Donald Trump has chosen: the enemies are China and the European Union, cited before the WTO for reacting to US tariffs. Putin's Russia, accused by the "disastrous" FBI investigation of having plotted for his election to the White House, is a much more reliable partner. The financial markets obviously take note of the situation that has arisen in the 23 minutes of talks between the two leaders in Helsinki. Starting with the most immediate fallout, the one on oil prices, in retreat as the US president wanted.
BRENT AT 72 DOLLARS (-4,6%). SAIPEM FALLS
Brent fell yesterday evening just above 72 dollars (a substantial -4% compared to the day before). This morning the price is at its lowest since April at 72,1 dollars a barrel, from -4,6% at the end. Saudi Arabia is also moving in harmony: it seems, according to rumors, that in the last few hours the Saudi Kingdom has offered some customers the possibility of increasing oil purchases. Finally, the terminals of the Libyan ports reopen.
On Wall Street, the Energy stock index fell by 1,2%. In Piazza Affari, the drop in oil stocks caused the main index to fall into negative territory: Eni lost 1,4%, Tenaris - 1%, the fall of Saipem was heavier (-4,3%).
US RATES: JPM MORGAN SEES BONDS ABOVE 3%
With the geopolitical dossier archived, the markets are focusing on the two hearings, the first today, of Fed chairman Jerome Powell in Congress, an opportunity to evaluate the next moves in US monetary policy. JP Morgan believes that the 3-year bond will rise above 15% in the short to medium term. The two-ten-year spread, which has fallen to 50 basis points, is destined to zero and become negative in the long term, but the risk for this summer is a sharp increase in the spread above XNUMX basis points.
“ONLY” FIVE MILLION MORE SUBSCRIBERS: NETFLIX SHOULDERBAG
The 2,86-year US bond trades at XNUMX% this morning.
The Japanese Stock Exchange, closed yesterday for holidays, is up 1%. China's stock markets fell, while the yuan appreciated slightly to 6,67 against the dollar. CSI 300 index of Shanghai and Shenzhen stock exchanges -1,1%. Hong Kong -1%. Slightly up for India and Korea.
The drop in oil also marked the Wall Street session: S&P -0,10%, Nasdaq -0,28%. Slight rise for the Dow Jones (+0,18%).
Netflix thud (-14%) after the stock exchange after the announcement of the results of the quarter. Subscribers rose by 5,2 million, one million less than estimates.
Musk Calls Savior of the Boys in Thailand a Pedophile
Tesla also fell (-2,8%) after Elon Musk's latest outing on Twitter: the CEO called Vern Unsworth, the English speleologist who was the first to reach the 12 boys trapped in the cave in Northern Thailand, a pedophile . Unsworth accused him of publicity-seeking after he offered the rescue team a mini-sub for use in the cave.
EUROPE WEAK, TODAY DATA ON CARS
A slight upward opening is expected for European lists, pending the data on car registrations in the main countries (Germany, France and Italy). European stock exchanges fell yesterday afternoon, held back by the downward revision of the estimates of the Monetary Fund. In the Old Continent, the report reads, "uncertainties about migration policy, the governance of budgets, the rules concerning the rule of law and the institutional architecture of the euro have grown". Even more important is the slowdown in oil.
Piazza Affari, after a morning on positive ground, lost 0,32% and dropped to 21.822 points on trading for 1,38 billion. Frankfurt +0,18% thanks to the robust and surprising Deutsche Bank performance (+7,28%). In the second quarter of 2018, the German group recorded a net profit of approximately 400 million euros, a result significantly higher than the estimates of analysts (159 million), released by the institute on 11 July last.
Weak Paris (-0,36%), Madrid (-0,15%) and Zurich (-0,18%). London (-0,79%) suffered from the drop in raw materials and the progress of the pound.
IMF SEES ITALY IN GRAY
The International Monetary Fund has revised downwards the growth estimates of Italian GDP this year and next, forecasting a negative impact on domestic demand from the widening of the spread triggered by political uncertainty and fears about future government economic measures. The Fund lowered the growth projection of the Italian GDP in 2018 to 1,2%, from the 1,5% indicated in April; for next year, the Washington body expects growth of 1,0%, against the 1,1% indicated in April.
The spread between Italian and German ten-year bonds eased: 221.40, -2,51%. There has been a trend towards cover-ups following the cancellation of the mid-August Treasury auctions. The steepening of the 2-10 year curve bodes well. The market also benefited from Friday's confirmation of Italy's rating by Dbrs at 'BBB (high)' with a stable outlook.
LEONARDO CHOSEN FOR THE TEMPEST PROJECT
It was the day of Leonardo's rescue (+1,4%), great protagonist at the Fanborough air show. The Italian group will take care of the avionics of the new British fighter-bomber, the Tempest within a consortium which includes Bae, Mbd and Rolls Royce. The project has an initial value of two billion pounds. The company also announced that it has been selected with Milestone Aviaon Group by Saudi Aramco for its medium helicopter fleet renewal programme.
Less good news from London for CNH Industrial (-1%): according to Bloomberg the company risks a fine in Great Britain for having cartelized truck prices.
MORGAN STANLEY AWARDS ITALGAS AND SNAM
Morgan Stanley has given the charge to the utility sector. Italgas made progress (+1,7%) on which the broker raised the target price to 5,20 euros, confirming the "equalweight" recommendation. Promotions also for Terna, flat, and Snam (+0,8%). Enel -0,5%. The Blackrock fund reduced its stake to 4,88% from 5,18%.
Boost from Brazil for Telecom Italia (+1,6%). Tim Brasil, a company controlled by Tim, is considered by analysts to be the best among Brazilian operators, surpassing even Telefonica Brasil in the consensus. The company will publish the half-yearly data on Thursday 19, the Italian parent company will follow on the 24th.
MEDIASET, TAKEOVER OFFER FOR EI TOWERS
Worth noting was the performance of Inwit (+4,73% to 6,86 euros) after Credit Suisse increased its target price to 7,6 from 6,8 euros, confirming the “outperform” rating.
Mediaset (-0,8%) has reached an agreement with Perform to offer its subscribers the viewing of some Serie A matches on its platform. According to Auditel data, the subsidiary Fininvest recorded 650 more spectators during the World Cup on the day average and 3,2 million more in prime time
The company, together with F2i, is preparing to launch a takeover bid on Ei Towers +1,65%, already 40% controlled. Among yesterday's promotions there is also Campari (+1,6%). Deutsche Bank raises its target price to 7,60 euros. New relegation instead for Ferragamo +0,5%: HSBC has cut the target price to 20 euros. Brunello Cucinelli +2%.
DEUTSCHE BANK CHARGES THE BANKS
The positive surprise of Deutsche Bank's accounts gave the banking sector a boost yesterday, also comforted in the afternoon by data from Bank of America. The European sector index rose by 0,7%, that of the Italian banks, slowing towards the end, by 0,4%. In evidence Ubi (+1,01%) and Bper (+0,67%).
Another twist in Carige (+1,15%). Vittorio Malacalza has resigned from the board and the market is betting on the increase in Raffaele Mincione's stake in the bank.
