Red start for the markets in the week of Christmas. The latest negative news on the pandemic front and the unknown Brexit nullify the effect of the agreement on the US budget. The dollar appreciates again after weeks of heavy declines and the pound falls, penalized not only by the new round of closures and restrictions announced on Saturday by the British government, but also by the new stall in negotiations on leaving the European Union.
The European stock exchanges are in free fall, with Milan scoring by mid-morning (-3,12%). Also in deep red are Frankfurt (-2,73%), Paris (-2,91%) and Madrid (-3,6%). London suffers (-2,13%).
Nasdaq futures up 0,3%: S&P500 futures down 0,1%.
This morning, in Asia, Tokyo's Nikkei is down 0,7%, while Hong Kong's Hang Seng is on par, Seoul's Kospi is up 0,2% and Mumbai's Bse Sensex is barely moved.
The CSI 0,5 index of the Shanghai and Shenzen stock exchanges rose by 300%. Tonight, the People's Bank of China injected 110 billion yuan into the system, about 17 billion dollars. The meeting of the Central Bank of China with the decision on interest rates is expected today.
On the currency, the dollar advances, the British currency suffers: euro-dollar exchange rate 1,218 (-0.6%); euro-sterling at 0,912 (+0,7%).
Oil marks a sharp decline: -3%, to 50,6 dollars a barrel. Gold returns to 1.901 dollars an ounce (+1%).
ISOLATED LONDON, TWO CASES EVEN IN ITALY
The last scourge of a bad year is called B.1.1.7. AND the most aggressive variant of Covid-19 which is spreading rapidly in many countries. The British mutation was isolated and also identified in Italy by the scientific department of the Celio military hospital in a positive patient who returned from the United Kingdom in the last few days: the man and his family are in isolation. His partner also tested positive. The German presidency of the European Union has invited the representatives of the member countries to an emergency meeting this morning to coordinate the European response to the new variant of the virus.
TODAY THE OK TO THE VACCINE FROM THE EU AUTHORITIES
The emergence of a “faster but not deadlier” strain has made an already difficult Christmas all the more dramatic. Italy, followed first by Belgium, Holland and Germany, then by the rest of Europe, has suspended flights and rail connections with England. Also isolated from Scotland. What makes the blockade more dramatic is the risk of a Brexit no deal, due to the lack of agreement on fisheries.
The news that Congress approved the economic aid package at the last minute was instilling a note of optimism in the markets: 900 billion in total, including direct contributions to families, 600 billion, and interventions in favor of health, education and other urgent chapters. Each American adult will receive $600, rising to $1.200 for couples plus $600 for each dependent child.
The other good Christmas news should come from the EMA, the European Medicines Agency which today, slightly ahead of its time, should pronounce itself on the authorization of the Pfizer/BioNtech vaccine, a fundamental step in administering the first doses starting from week following Christmas.
TODAY SUMMIT ON THE RECOVERY PLAN
A decisive week for the Italian Budget Law, which is in the pipeline in the Chamber, well behind schedule and has not yet been examined by the Senate.
Prime Minister Conte will meet today with the delegations of the individual majority forces to update the preparatory work for the Recovery Plan. Today the premier and ministers Amendola and Gualtieri will meet the delegation of the M5S and the Pd. The meeting with Italia Viva and Leu is scheduled for tomorrow.
On the macro front, the European Central Bank's monetary policy meeting is scheduled for today, with the press conference by President Christine Lagarde.
TESLA JOINS THE S&P INDEX
Seasonal teasing against experts and analysts is multiplying, this time guilty of excessive prudence: the forecasts for 2020, on average, pointed to an average growth in price lists of 2,7%. The reality was much more prodigal with increases around 14% of the main share lists. Wall Street, moreover, presents itself at the appointment with the Christmas week with two exceptional trump cards.
Tesla enters the S&P 500 index today with a capitalization of 658 billion in sixth place among the Bigs behind Apple, Microsoft, Amazon, Alphabet and Facebook. During 2020, the stock of the electric car rose by 730 percent. In the last month, pending landing in the S&P (and inclusion in index-linked ETFs), the increase was 70 percent.
BUY BACK LICENSE: US BANKS IN BREATH
A fiery finale is expected for the big banks (Bank o America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo) after the green light from the authorities to distribute dividends and buy backs after the long ban.
Following a long impasse, the new governance of Essilor/Luxottica has been decided.
THE ESSILUX DIVIDEND CELEBRATES THE VICTORY OF DEL VECCHIO
Test week also for Piazza Affari, which is increasingly closer to Paris.
The stock market examines the dividend for the 2020 financial year of 1,15 euros per share (which will be detached on December 23 and paid on the 28) for the shareholders of Essilor Luxottica in which Leonardo Del Vecchio has 32,3% of the capital versus 4,1% of Essilor employees. Hubert Sagnières, former CEO of Essilor and supporter with Del Vecchio of the birth of the global giant of lenses and frames, takes a formal step back from all executive positions pending the new governance in which the Italian entrepreneur will assume the position of president of Essilux.
STELLANTIS AT THE GO. MANLEY IN USA WITH A SUPER BONUS
The debut of Stellantis, the holding company that will control FCA and PSA, is approaching. All that's missing is the OK from the EU authorities, perhaps already arriving today. The president of FCA, John Elkann, in the letter sent to the employees of the group anticipated "Mike Manley will be asked to assume the role of Head of Americas, working alongside Carlos Tavares and continuing to make available his great experience, l energy and determination to make Stellantis the extraordinary company we are sure it will be”. The US manager has monetized the loss of number one status: he will be entitled to a bonus of 7,15 million euros against 1,7 for Tavares.
EQUITA: A RICH CAPITAL GAIN FROM OPEN FIBER FOR ENEL
Spotlights also on Enel after the decision to proceed with the sale of 40-50% of Open Fiber to the Macquarie fund. Equita's analysts speak of "positive news for Enel, which puts an end to a long process of negotiations and generates a significant capital gain for the group in the order of 1,5 billion euros in the event of the sale of 40% and 1,95 billion in the event of a 50% sale, or around 2% of the group market cap”. There are positive aspects for Tim as well, because the uncertainty about Enel's position has disappeared.
Today De Longhi issues a coupon of 0,54 euro per share (to be paid tomorrow).
(Last update: 11.30 am on 21 December).
