Donald Trump loves surprises. The week opens with an unexpected curtain call on the talks with Beijing on tariffs. After announcing on Friday that "the negotiations are going very well and we are approaching a historic and monumental agreement", the President changed the tune: the negotiations, he announced on Sunday afternoon, are going slowly. Hence a declaration of war: the duties on 200 billion of imports from China will rise from 10 to 25%. Not only. Other assets, hitherto exempt, will be taxed for 325 billion. A cold attack whose consequences do not worry Trump. On the contrary: "The duties imposed on technological products - he tweeted - have allowed us to collect 50 billion dollars and partly explain the excellent situation of our economy".
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….— Donald J. Trump (@realDonaldTrump) 5 May 2019
…of additional goods sent to us from China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!— Donald J. Trump (@realDonaldTrump) 5 May 2019
SHANGAI LOSES 4,3%, OPENING EXPECTED IN RED
Stock markets immediately took the hit. The Shanghai Stock Exchange lost 4,3%, the renmimbi (-0,9%) fell to its lowest level against the dollar. Hong Kong loses almost 3%, Sydney -1,5%. Tokyo and Seoul avoid the bloodletting because they are closed for holidays.
However, a solid start is announced for European lists (London is at a standstill today) while futures on the S&P 500 index lose 2%.
The US diktat has also affected the oil market. Brent fell below $70 (-2,1%) amid the prospect of a drop in Chinese consumption.
WSI: BEIJING WITHDRAWS FROM TALKS
Trump's exit seems to have been made to confirm the old market proverb: “Sell in May and stay away from the stock market”. The markets gave the conclusion of an agreement as highly probable within a few days, an optimism corroborated by the departure of Liu He, President Xi's right-hand man, for the United States. But last night the Wall Street Journal He wrote that China is considering withdrawing from talks with the US. Perhaps, the optimists hope, these are tactical skirmishes to obtain the best conditions. The tension, however, is such as to jeopardize the forecasts which until yesterday gave a stable result.
RATES, PRESSURE ON THE FED GROWS
Meanwhile, the White House continues to press for a rate cut. However, the President's pressure is starting to leave its mark: the drop in inflation, which fell to 1,6% in March, has prompted some Fed members, including James Bullard of Saint Louis and Charles Evans of Chicago, to take considering a rate cut to stimulate price growth. A minority position for now, given that Jerome Powell argues that the drop in inflation is only temporary. But the game has just begun. The spotlights are therefore on the price index to be released on Wednesday: a new figure well below the 2% target will give new oxygen to the doves (and Wall Street).
ECB MINUTES COMING SOON. IT IS ABOUT TLTRO LOANS
The debate in the Eurozone is no less intense, pending Tltro loans: Mario Draghi insists on robust stimuli in the face of a delicate situation, but part of the directorate is holding back, given the ongoing recovery in the Eurozone. In this light, the data of the PMI services indices of the Eurozone, released this morning, should be evaluated. The publication of the minutes of the last ECB meeting is also important.
On the Italian front, the monthly note on economic performance (released on Tuesday) and the data on industrial production (Friday) should be followed.
INTESA OPENS THE SHOW OF ACCOUNTS
The financial week, however, will be dominated by the quarterly reports, starting with the accounts of the big banks: Intesa will open the dance tomorrow. It will be an opportunity to deny Berenberg's perplexities (from hold to sell) and confirm the high dividend. The accounts of Ferrari and Poste Italiane will also be released on Tuesday. Wednesday will be the turn of Unicredit, Enel, Leonardo, Banco Bpm and Ubi Banca. On Thursday, however, it will be the turn of Mps together with, among others, Bper, Mediobanca and RCS.
TODAY THE INBIG COUPON OF THE STAR IS RELEASED
Rain of dividends this morning from mid- and small-cap companies. About thirty companies traded on the Italian Stock Exchange detach their coupons. Spotlights focused in particular on companies in the Star segment. Particularly generous Ascopiave: the coupon of the municipal company (including an extraordinary share of 0,2133 euro) guarantees a yield close to 9%. Focus also on the dividends of Equita Group and Gamenet Group (yields in the order of 7%).
NOT ONLY FCA: TENARIS MEETING TODAY
To be followed in Piazza Affari Fiat Chrysler, which closed the dieselgate dispute in the United States on Friday. The company has reached an agreement in the US that closes the Class Action on diesel engine emissions. The agreement has a total value of approximately 800 million dollars. These are the agreements between FCA and the USA, California and with all 50 states, reached last January and approved by the San Francisco Court.
On the corporate front, the shareholders' meeting of Tenaris on Luxembourg for the approval of the 2018 financial statements should also be mentioned.
BLACKROCK ONE STEP FROM CARIGE
Probably decisive day for Carige. The plan developed by BlackRock today faces the examination of the banks adhering to the interbank fund which will have to give the willingness to convert the credits into shares of the institute, a necessary condition for the entry of the US giant.
META BUYBACK FOR BUFFETT, NEW PHONES FOR GOOGLE
Even wise men sometimes miss out. Warren Buffett, idolized by thousands of shareholders at Berkshire Hataway's meeting on Saturday, had to admit the humiliation: a dollar invested in his financial company ten years ago is worth $2,40 today. The same dollar invested in an index fund on the S&P 500 is now worth 3,2. Buffett has not hidden the difficulties of finding suitable investment opportunities for the immense liquidity (14 billion dollars) he manages: hence the prospect of massive purchases of treasury shares.
A key appointment for the new economy is scheduled. Google's annual developer meeting is held in Mountain View. For the occasion, the group's new smartphone could be presented.
To follow the accounts of Walt Disney, which has just launched the challenge to Netflix and the first quarterly of Lyft after the listing. L
