The markets are preparing to close, without too many regrets, a difficult October, one of the worst months for the world's stock exchanges in recent years, under the pressure of rising rates, increasingly dangerous tariffs and the uncertainties coming from the euro area , which added the uncertainty of the after Merkel to the thorns of Brexit and Italy.
But the Bull, at least in Asia and on Wall Street, is not giving up. The markets hope that the ongoing global deterioration, so visible in Europe, will move the monetary authorities, starting with the Fed, prompting Jerome Powell (and Mario Draghi) to imitate the Bank of Japan, intent on confirming the hyper-expansionary policy and the People Bank of China which this morning launched a renminbi issue to support Hong Kong's liquidity.
EVEN IN ASIA THE ECONOMY IS HOLDING DOWN. BUT THE PRICE LISTS GO UP
And so, despite the negative positive data from the Chinese manufacturing index, just above the boundary between growth and recession, the CSI 300 index of the Shanghai and Shenzhen stock markets gains 1%, partially limiting the damage of the dark month ( -8,5%). Same script in Hong Kong which rises by 0,6% (-9,5% in October).
Japan is also starting to close up by 1,7% thanks to the push of the information technology companies and the semiconductor industry: in October, however, the decline was close to 10%. Industrial production data for September is worse than expected. The yen weakens to 112,3 against the dollar. The Chinese yuan moved little, but around the lows of the last ten years against the dollar.
South Korea is also experiencing a sharp decline in its manufacturing industry (-8,9%), the worst drop since the autumn of 2009. The Kospi index, however, rises by 0,3%.
OIL BOUNCES TO 76,3 DOLLARS
Brent oil rebounded overnight and is now at 76,3 dollars a barrel, from -1,9% at the close. In Piazza Affari yesterday Eni -0,2%.
CHIPS FLY. ARM-IRON ON TECH WITH BEIJING
A day marked by volatility also for Wall Street, but with a clear recovery in the end. The Dow Jones index rebounded 1, S&P 77 +500%. Nasdaq +1,55% under the pressure of the resurrection of the chips: +1,58% the semiconductor index, led by Intel +4,2% and Nvidia +5,2%. The latest, bitter clash between Washington and Beijing is taking place on the field of semiconductors: yesterday the US placed heavy restrictions on Fuijan Jinhua, one of the most promising Chinese technology start-ups, raising the ire of the authorities.
FACEBOOK: MORE USEFUL, LESS REVENUES.
Difficult to interpret Facebook accounts. Profit climbed 9% to $5,13 billion, better than expected. Below forecasts, revenues rose by 33% to 13,7 billion, less than analysts' estimates. There were 1,49 billion active users on a daily basis, +9% year on year, but slightly less than expected. %. On the Nasdaq, the stock closed up 2,9% and on the After Hours it was up another 3,4% to $151,29.
THUD OF GENERAL ELECTRIC. DIVIDEND OF ONE CENT
On the other hand, the thud of General Electric (-8,8%) after the presentation of the data for the quarter, below expectations, is easy to read, plus there are the investigations into its accounting practices. The company has awarded a dividend of one cent per share.
EUROPE SLOWS DOWN, ITALY STAGNANT
The slowdown in the economy has not spared Europe. Indeed, Monday's rally in markets was wiped out by disappointing data on the euro-zone economy, just +0,2% growth in the third quarter, the weakest trend increase since mid-2014. Again, markets have recorded the news, however expected, without exaggerated reactions: the slowdown could induce the ECB to slow down the end of the stimuli also because the latest indications confirm that it is no longer a temporary slowdown.
THE EU ASKS FOR NEW CLARIFICATIONS FROM THE GOVERNMENT
But the European difficulties are much less frightening than the stagnation of the Italian economy, substantially at a standstill in the third quarter. A slowdown which, in the words of Istat, "comes after a phase of progressive deceleration and implies a lowering of the growth rate which passes to 0,8% from 1,2% in the second quarter". The Italian economy is therefore slowing down both as a result of the international situation and the fall in investments, both in the car and in machinery. At this point, the government's estimate appears very optimistic and, consequently, the nominal deficit target of 2,4% set by the government also appears to be at risk. An alarm that is confirmed in a new letter from Brussels signed by Marco Buti, director of economic affairs of the EU, which asks for an explanation of the "relevant factors" that prevent the debt from falling.
The economic situation also weighs on the single currency. The euro traded this morning at 1,134, at its lowest in 14 months.
The macro data froze Piazza Affari which was advancing by 0,6% in mid-morning. However, Milan limited the decline to 0,22%, however sufficient to bring the index down below the 19 mark, to 18.998 points.
Weak other eurozone markets. Frankfurt (-0,45%), Paris (-0,22%) and Madrid (-0,18%) lose. London holds, with a clear increase in Zurich (+1,13%).
BTPs FLY TO 3,49%, SPREAD TO 312
But the most disturbing figure concerns the debt market. The spread closed the day sharply higher, on the highs of the session, well beyond the 300 point barrier. The spread between the Italian and German 312-year bonds reached 298 basis points, from 3,5 points at yesterday's close, while the yield on the Italian 3,49-year bond came to touch the threshold of 3,35%, to 3,36%, with a strong up from 2,58% on Monday and XNUMX% in the morning auction where the five-year bonds were placed at XNUMX%.
What are the consequences for the Treasury? The higher cost of debt financing since April has led to an additional burden of 6,5 billion euros. Yesterday's auction alone cost 689 million more.
FCA SWINGS DESPITE THE SUPERCOUPON
The negative economic situation also affected the performance of industrial stocks.
Fiat Chrysler loses ground (-3,2%) on the day of quarterly. Immediately after the publication of the accounts, the share showed a recovery, favored by the news of the distribution of an extra coupon (2 billion euro) made possible by the proceeds from the sale of Magneti Marelli and the confirmation of the return to the ordinary dividend from next spring. But quotations soon returned to negative ground, thanks to the negative guidance on the trend of cash on hand and the decrease in net profit (-38% to 564 million).
Leonardo down (-1,5%), even if above the minimums of the session. The negative effect of the accident that occurred on Saturday evening in Leicester continues, when an Agusta Westland AW169 helicopter crashed shortly after take-off.
On the other hand, Pirelli (+2,98%) made a strong recovery. STM moved little (+0,2%), but the strong gain of the semiconductor index last night in the US gives hope for a strong rebound after last week's losses.
TELECOM SALE: RAIWAY AGAIN ON PERSIDERA
Telecom Italia's positive streak continues (+2,02%) pending the conclusion of the sale of Persidera. Raiway has improved by 10%, to about 220 million euros, the offer submitted to the shareholders (Tim with 70% and Gedi) to counter the sale to the US fund I Square.
Other positive notes come from the cement sector (Buzzi +1,3%, Cementir +3,08%) and from Saras (+2%) after the publication of the nine-month results. Kepler Cheuvreux raised the recommendation on the stock to "buy" from "hold".
BANKS HOLD, MEDIUM-SIZED ENTERPRISES SUFFER
The banks did not pay yesterday the effect of the sharp rise in the spread in the afternoon. Thus the rebound of Banca Bpm (+1,66%) and Ubi (+0,7%) continued. Mediobanca (+0,3%) took advantage of the rounding of its stake by BlackRock, which rose to over 5%. The big names are weak: Unicredit -0,7%, Intesa -0,2%.
Strong decline of Cerved (-8,4%) following the results of the nine months closed with revenues, margins and profit growing, but below market expectations.
Things didn't go any better for Biesse (-8,67%) after the publication of the results and guidance for the entire year.
Datalogic (-4%) and Ima (-3,5%) also fell.
