On the eve of the G20, Donald Trump displays his extraordinary skills as a television anchorman. Subscribers to Cable Fox television, his favorite network, were able to watch the spectacle of the president's muscular diplomacy. “If Japan were attacked – he said – we would be ready to fight the Third World War. But in the event of an attack on America, the Japanese would just watch the show on their high-definition Sonys." Hence the request to Tokyo (and to South Korea) to pay the expenses for the US troops on site plus an additional 50%.
Obviously, there is also some for the European Union, which "hates us", as emerges from the antitrust investigations into US companies, the latest case being Broadcom.
The China? “If he doesn't make the deal we want, I'll increase duties by 10%. But I don't mind the current situation, with no agreements." Imposing a 25% tariff on $300 billion of Chinese goods would have a 0,5% negative impact on global economic output, equivalent to wiping out South Africa's economy, according to the IMF. But while the president frowns, Treasury Secretary Stephen Mnuchin takes on the form of a dove. "The agreement with China - he says - is 90% done".
The markets embraced the more optimistic version this morning, comforted by an article in the "South China Morning Post" which speaks of an agreement on tariffs already reached behind the scenes.
Chinese stock markets are up (+1,4%), supported by the rebound in corporate profits in May, after the crash in April. Hong Kong also advances +0,8% while, in view of the G20, popular protest restarts. The Korean Kospi also advanced +0,7% and the other price lists in the region.
Tokyo did well (+1,2%) on the wave of the increase in consumption in May. He knows how to signal, almost a direct response to Trump, the leap of Japan Display + 32% after Apple announced the increase in purchases from the supplier of Apple TV monitors.
WEAK WALL STREET, BUT THE CHIPS ARE RUNNING
Trump's broadsides somewhat against everyone have disoriented Wall Street, including the latest furious attacks on Fed number one, Jerome Powell, who, according to Trump, “is doing a terrible job. Wish I had Mario Draghi ”.
The Dow Jones closed down -0,04%, S&P 500 -0,12%, Nasdaq -0,32%.
However, the chips (+2,2%) are running on the wave of the excellent results of Micron (+13,3%), despite the ban on selling its products to Huawei. Apple also advanced (+2,2%) after the iPhone maker confirmed the purchase of Drive Ai, specialized in artificial intelligence.
Forecasts assume a 0,25% cut in the cost of money in July, but the expectation of a drop of 50 points, already considered probable before Jay Powell's intervention, has precipitated. The prospect of a slowdown in the decline in interest rates favored the recovery of the dollar, which this morning is at 1,13615 against the euro, below the highs of 1,1412 on Tuesday.
OIL STOCKS COLLAPSE, TENARIS FLIES TO MILAN
Oil is up sharply: this morning Brent trades at 66,29 dollars a barrel. Weekly U.S. crude stockpiles plunged 12,788 million barrels, the sharpest weekly decline since September 2016. WTI was up 3,2% to $59,70, also boosted by news of supply disruption from part of a major refinery on the east coast of the United States following a fire.
Energy producers in the limelight yesterday also in Milan. Tenaris (+3,4%) was the best blue chip. Eni +0,8%, Saipem +2,2%.
Gold slows down, albeit slightly: 1.407,22 per ounce.
EURO AREA: SETTLEMENT FOR UTILITIES
European stock markets are expected to open slightly higher this morning after a flat session for European stock exchanges now projected on the G20 in Osaka. But behind the modest swings in the indices lies a diversified reality. The incoming message from the Fed has restored the luster to the banks (+1,2%), already depressed by the prospect of falling rates. On the other hand, a setback for utilities (-0,9%), the most indebted sector. But it was mainly energy (+2,8%) that supported the price lists.
Despite the recovery of the banks and the drop in the spread, Piazza Affari (-0,34%) is in the dark spot for the day. The index dropped to 21.057 points.
Italy will undertake with Europe to maintain the 2019 net debt close to 2% of GDP but it is unlikely to formalize a new program target for 2020. It is with these premises that Prime Minister Giuseppe Conte will travel to Osaka, where he will meet Jean Claude Juncker before the meeting in which, next Tuesday, the Commission will have to decide whether to launch the infringement procedure against Italy.
The other markets of the Old Continent were sluggish: Frankfurt +0,1%, Paris -0,25%, Madrid -0,01%, London -0,06%.
SPREAD TO 245, BTP AUCTION TODAY
In view of today's auction on 10- and XNUMX-year BTPs, the secondary market maintained the day's progress without any particular movements.
The spread on the 245-year Bund drops to around 250 basis points, a good drop from the start to XNUMX.
The placement of 6 billion euro of six-monthly BOTs was successfully closed with rates at the lowest since April, at -0,063%.
The yield on the 0,3-year German Bund at -XNUMX%, remains close to the new all-time low.
AUSTRIA PLACES 100-YEAR BONDS AT 1,171%
Meanwhile, the fall in yields continues. Vienna's offer rightfully enters the Guinness Book of Records: Austria has launched a new 5-year bond worth 3 billion at a negative yield of 0,435% and has reopened the offer of the "hundred-year bond" for one billion , i.e. the September 2117 bond with a 2,1% coupon assigned to a yield of 1,171%.
RAIN OF CORPORATE ISSUES: UNICREDIT, CNH, HERA
Bond investors' hunt for yield offers companies the opportunity to access funds on attractive terms. Corporate and financial issuers are taking advantage of this. Issues were announced yesterday alone from Unicredit (750 million euro non-preferred senior bond), CNH Industrial (500 million euro senior unsecured ten-year bond) and Hera (a 500 million euro green bond).
ATLANTIA IN THE SIGHT OF THE FIVE STARS
Among the worst in the Italian list Atlantia, which lost 4,2%. During a government meeting on Tuesday night, the 5 Star Movement allegedly asked again for the revocation of the concession from Autostrade per l'Italia, a provision immediately stopped by the League.
GENERALI DOES SHOPPING, PROMOTION FOR BUZZI AND FERRAGAMO
Campari was also down (-3%), on the lows for ten weeks.
The banks recover after the recent decreases: Unicredit +2,6%, Ubi +2,2%.
More ideas on managed savings: Banca Generali +1,5%.
Generali and the Spanish Catalana Occidente are negotiating the acquisition of the Portuguese company Tranquilidade: value of the operation around 682 million dollars.
Buzzi Unicem rises after Morgan Stanley's promotion to 'overweight'.
Stm (+1,85%) rises on the results of Micron Technologies, down but higher than expected.
Ferragamo +0,7%. Jefferies raised the recommendation to Hold from Underperform. Target from 18 to 21 euros.
GOES IN ORBIT TO DEBUT WORKSHOP STELLAR
Star Workshop, a company specializing in the optomechanical design and production of scientific instruments (telescopes), leaps by 54% on its debut on the stock market. Borsa Italiana announces that from today and until further notice it will not be possible to place orders without a price limit.
