Donald Trump, in his unprecedented guise of dove, took the opportunity of the message on the Union to celebrate the successes of his first year of presidency for the benefit of all Americans ("employment is at its highest even among African Americans and Hispanics and I'm proud of it"), but also to relaunch the objective of 1.500 billion of investments in infrastructures, a fundamental element of the "new American moment", the latest watchword.
It will be understood today whether the President's rhetoric will be sufficient to restore Wall Street, which yesterday, before Trump's words, continued its downward correction: more than the prospect of new investments and new stimuli, in the eyes of the market it counts the rise in bond yields (2,733% on ten-year bonds, the highest for four years). And so Wall Street experienced its worst session since August 17, when threats from North Korea had caused the decline.
BLACK SEAT FOR WALL STREET WAITING FOR THE FED
The Dow Jones index (-1,37%) fell 361 points, the S&P 500 lost 1,09%, Nasdaq -0,86%. Almost a warning to the Fed, meeting for the last time under the leadership of Janet Yellen. The euro/dollar cross was little moved, this morning at 1,243. Brent oil loses 0,8% to 68,5 dollars a barrel. In Milan Eni -1,3%, Saipem -3,5%.
AMAZON-BUFFETT, THE ALLIANCE THAT SCARY PHARMA
The shadow of the Bear does not cool the "animal spirits" of the market that much, already concentrated on the data of the big names in technology, Apple in the lead, which will dominate the scene in the next few days. Indeed, the show started surprisingly yesterday. With a sober press release (359 letters in all) Warren Buffett and JP Morgan, the two icons of US business, announced the alliance with Amazon to create a company for the health care of their employees with the aim of lowering costs , but also to raise the quality of services. Such is the consortium's prestige that the mere announcement of the agreement sowed panic among health sector stocks, the worst (-2,1%) on an already difficult day.
RECOVER TOKYO, BITCOIN BELOW 10 THOUSAND DOLLARS
The Tokyo Stock Exchange closed down for the sixth consecutive session, after the sharp drop in Wall Street and President Trump's speech without cues. The Nikkei index marks -0,83% (-193,68 points) at 23.098,29 and the Topix index -1,15% (-21,42 points) at 1.836,71.
Despite the slowdown in the PMI index on manufacturing activity, China's stock markets are up. Hong Kong +0,5%. CSI300 index of Shanghai and Shenzhen stock exchanges +0,6%. The Seoul Stock Exchange is up 0,9%. New collapse for Bitcoin, which fell below 10 thousand dollars this morning. During January, cryptocurrencies lost half in value.
MILAN -1,23%. 2018 EARNINGS DOWN TO 7,5%
Sitting under the banner of the Bear on the price lists of the old continent, slowing down despite the recovery of the dollar and more than positive macro data: by dint of evoking it, the correction has arrived. Milan suffers the most: Ftse Mib index -1,35 to 23,481 points. The index of our blue chips reduces the January gain to +7,5%, which clearly detaches the average performance of the other main indices in the Eurozone. Eurostoxx +3%.
The other markets were also weak: Madrid dropped by 1,21%; Frankfurt -0,95%; Paris -0,87%. London -1,09%.
REUTERS PASSES INTO BLACKSTONE'S HANDS
City twist for the world of financial information: Blackstone has reached an agreement for the annual payment of 325 million dollars for 30 years for the Reuters News business as part of the acquisition of the majority of the Financial & Risk division by Thomson Reuters.
CDS BELOW 100 POINTS: ITALY RISK REDUCES
The BTPs close the month-end auctions, taking back most of the day's gains in the end. The 2-year bond returned again above 100%. The solidity of the Bel Paese's securities is confirmed by the trend of the credit default swap on Italy which shares below 96 points, in area 2016, the lowest since December 141. The spread on the Bund rose from the lows of the morning to a closing in area 1,4 basis points, also against the weak data on inflation in Germany; the consumer price index slowed in January to 1,6% yoy, against expectations for a confirmation of XNUMX% in December.
Yesterday the Treasury placed a total of 9 billion, the maximum amount on offer, of 5, 10 and 50-year BTPs and Ccteu, including 4,5 billion of the new 2028-year BTP February 750 and 50 million of the reopening of the extra-long maturity ( 3 years old). The three BTPs were all assigned at prices 4-2,062 cents above the market. The four bonds will be offered this morning at the reopening for a total amount of 1,35 billion (15 billion the new ten-year) to complete the month-end auction round. The Treasury has already covered almost 387% of the refinancing needs for the year, calculated at XNUMX billion.
BANKS, THE CONSOB AND BANKITALIA WAND COMMISSION
The parliamentary commission of inquiry into the banking system closed its proceedings without a joint report due to lack of agreement between the parties. Vice President Mauro Maria Marino (Pd) presented a "majority report" approved with 19 yes and 15 no (including Cinque Stelle and Leu).
Among the six absentees who have been instrumental in reducing the quorum are three deputies from Forza Italia. The commission is made up of 40 MPs and an absolute majority requires 21 votes in favour. The report is clear in deeming that "the supervisory activities, both on the banking system (Bank of Italy) and on the financial markets (Consob), have proved to be ineffective for the purposes of protecting savings". Consob, endowed in some cases with "greater powers", "does not appear to have used them adequately (having activated them on only two occasions) nor to have, in fact, achieved significant results".
