Donald Trump, surprisingly, is proving to be the most tenacious and irreducible of the Keynesians. After the stimuli of the tax reform and the expansion of the federal budget, yesterday it was the turn of the presentation of the recovery plan for military and infrastructure spending: 200 billion dollars a year for the next ten years with the aim of activate 1.500 billion of private investments. A shower of money that will have the first effect of the debt growth of 984 billion dollars, in profound contrast with the anti-statist recipes of the US right.
In fact, the cuts in healthcare and health care costs planned by the president will not compensate for the increase in spending and the reduction in tax revenues. The goal is to put good fuel into the engine of the economy, without fearing the side effects, especially on inflation and the cost of money. The immediate effect, in fact, will be a strong injection of new paper. In this context, the price list race continues, recovering from the lows but exposed to new relapses.
DOW JONES +1,7%, CHINA RISES
Meteo Borsa, however, reports good weather again. China's stock markets are up, albeit on declining volumes: the long break of the Lunar New Year begins on Thursday. The CSI 300 index of the Shanghai and Shenzhen stock markets gains 2,2%. Hong Kong +2%.
The rise of the Japanese stock market was much more timid, held back by the strengthening of the yen against the dollar: Nikkei index +0,2%, from +1,3% at the start of the session.
Wall Street reared its head. The Dow Jones index recovered 1,7% to 24.601 points, S&P500 +1,39%, Nasdaq +1,56%. Volatility is down: the Vix lost 12% to 25,5 points.
Consumer prices in the US rose 2,1% year over year in December. A slowing 1,9% increase is expected for the month of January, but there could be some surprises after labor market data showed a +2,9% jump in wages, the highest change since 2009 .
OIL STILL DOWN, BITCOIN RECOVERS
The yield on the 10-year bond is at 2,84%, roughly on the same levels as yesterday, even if during the day it had pushed to the highs of the last four years at 2,902%. The two-year bond is at 2,07%.
The dollar weakened against the euro: the cross this morning is at 1,230.
Brent oil reached its seventh consecutive session of decline, last night it closed at 62,6 dollars, this morning it is trying to rebound to 63 dollars: +0,7%. At Piazza Affari Eni +0,6%, Saipem -1%, Tenaris +0,4%.
Bitcoin recovered, closing up 9% at $8.814.
EUROPE ACCELERATES, MILAN LIGHTING UP AT THE RAIL
The European stock exchanges close the first session of the week with a positive result after the declines and high volatility of the last eighth, recovering ground in the wake of Wall Street. The Ftse Mib index rose by 0,77% to 22.337 points, the only one in positive territory even after yesterday's increases.
The rebound of the other European Stock Exchanges was more robust, with higher gains: Frankfurt +1,45%, Madrid +1,36%, Paris +1,2% and London +1,19%. The pan-European STOXX 600 index scored +1,3%.
THE SPREAD GOES DOWN TOWARDS BUND AND BONOS
Positive closure for the bond market in an overall climate favorable to risk. The spread between Italian and German ten-year bonds rose slightly, to 127.10 points, +0,87%, with the yield on the 10-year BTP stable at 2,03%. The Btp/Bono spread on the ten-year stretch fell slightly to 56 basis points, from 58 basis points on Friday.
Yesterday the Treasury placed all 6,5 billion euro of 12-month BOTs, with rates slightly up from the all-time low recorded in the placement in January. The yield edged up to -0,401% from its previous low of -0,42% a month ago. Demand reached 9,68 billion euros.
Today it's the turn of medium-long term auctions. On offer up to 7,75 billion euros in 3,7 and 30-year BTPs. This is an important test, the last first of the March 4 vote.
At the end of yesterday's session, the 3-year October 2020 BTP was trading at a yield of 0,08% from 0,04% at the auction a month ago; the 7-year November 2024 traded at 1,44% against 1,35% in mid-January; the thirty-year March 2048 at 3,14%, below the 3,33% of the last placement, dating back to mid-October in this case.
