August, marred by missiles and hurricanes, before saying goodbye, gives the markets good news. The first concerns US consumption, so robust as to drag the GDP to a growth of 3 percent in the middle of the year. For employment (+237 new jobs in the private sector) it was the best month since January. Positive signals also came from China this morning: manufacturing activity rose again against forecasts (Pmi index at 51,7) . There was an expected slowdown in real estate investments due to the mini tightening imposed by the authorities, on the other hand the fabric of small and medium-sized enterprises is roaring again, stimulated by the recovery in exports. Europe also confirms its good momentum but, for once, the party is not spoiled by the rise of the euro: the dollar trades at 1,1894, slowing down from the peak of 1,2060.
And so trust grows, despite the threat from Pyongyang remains standing and in Houston, the fourth largest US city, the night curfew continues to avoid acts of looting. Meanwhile, from European ports, a fleet of tankers is setting sail for the United States to replenish the petrol stations, which yesterday rose to two dollars for the first time in US petrol stations. Hurricane Harvey could be the detonator for those investments in infrastructure that the president has not been able to start, stubborn as he is in seeking funds for the wall with Mexico. With little success. As has happened so far with the tax reform: Trump, who aims to repatriate the capital of corporations parked abroad, yesterday promised a cut in corporate taxes from 35 to 15%: Wall Street, tepid, does not believe it.
Positive Asian stock exchanges, thanks also to the resurrection of the dollar. Tokyo posts a gain of 0,6%, the strongest increase in the last two weeks. But the balance for the month, marked by the strength of the yen, is in the red: -1,5%. The Asia Pacific area was positive +0,2%. The market moved little in August: +0,7%. Well Sydney, Hong Kong -0,7%. The easing of tensions is reflected in gold prices which have fallen to 1.307 dollars an ounce from the peak of 1.324.
WARREN BUFFETT FIRST SHAREHOLDER OF BANK OF AMERICA
The good macro data favored the rise on the US markets. The Dow Jones+ climbed 0,12%. The S&P 500 +0,46% and, above all, the Nasdaq +1,05% are much more tonic. On the shields Bank of America (+1,75%) after the news that Berkshire Hathaway, Warren Buffett's investment company, became the first shareholder of Bank of America with 6,6% of the capital, after having exercised warrants for acquire 700 million shares at deep discount, more than tripling the investment made six years ago. The wise man of Omaha earned more than $13 billion from the deal. Citigroup rises by 1%, Goldman Sachs +1,2%, Wells Fargo, the other bank of which Warren Buffett is the largest shareholder, advances by 0,5%.
OIL IN DECLINE, THE STOP OF THE REFINERIES GIVES A BOOST TO SARAS
Still sales on oil which yesterday dropped by about 2% even though the trend in US stocks recorded a drop higher than expected: -5,39 million barrels against estimates of -1,8 million. Brent is traded today at 50,8 dollars, Wti at 45,90 dollars.
With the drop in crude oil, all oil stocks fell: Chevron -0,2%, Exxon -0,46%. In Piazza Affari little move Saipem (-0,07%), Eni +0,23%. Tenaris up (+1,1%): the company closed several plants in Texas as a result of the impact of Hurricane Harvey. Saras posted a 3,2% gain to €2,05, the highest price since early August. The stock of the refining company benefits from the forced closure of some plants in Texas, following the effect of Hurricane Harvey, which caused a temporary decrease in global refining capacity. The underlying picture of the sector remains complex above all due to the growing tensions in Libya, Iraq and Nigeria which could cause some supply difficulties for European refineries. Refining margins in the Med area remain at their highest for the year.
MOODY'S EFFECT ON EUROPEAN STOCK EXCHANGES
Opening expected to rise +0,5% this morning in Europe. Positive price lists yesterday on the wave of good macro indications arriving from both sides of the Atlantic. In Milan, the FtseMib index closed up 0,44% at 21.503 points. The other squares are also in tune: Madrid +0,52%; Frankfurt +0,47%; Paris +0,49%; London +0,38%. Today in Paris, Prime Minister Edouard Philippe will present the text of the labor reform, the result of intense consultations: a tough conflict is opening up between Emmanuel Macron and a part of the trade unions.
Moody's has revised upwards its growth estimates for Italy, Germany and France. For Italy in particular, it raised its GDP expectations for 2017 and 2018 to +1,3% from +0,8% and +1% respectively. The rating agency expects GDP to grow in the euro area this year by 2,1% in 2017 and by 1,9% in 2018 after +1,7% in 2016.
The euro area economy is projected to grow above potential this year and next led by strong push from Germany, says Moody's Global Macroeconomic Outlook report. “Strong indicators (surveys) from eurozone countries suggest that growth is expected to accelerate in the latter part of the year, while consumer confidence data at 16-year highs herald a consumption-led recovery,” said Madhavi Bokil, Moody's vice president and author of the report.
GERMAN INFLATION ACCELERATES
German inflation accelerates more than expected in August, although it remains below the European Central Bank's target. Consumer prices harmonized with other European countries (Hicp) rose by 1,8% over the year from 1,5% in the previous month, according to data released by the federal statistics office. Over the month, the increase is 0,2%. Today will be the turn of the August preliminaries on prices in France, Italy and the eurozone: estimates indicate a strengthening for the latter too, to 1,4% from 1,3% in July.
SPREAD FALLS, YIELDS FALL AT BTP AUCTION
Weak closure for BTPs but with a slightly decreasing spread, underlining the improvement in market mood after the strong risk aversion that characterized Tuesday's session following the new North Korean missile test.