RAIN OF SALES ON THE FORMER FINMECCANICA AND IVECO
Some of the most eagerly awaited appointments contributed to accentuating the decline. Leonard, soon after the presentation of the business plan, was hit by a steady shower of sales which caused a double-digit collapse: -11,89%. The 2018 recovery (after -26% last year) practically vanished within a few hours. It was a cold shower for traders, who were expecting a speedy comeback after last November's downward revision of orders. CEO Alessandro Profumo has designed a "sustainable" strategy to return to double-digit profitability in 2020. But the market was hoping for much more aggressive targets in terms of revenues and EBITA. For 2018 Leonardo sees increasing orders, stable revenues and slightly growing Ebita to 1,075-1,125 billion euros on revenues between 11,5 and 12 billion.
The accounts of Cnh Industrial also disappointed (-3,3%). The company closed the 4th quarter with revenues of 8,10 billion euros, up 15,8%. The last three months of 2017 recorded a loss of 40 million euros. Net of non-extraordinary items, including the write-down of assets in Venezuela and the negative effects caused by the tax reform in the United States, the profit was 197 million euros. For 2018, the company estimates revenues from industrial activities between 27 and 28 billion. Industrial debt dropped sharply (-45% to 800 million).
Fiat Chrysler also fell (-1,72%). The company has announced that it will supply a few thousand Pacifica cars to Waymo, the Google subsidiary it is aiming to set up a fleet of self-driving taxis.
THE BANKS RETREAT, CATTOLICA LOSES OTHER BLOWS
Sales also prevail among the banks. Intesa decreased (-1,22%): the president Gian Maria Gros-Pietro said this morning that "the plan that we will present on 6 February will be one of important development, not simple continuity". The deadline for the Compagnia di San Paolo to reduce the value of the investment in the Bank to 2021% of the assets (today at 2018%) has been postponed to 33 (from 46). Banco Bpm was also in the red (-2,9%).
Heavy Banca Mps (-2,75%). At the start of the session, a large order, perhaps entered by mistake, had caused a theoretical decrease of 4%.
Another thud for Creval (-6,9%), which continues its tiring march towards the capital increase.
Three insurance companies lose new blows Cattolica (-2,03%) after the presentation of the industrial plan: the stock pays for the disappointment on the market for the failure to convert the mutual company into a joint stock company and the confirmation of the per capita vote. But analysts' opinions are positive: Equita Sim has raised the target price of the stock from 11 to 11,6 euros (buy), Banca Imi to 11,3 euros from 10 euros (add) and Mediobanca Securities to 10 from 9 euros ( neutral).
General -1,33%. Natixis strengthened the Buy rating, bringing the target to 18,40 euros from 17,50 euros. Jefferies strengthened the Buy rating by adjusting the target price to 18 euros from 17,70 euros.
TELECOM, LIKE THE SEPARATION OF THE NETWORK
Going against the trend is Telecom Italia (+1,15%). CEO Amos Genish presented a hypothesis to Agcom voluntary separation of the access network, including the entire last mile (connection from the exchanges to the users' homes), both in copper and in fiber, in a vehicle, 100% controlled by the telecommunications giant, on the BT/Openreach model. The newco, which will have 20 employees and which will have a book value of 15 billion, will be controlled by Tim but will have an independent Board of Directors in which a representative of Agcom will be present.
The plan will be illustrated to Minister Carlo Calenda on 7 February. According to Equita (buy opinion, target price 1,06 euros) the final outcome of the operation could be “ a merger with OpenFiber or an IPO or a de-merger. Our preference would be for an IPO that allows the asset to be valued, leaving control of the network in the short/medium term to Tim”. Banca Imi (buy, tp 1,11 euro) also believes that the spin-off of the network can unlock the company's hidden value.
LUXOTTICA, THE CASE IS "AT RECORD LEVELS"
The market has rewarded Luxottica which gains 1,8% to 52 euros after the preliminary revenues of 2017 in line with expectations. The strong euro has not affected revenues: the turnover for the year is growing and profit is expected to "grow sharply". Last year sales reached 9,157 billion, up 2,2% at constant exchange rates and 0,8% at current exchange rates, with cash generation "reaching record levels". Leonardo Del Vecchio said he was optimistic about the current year and the approval of the merger with Essilor.
In the sector, Safilo's abrupt turnaround -5,1%: on Monday evening the Hal fund denied its intention to increase its first share, equal to 43%, or even less to launch a takeover bid.
CENTRALE DELLATTE AIMS AT VIETNAM
Centrale del Latte d'Italia +0,85%. The Executive Vice President announced that after entering the Chinese market, the goal is to expand into other immature areas of the world such as Vietnam and Cambodia: «in those countries, Italian milk is sold at 3 euros per liter because consumers they don't trust local products and want quality». To cope with the expansion abroad, Centra del Latte d'Italia at the end of November 2017 raised 15 million euros through the issue of a fully subscribed bond.
Strappa Bioera (+16,8%) after the Tax Commission for Emilia Romagna accepted an appeal from the company.
Pierrel + 5,4%. The company announced after markets closed yesterday that it has extended a commercial deal with Dentsply.
Sias -6,42% paid for the downgrade of Equita (from buy to hold).
