North Korea is likely planning another missile test for April 15, to mark the birth anniversary of the country's founder. But this time the US is ready to react. The aircraft carrier Carl Vinson travels to the Asian peninsula. Furthermore, "we are about to send a great Armada into those waters" Donald Trump declared last night in an interview with Fox, reiterating that "if China helps us, it will be welcome, otherwise we will do it ourselves". But if Beijing cooperates "it will be much easier to reach a trade agreement with them".
The Syrian front is no less hot. Secretary of State Rex Tillerson, in Moscow today, accused Russia of wanting to cover up Assad's crimes. “But we don't want to get more involved in Syria,” Trump assured.
Geopolitics is now firmly in first place on the market agenda. Confirmation comes from the new, sharp rise in the yen, which jumped to 109,35 against the dollar and to a high against the euro (116,02, down for 12 sessions), slipped to 106 against the US currency. Gold continues to rise (1,277 dollars an ounce), as does the Bund. In short, the typical reaction of the hottest moments on the international scene.
The run of the yen held back the Tokyo Stock Exchange (-1,3%), while the other Asian stock exchanges were also weak. The won, the currency of South Korea, fell sharply. The Chinese renmimbi also weakened. Stock markets in China are down: Hong Kong -0,2%, Shanghai -0,3%. Mumbai -0,4%. Seoul is up slightly after five straight down sessions.
WALL STREET RECOVERS IN THE FINAL. UNITED APOLOGIZES
Closing down also for US stocks, which also recovered compared to the initial losses: the Dow Jones index fell by 0,03%, S&P 500 -0,14%, Nasdaq -0,24%. The Vix Volatility Index rose 7% to levels not seen since November.
Trump yesterday reiterated his intention to abolish the finance rules set by the Dodd-Frank law and replace them "with something else".
Shares of United Airlines are down (-1,1%): a video portrays the pushing and punching of a passenger kicked out of the plane because there was no more room. The company has pledged to change its overbooking policy.
OPEC CUTS OIL PRODUCTION AGAIN
Meanwhile, the price of oil is rising again. At the Nymex, WTI for June deliveries rose 0,28%, to 53,63 dollars a barrel, pending the publication of data on US inventories today. Brent trades at 56,40 dollars. OPEC production in March fell by 1,2 million barrels below the threshold set by the November agreement. Saudi Arabia aims to extend the cut to crude production for another six months. The proposal should be made in the cartel meeting scheduled for next May.
In Piazza Affari, Eni closed slightly higher: Saipem -1,2%, Tenaris -0,4%.
APPLE CUT DIALOG CHIPS. SUFFERS STM
Apple's moves (-1,08%) have sown panic among European chip makers (Stoxx of the technology sector -1,3%). The US giant is alarming its suppliers, this month it closed relations with Imagination Technologies.
Yesterday was the turn of the German Dialog Semiconductor (-13%). A report by analyst Karsten Iltgen of broker Bankhaus Lampe claims that the company is about to lose one of its main customers, namely Apple itself, which would have identified other suppliers to produce a chip that reduces battery consumption, in view of the start of production of the iPhone 8. The repercussions on Stm (-3,6%), another major Apple supplier, were immediate. Stm gains 32% since the beginning of the year, after a leap of 72% in 2016. Infineon -1,5%.
SALT MELENCHON, NERVOUS EUROPEAN BAGS
Down day also for the European Stock Exchanges. Caution prevails in view of the French presidential elections: the polls still show Emmanuel Macron as the winner against Marine Le Pen, but the distance between Macron and the candidate of the Eurosceptic left Jean-Luc Mélenchon has narrowed.
The FtseMib index of Piazza Affari closed down by 0,4% at 20.109 points after reaching a low for the day at 19.976 points. The index thus defended the threshold of 20.000 points. The Paris Stock Exchange lost 0,1%, Frankfurt -0,5%, Madrid -0,2%. Positive ground London (+0,2%).
In Europe there was a disappointing figure on February industrial production in the euro area, which fell by 0,3%. On the other hand, in Germany the Zew index, which measures the confidence of financial investors, improved better than expected in April: the index rose to 19,5 points (the highest since August 2015) from 12,8 in March.
BTP AUCTION TODAY. ON OFFER PAPER FOR 10 BILLION
Political uncertainty has given wings to the Bund in the center of robust purchases. The German 0,20-year yield is stable at 2,25%, that of the BTP has risen to 2,23% (from 204%), the spread widens to 207,4 basis points after reaching a record high of 13 for over three years (February 2014, XNUMX).
After the twelve-month BOT placed yesterday for six billion euros, today's appointment provides for up to 10 billion spread over three, 7 and 20-year BTPs together with an off-the-run, the March 2030 bond with residual life 13 years. In the spotlight in particular the new three-year period, June 2020, for which the Treasury has set a coupon of 0,35% compared to 0,05% of the previous benchmark October 2019.