After going up to 178 basis points yesterday (again in view of the 180 level, which has not been touched since July 14th), the Btp/Bund spread fluctuated during today's session within a range of no more than 3-4 points .
During the session, the movements were contained also for the Italian ten-year rate, between 2,06% and 2,09%.
Yesterday the Treasury placed 7,25 billion BTPs at 5 and 10 years (August 2022 and August 2027) and Ccteu, the maximum amount on offer: yields saw a slight reduction compared to the end of July, in line with the performance of the secondary.
The offer has so far covered around 71% of this year's financing needs (estimated by Reuters at 435 billion).
On the primary side, the day also saw a swap operation of the Portuguese Treasury (1,79 billion of the October 2022 security assigned and a total of around 1,74 billion repurchased on the June 2018, June 2019 and June 2020 maturities) and a short-term auction Greece, from 1,138 billion bonds at 26 weeks.
BUZZI SUPERSTAR WAITING FOR THE ORDERS AFTER HARVEY
Superstar title yesterday was Buzzi (+4,5%), driven by expectations of major works in Texas after the damage from Hurricane Harvey. The cement producer has been penalized in recent weeks by the weakness of the dollar and by rumors about the halt to the White House's maxi investment plan dedicated to infrastructure. Conversely, today's purchases would be linked to the prospects of major reconstruction work on the entire logistics system in Texas after the extensive damage caused by Hurricane Harvey. Buzzi generates about a quarter of Ebitda in the United States. Salini Impregilo also climbs (+1,8%).
THE ACCOUNTS OF CUCINELLI GIVE LUXURY A CHARGE
Also in the limelight is Brunello Cucinelli (+6,07%) after announcing growing results. The group closed the first half with Ebitda and profit with double-digit increases, slightly above analysts' expectations, and promises strong growth also for the full year and for 2018. Ebitda is 41,6 million, up 13,1%. Net profit rose to 19,9 million, +10,6%. In light of the sales of the winter collections "we imagine a 2017 with double-digit growth in both turnover and profits", says the president and CEO Brunello Cucinelli in a note who, given the Summer 2018 order collection, expects next year as well “nice double-digit growth”. Yoox +1,6%, rebounds after a few sessions of weakness. Moncler +1,9%. Campari +2,2%.
EXOR'S NAV RISES, TURNOVER OVER 500 MILLION FOR JUVENTUS
On the other hand, the potential costs of the hurricane on Partners do not weigh on Exor unchanged at 51,65 euros. Re, the reinsurance company 100% controlled by the Agnelli holding which represents 34% of the Nav. The reinsurance giant closed the first half with $230 million in profits, versus $169,3 in the first half of 2016. At the group level, the first six months recorded $916 million in net income attributable to shareholders, more than double to 431 million in the same period of 2016. The Net asset value (NAV) stood at 17,2 billion dollars, up 17,4% compared to 14,6 billion as at 31 December 2016.
Juventus deserves a separate discussion. In fact, the company chaired by Andrea Agnelli closed the first half with a profit of 72 million, which was positively influenced by the capital gains realized in the summer of 2016 thanks to the sales of Paul Pogba to Manchester United and Alvaro Morata to Real Madrid. The exact figure of the profit will only be known in the coming weeks when the Juventus board of directors will meet to approve the financial statements for the 2016-2017 financial year. But the 2016/17 balance sheet of the Juventus club should reasonably close with revenues (including those relating to the management of the player base) exceeding 500 million. The club announced that it has finalized the agreement with Schalke 04 for the acquisition temporary, until June 30th, of the footballer Benedikt Höwedes.
Earnings for Fiat Chrysler (+1,1%). Among the industrial stocks, Brembo (+1,6%) and Cnh Industrial (+2,2%) stand out. Stm +0,7%, Leonardo +0,2%.
THE USA BROKER PROMOTES ITALIAN BANKS
Contrast the banks: Unicredit -1,7%. Between 25 and 28 August last, Norges Bank first reduced the stake it holds in the bank's capital to 2,862% from 3,248% and then subsequently increased it to 3,202%. Above parity Intesa (+0,1%) and Banco Bpm (+1%).
The US broker Keefe, Bruyette & Woods, specialized in research on the financial sector, in a report adjusted upwards all the target prices of the companies followed by its analysts, indirectly rewarding the improvement in Italy's macroeconomic scenario.
In order: Unicredit (Outperform) goes to 18,21 euros from 16,62 euros. Intesa (Outperform) at 3,36 euros from 3,28 euros. Mediobanca (Market Perform) at 9,25 euros from 8,85 euros. Banco Bpm (Market Perform) at 3,11 euros from 2,85 euros. Ubi (Outperform) goes to 4,59 euros from 4,56 euros. New decrease for Banca Intermobiliare (-6,7%). In assets under management, Finecobank stands out positively (+2,3%).
TELECOM AND MEDIASET HOLDING DOWN. VIVENDI ACCOUNTS TODAY
Enel +1,1% after Banca Imi raised the stock recommendation from hold to add, with the target price rising from 4,5 to 5,7 euros. The Romanian investment fund Fondul Proprietatea is in talks to sell the shares held in the local subsidiaries of Enel and the French company Engie.
Little move Telecom Italia (-0,1%). Today Vivendi will release the data for the first semester. Mediaset is still in the red (-1,34%). Among the best is Beni Stabili (+5,6%), which is benefiting from the promotion received from the French parent company Fonciere des Regions. Morgan Stanley has upgraded the rating on the group active in the French real estate sector from equal weight to overweight and increased the target price from 88 to 97 euros.
