"The economy is stronger today than it was in December, so action may need to be taken to avoid overheating." Calm in tone, optimistic in substance, Jerome Powell inaugurated the presidency of the Fed yesterday by reiterating his confidence in the return of inflation to the 2% target (“I think it remains the right target”, he added, in response to those who asked higher targets), but adding that he does not intend to overheat the economy, which is under pressure from fiscal stimuli. Operators interpreted the words of the new president as follows: 1) the more expansive fiscal policy will push the Fed to a more restrictive monetary policy; 2) the current situation is going in the right direction; 3) given the improvement in the economy, it is more likely that there will be four rate increases in 2018 rather than three.
MARKETS EXPECT FOUR RATES IN 2018
The markets have taken note of both the indications coming from Powell and the new positive signals arriving for the US economy, starting with consumer confidence, which has jumped over 130 points: it is necessary to go back to November 2000 to rediscover such euphoria. The GDP data, due out tomorrow, should certify that in the second half of 2017, American growth exceeded the 3% barrier.
The dollar has gained positions on the main currencies: the cross with the euro falls below 1,23.
The yield on government bonds has risen: the ten-year T-bond trades at 2,919%. The percentage of observers who expect more than three rate hikes this year has risen to 30% from 10%.
The Vix index, or fear index, rose above 17, in any case well below the critical threshold reached at the beginning of February.
The confirmation of the rise in interest rates, after the Powell hearing, held back the increase in the stock markets. The Dow Jones closed down 0,42%, S&P 500 -0,63%. NASDAQ -0,84%
Macy's (+4,6%) went against the trend after better-than-expected accounts. Oil fell slightly, conditioned by rising crude stocks in the USA. Brent trades at 67,44 dollars (-6 cents), Wti at 63,79 (-12 cents). In Piazza Affari, Tenaris (-1,3%) and Saipem (-1%) are slowing down. Eni -0,3%.
COMCAST OFFERS 31 BILLION DOLLARS FOR SKY (+20,36%)
The financial day was conditioned, on both sides of the Atlantic, by theComcast offensive (-6,3%), owner of Nbc, which surprisingly launched a hostile public offer for 31 billion dollars on Sky (+20%), already the subject of a proposal from Fox, intending to take over the entire package stock. But Rupert Murdoch will now face an offer 16% higher than his. At stake is not only control of the first European pay TV, but also the agreements between Walt Disney and XXI Century Fox, destined to pass under the banner of Mickey Mouse. Following Comcast's announcement, XXI Fox stock lost 2,9% on Wall Street, Disney 4,9%. The news reached Bob Iger, the CEO of Walt Disney, while he was in conversation with Emmanuel Macron: Eurodisney will double by 2021 with four new gigantic thematic areas with the aim of undermining the Eiffel Tower from first place among the attractions of the capital.
ONLY IN OCTOBER THE CAUSE BETWEEN VIVENDI AND MEDIASET
The duel on Sky promises to have major repercussions on the balance of the media in Europe, including Mediaset (+0,76%), which, with a capitalization of around 4 billion euros, looks like a dwarf compared to Sky (25 billion, equal to Vivendi) not to mention Comcast ($150 billion). But the Alfa TVs benefited yesterday from the atmosphere created by the blitz of the US network, which compensated for the news of the postponement of the resumption of the lawsuit against Vivendi for the failure to purchase Premium. The two sides will meet again only on October 23rd.
EUROPEAN EXCHANGES FLAT: INFLATION HOLDS DOWN
Jerome Powell's speech pushed European stocks into the red. The exception is Piazza Affari, which in any case limited gains in the final session: the Ftse Mib index closed with an increase of 0,08% at 22.724 points. Slightly decreasing Paris (-0,01%) and London (-0,1%). The Stoxx 600 index loses 0,2%.
Frankfurt -0,29%. German inflation came in weaker than expected at 1,4% from 1,6% in January. Inflation data for Italy and the euro area will be released today.
TREASURE AUCTIONS, MISSION ACCOMPLISHED. THE SPREAD GOES DOWN
The approach of the government bond market to the electoral deadline continues with Olympic calm. The spread between the BTP and the Bund fell yesterday by 5 points to 132. The ten-year BTP trades at 2%.
Yesterday the Treasury placed medium-long term bonds for 7,711 billion, slightly less than the maximum offer (7,75 billion) including the new five-year BTPs for the amount of 4 billion
ACCOUNTS/1. POSTE ITALIANE CHARGES THE MARKET
Some quarterly reports have given the Milanese price list a boost. The headline certainly goes to Poste Italiane (+5,8%) in the face of an exceptional trading volume (six times the average). According to the industrial plan, revenues should rise by 1% annually between now and 2022. The higher the growth in profit and the dividend will be: at least 0,42 euro, with a payout of 60%.
ACCOUNTS/2. MONCLER, DOWN LUXOTTICA AND CAMPARI PROMOTED
Moncler's accounts (+1,9%) did not disappoint thanks to higher-than-expected revenues. The reaction of the market on Ferragamo needs to be evaluated today: yesterday evening the maison announced the departure of CEO Eraldo Poletto on the occasion of the council on the accounts set for 8 March.
The market rejected Luxottica's balance sheet -3%. For Equita the guidance on the current year is not satisfactory, less brilliant than expected.
Campari also lost 3,3% after the disappointment of analysts that emerged during the conference call.
CREVAL'S COMEBACK CONTINUES
The banks are positive. The sector index rose by 1% against +0,5% for the European index. The big names are advancing: Unicredit +1,5%, Intesa +0,6%. The roundup of Creval rights continues: +26%, the share rises by 1,8%.
The effect of the battle in the City on the fate of Sky was not limited to Mediaset alone. The euphoria, even if the reason is not understood, has infected the entire media sector. The more subtle titles benefited from this: il Sole 24 Ore +15%, Class +8,8% and Poligrafici +5%.
IN THE SUMMER, FCA SAID NO TO GEELY
Weak automotive stocks down Brembo (-2,8%) and Sogefi (-4%) after the accounts and the zeroing of the dividend. Cnh Industrial was also down (-1,7%). The exception is Fiat Chrysler (+1%). Bloomberg claims that in the summer the Chinese of Geely, which recently bought a stake in Daimler, had presented an offer to merge with the Italian-American group. The operation was not followed up also due to Washington's hostility to Beijing's entry into the Jeep company.
