better than consensus expectations. The trend in profitability was very good, with an operating margin of 8,5%. The CEO Carlos Tavares, destined to take the reins of the Italian-American group after the merger, said that, at least at the moment, there is no need to restructure and reduce the models produced by FCA. Ratings agency Moody's also said the French automaker's 2019 results support its current Baa3 ratings with a stable outlook.
Pirelli also runs (+2,2%). Ferrari +0,9%, Piaggio +5% after the results.
GOLDMAN SACHS STRENGTHENS THE BUY ON BPM AND UNICREDIT
The banks are also recovering. Goldman Sachs strengthened the Buy on Banco Bpm (+0,3%) and Unicredit (+0,2%). Ubi Banca +0,6%. An institutional investor would be ready to enter the CAR syndicate agreement, currently at 17,7%, in order to bring the hold on the bank to about 20%. Intesa Sanpaolo +0,7%. Lengthen Mps (+3%).
Hermes begins to see a return to normality in China. Salvatore Ferragamo +1,5%. Deutsche Bank cuts the target price to 19,5 euros. Moncler +1,6%.
CHANGE OF THE GUARD IN A2A
Among the utilities, Enel did well (+0,9%): Endesa's results were positive. Weak A2A (-1,16%) despite the 2019 preliminary results better than the guidance. to weigh, the indiscretions according to which the mayors of Milan and Brescia, the two main shareholders of the utility, would have found an agreement on the appointment of Marco Patuano as president (decision that belongs to the regional capital) and Renato Mazzoncini as CEO (appointment that belongs to Brescia).
THE DUTCH COURT CONSIDERS MEDIASET
Mediaset runs (+4,49%): the judges of the Dutch court to which Vivendi had turned to prevent the birth of the MfE holding rejected the urgent appeal of the French. "We will appeal against this decision, since if the merger plan goes ahead, it would cause disproportionate damage to all minority shareholders," commented a spokesman for the French shareholder.
TAMBURI STRENGTHENS IN OVS
Outside the main basket, Falck Renewables flies (+8%). Ovs +6%: Tip has rounded up the share in the distribution chain. Still down Autogrill (-2,3%), and Technogym (+0,4%).