LUXURY LIGHTS UP THE PRICE LISTS: LVMH 4+%, MONCLER +3,2%
The catwalk of European price lists was illuminated on the day of the ascent by luxury, thanks to the exploits of the two French admirals: Lvmh made a leap of 4,03% (capitalization of 122 billion euros), Kering +3,68% waiting for today's bills.
In the wake of the two giants, Moncler (+3,2%) took off, followed by Ferragamo (+1,45%) and Luxottica (+1,45%). In the meantime, Richemont has presented to Consob the documentation for the voluntary takeover bid on all the ordinary shares of Ynap not yet owned.
TRUMP EXPENDITURE PUSHES BUZZI
Recovery day for industrial stocks. Stm closed the session up 1,6% at 17,48 euros. Kepler-Cheuvreux has raised the recommendation to Hold from Reduce, target unchanged at 17,90 euros. Buzzi +1,9% driven by the expectation of the infrastructure plan presented yesterday in the USA.
Fiat Chrysler advanced by 1,23% in line with the European sector (+1,5% the Stoxx): Kepler Chevreux confirmed the buy recommendation and the target price at 22 euros. Ferrari also rises (+1,5%) which has put in place a mini buyback (100 million euros). Pirelli +1.6%.
While awaiting the accounts scheduled for tomorrow, Enel is making progress (+1,2%). Telecom Italia +0,5%.
BANKS, MPS: NEW LANDSLIDE AFTER THE ACCOUNTS
The banking sector limits the rise to 0,35% against approximately +0,9% in the sector in Europe. The invitation of the governor of the Bank of Italy, Ignazio Visco, to new aggregations to favor the reduction of costs and the recovery of profitability did not take place.
Ubi (-2,6%) paid dearly for the hypothesis (soon to be denied) of a possible integration with Banca Monte Paschi, -5% after the publication of the accounts on Friday. According to Mediobanca Securities, the results confirm that the institute needs time to see the fruits of the ongoing restructuring, while Equita Sim underlines the loss above expectations (502 million in the fourth quarter against the 350 expected by analysts) for loan adjustments . Black day also for Carige (-5%).
Banca Mediolanum closed in the red (-1,5%). The group closed 2017 with a net profit of 380 million euros (-3%) but with a 15% increase in management fees to 976 million euros thanks to net inflows into funds and management. The board also approved a final dividend of 20 cents, bringing the total coupon to 40 cents, in line with what was distributed for 2016. During the conference call with analysts, the chairman Ennio Doris predicted a stable coupon for 2018 and 2019 aiming for higher dividends in subsequent years.
The big names are doing well: Intesa +0,7%, Unicredit +0,44%. Banco Bpm is also in positive territory (+0,7%).
ELICA TAKES FLIGHT, ORDER FROM CERN FOR SMRE (AIM)
Elica +6% after the accounts and the conference call with analysts. The Marche-based company leader in the design and production of kitchen hoods closed the fourth quarter of 2017 with a net profit of 3,9 million from a loss of 9 million in the same period of the previous year, benefiting from the tax impact of the Patent box of around one million euros. Revenues rose by 2,8% to 121,6 million driven by the growth in worldwide demand for hoods.
Great feat of an Aim freshman. Smre (+3%), an Umbrian company specialized in the design and construction of high-tech industrial machines, won a tender for the supply to CERN in Geneva of a cutting plotter, a machine capable of cutting composite materials, above all the pre-impregnated carbon fiber. At the end of 2017, SMRE signed an agreement with the Chinese unit of Isuzu for the supply of 100 electrification kits for the start of production of the new full electric version of a 7.5 ton truck of the Japanese company.
IL SOLE 24 ORE IS WORTH ONLY 45 MILLION
Still sad notes for Il Sole 24 Ore, which yesterday marked a new absolute low at 0,78 euros. Stock market capitalization fell to 45 million, a value lower than the amount collected at the end of November 2017 through the 50 million capital increase, completed with the partial intervention of the underwriting syndicate.