On the Mts gray market, the title closed yesterday at 0,47% against 0,37% in mid-March.
DEF APPROVED, GDP WILL RISE BY 1,1%
“Today we can say that Italy is emerging from the worst economic crisis in its history. From 2008 to 2013, following a double-dip recession, GDP decreased by almost 10 percentage points, industrial production by about a quarter, investments by 30%, consumption by 8%. This was stated by the governor of the Bank of Italy Ignazio Visco speaking to the European Parliament.
A few hours later the Council of Ministers met for the launch of what Minister Pier Carlo Padoan defined as a "very substantial package, which also contains the so-called maneuver, but which is only a piece of the whole". The corrective maneuver approved by the government is worth "0,2% of GDP, i.e. 3,4 billion, and provides for structural interventions that will increase in value in the years to come". This was announced by Prime Minister Paolo Gentiloni and Economy Minister Pier Carlo Padoan, reporting "that the details of the maneuver will be known in the next few days".
The prime minister wanted to underline that the maneuver "is not depressive, there are measures to relaunch the economy". GDP will grow by 1,1% in 2017, instead of 1% as previously estimated. The deficit/GDP should settle at around 2,1% at the end of the year.
PRVATIZATIONS, BUT ALSO A 20 BILLION PLAN VIA CDP
The government intends to reactivate the privatizations, but without losing control of the companies and without giving up the collection, estimated at around 5 billion. But the Ministry of the Economy, according to Reuters, is studying a more ambitious plan: the transfer of shares in investee companies to CDP to cut the public debt. The plan, dubbed Capricorn, could involve equity investments worth at least 20 billion euros. CDP could finance the acquisition with the issue of preferred shares that could be sold to institutional investors who will be able to enjoy a preferred dividend.
BANKS, BAD LOANS RISE TO 203 BILLION
“Italy is not a time bomb” due to the situation of the banking system, underlined Visco in Brussels. Yesterday the "Banks and Money" bulletin revealed that in February net bad loans fell to 77,023 billion euros from 77,320 billion in January, while the same cannot be said of gross bad loans, which jumped to 203,052 billion euros.
Of this figure, Visco said, "only about 20 are held by banks, significant and less significant, which are currently experiencing difficult situations", i.e. Monte Paschi (today's meeting) and the two Veneto banks, Popolare di Vicenza and Veneto Banca, who held a joint press conference yesterday.
BANCO BPM AND UNICREDIT SUFFER
The credit sector was negative in Piazza Affari: banks yield an average of 1,9% against the -0,6% of the European index, albeit weighed down by the thud of Banco Popular (-9,67%), which on Monday announced a new capital increase. Banco Bpm lost 4,35%, Unicredit about 3%. Intesa and Mediobanca drop by 0,9%. Insurance is also down. Generali -0,2%, Unipol -0,7%.
IN FLIGHT RECORDATI AND MONCLER. AIRCRAFT IN ORBIT
Worth mentioning was the excellent day of some made in Italy multinationals. Leap for Autogrill (+8,2%), after the announcement that the company has decided to proceed with a radical restructuring which provides for the spinoff of the Food & Beverage operating activities in Italy from the rest of the company. In particular, analysts believe that, once separated, the foreign assets would be valued at higher multiples, in line with those of competitors.
Positive Recordati: +1,4% at 32,94 euros. The title of the Italian pharmaceutical group has just announced data on consolidated revenues which grew in the first quarter of the year by 13% to 342 million euros. The good result was also obtained thanks to the acquisition of Italchimici and Pro Farma. Excluding the newly acquired companies, the result is still very strong. In fact, sales in the first quarter rose by 8%. The complete results will be announced on May 4th.
Moncler stood out with an increase of 0,4% which pushes the quotation to the new historic record of 20,86 euros. Since the beginning of the year +31%. Positive signals for the Luxury sector came this morning from Lvmh which gained 1,6% on the Paris Stock Exchange.
Avio's rally continues (+3,7%) after the great success at its debut in Piazza Affari yesterday. The stock rose 4,5% to €14,0 on Monday.
ATLANTIA SELLS 5% OF AUTOSTRADE. FCA STILL DEALS WITH MARELLI
Atlantic +1,6%. Allianz would be one step away from buying the 10% of Autostrade per l'Italia put up for sale by the Benetton company for a value close to 2 billion. A price that would allow Atlantia to record an excellent capital gain.
Fiat Chrysler -0,21% after a positive start: a Korean site claims that an agreement has been reached with Samsung for the sale of Magneti Marelli.
Telecom Italia fell by 0,2%, positive Enel (+0,6%), Terna (+0,1%) and Italgas (+2%). Jefferies has raised the recommendation from hold to buy, with the target price going from 3,6 to 4,6 euros.
Snam (+0,84%) rose to 4,8% from 4,37% at the end of 2016, the stake held by Romano Minozzi in the capital of Snam. Jefferies raised the target to 3,9 euros from 3,6.
