The drums of war are once again beating on the trade front. Donald Trump, regardless of the criticisms coming from the world of industry (both traditional and tech) and from agriculture, has decided to adopt the hard line: at the end of September, US duties will rise from 10 to 25% on imported goods Chinese for 200 billion dollars. Beijing has already made it known that it will not give in to US "blackmail". The clash on trade overshadows the outcome of the Fed meeting which in reality did not give any surprises: the US economy is doing well and Jay Powell, as scheduled, will raise the cost of money at the meeting on 25-26 September.
Markets are already pricing in this move (with another to follow in December). Yesterday, albeit temporarily, the 3-year US yield exceeded the 0,145% threshold. The yield on Japanese securities also rose sharply (0,12%) on the highs of the last two and a half years at XNUMX%. The prospect of Japanese funds bringing back part of the capital invested in Europe has led to a mini-flight from the French Bund and Oat.
Against this backdrop, the stock markets slowed down, despite Apple's boom (+5,89%), now one step away from the trillion wall of value (999,42 billion at the end of the session). The drop in financials in Piazza Affari is certainly not a good sign, while the signs of a slowdown for the Bel Paese are multiplying.
The fall of Chinese stock markets accelerates: the CSI index of Shanghai and Shenzhen loses 1,4% (-5,5% since 24 July). Hong Kong slips to a 10-month low.
Tokyo (-0,4%) and the other Far East lists were also weak, starting with the Korean Kospi. Samsung falls back (-1,93%): the Galaxy is losing its battle against the iPhone X.
The dollar-yuan cross at 6,81 has not moved much for now. Dollar yen at 111,6. The euro trades at 1,1661. Pound stable: today the Bank of England could raise rates.
Yesterday evening there was a new historic high of the dollar against the Turkish lira: the cross almost to 5 was pushed by the rumors about the retaliation that the United States government is preparing against Turkey, accused of detaining a shepherd without reason evangelist, arrested for espionage in recent weeks.
Wall Street was penalized at the end of the session by news on the trade dispute with China: the Dow Jones closed down 0,32%, S&P 500 -0,10%. The Nasdaq rises, backed by Apple.
Tesla (+10%) was highlighted after the confirmation that the current quarter and the next will be in profit.
Brent oil, which fell 2,5% yesterday following the unexpected increase in crude inventories in the United States, traded at 72,6 dollars a barrel this morning (+0,3%).
TURNOVER IN MILAN: 2018 INDEX IN RED
Industrial production less brilliant than expected, risk of trade wars on the rise again. The decline in oil contributes to complicating the march of the markets. The price lists of old Europe lose momentum, starting from Piazza Affari, betrayed by some subdued quarterly reports and by the thump at the end of Ferrari. A negative opening is also expected this morning.
Schizophrenic trend in Milan in the last two sessions strongly conditioned by the quarterly reports.
The FtseMib closed up 1,3% on Tuesday, yesterday it lost 1,9% slipping to its opening levels, around 21.800. July ended with a gain of about 2,70%, August is already showing a steep climb from the first day. The performance of the index since the beginning of 2018 has turned negative again.
SPREAD TO 230, BUND AND OAT AUCTIONS TODAY
The other price lists are also down, but less pronounced. London loses 1,22%; Frankfurt -0,53%; Madrid -0,72%; Paris -0,23%.
The Italian secondary closed slightly positive, with the yield of the 10-year BTP at 2,8% and the spread with the Bund stable at 230.40 points.
In a market with light trading, typically in the summer, the movement was mainly dictated by the supply factor: after today's German one (2,373 billion ten-year Bund), French and Spanish auctions are on the agenda today, for a total figure of almost 12 billion .
The growth of the manufacturing sector in the Eurozone accelerated only marginally in July, in a context of continuing fears about international trade. This is what emerges from the final reading of the PMI index confirmed at 55,1 from 54,9 in June.
SVIMEZ: THE SOUTH IN FREE FALL
The economy of the South, reads the Svimez report, risks a sudden slowdown next year. If in 2017 the growth of the GDP of the South was 1,4%, this year it will settle at 1%. But it is next year that there is a risk of a sharp slowdown in the southern economy: only 0,7%.
Piazza Affari closed down on the lows of the session, recording the worst performance in Europe due to the declines in some heavy sectors on the Milan stock exchange such as banking, energy and automotive.
COLLAPSE OF FERRARI AFTER CAMILLERI'S CONFERENCE CALL
Ferrari closed down 8,35%, slipping heavily in the final during the conference call with analysts on results for the quarter, at 104,30 from a maximum of 116,30 euros. Sales kicked off when the new CEO, Louis Camilleri, defined the plan targets for 2022 as "ambitious", specifying that there are risks but also opportunities. Ferrari ended the second quarter of 2018 with a net profit of 160 million euros, up 18% year-on-year (136 million in the second quarter of 2017).
Fiat Chrysler also did badly (-2,64%) despite sales up by 3,41% in the quarter (market share equal to 27,1% against 29,13 a year ago).
GOLDMAN PUNISHES ENEL
Enel (-3,88%) in the final and extends the loss since the beginning of the year to -10%. Following the results, Goldman Sachs cut the recommendation to Neutral from Buy, target reduced to 5,25 euros from 6 euros. The energy group closes the first half with a net profit of 2,02 billion, up 9,4% compared to the same period last year. Net profit was 1,892 billion compared to 1,809 billion in the first half of 2017, up 4,6%.
UNDERSTANDING IN RED DESPITE THE RECORD QUARTER
Intesa Sanpaolo sold 4,6% afterwards the announcement of half-yearly data. The first six months of 2018 recorded a net profit of 2,17 billion euros, robust growth compared to 1,73 billion in the thick period last year. In the second quarter alone, profit was 927 million. What annoys the market is the drop in operating profit in the second quarter, -4,3%, compared to the first quarter. The institute confirms the forecasts for 2018 of an increase in the net result compared to 2017. The dividend policy for the 2018 financial year provides for the distribution of an amount of cash dividends corresponding to a payout ratio equal to 85% of the net result .
Also down Banco Bpm (-2,7%), Unicredit (-2%), Ubi (-0,7%) and Bper (-0,5%). Mediobanca is down (-1,2%) which, however, closed the 2017/18 financial year reporting a net profit up by 15,2% on an annual basis, to 863,9 million euro, with an intermediation margin up by 10,2% on an annual basis, to 2,419 billion.
Sale FinecoBank (+1,7%). Mainfirst has raised the recommendation to Outperform from Neutral, a new target of 11,50 euros from 10 euros.
STM, FUSION TESTS WITH INFINEON
In contrast, Campari also shines (+1,9%), which closed the first half with a net profit of 147,2 million euros, up on the 108,6 recorded in the same period of 2017 (+35,5% /a), and Leonardo (+1,4%).
Stm (-0,1%) defended itself from the wave of sales that is hitting Piazza Affari. Commenting on the half-year results released yesterday, Infineon revealed that it has considered acquiring Stm in 2017. Infineon and Stm are the second and third largest semiconductor manufacturers in Europe by market capitalization (after NXP). The merger would create by far the largest European player.
LEONARDO STILL IN THE RALLY
The Defense group continued its run, closing the day up by 1,4% at 10,33 euros in the wake of the half-year report and the growth in the delivery of helicopters: the number of deliveries from the beginning of the year to 31 July 2018 is equal to 93 units, up from the 85 delivered in the first seven months of 2017.
