From rags to riches at supersonic speed. Wall Street's three major indexes rebounded on Boxing Day from their lowest since the fall of 2017 reached on December 24, in what will be remembered as one of the worst Christmas Eve. Following this morning, Asian markets also rallied after the pre-Christmas shivers. The ghost of the recession, evoked by the sharp declines in US price lists, seems to be pushed back. But the trend of gold, which remained close to the highs since June at 1.268 dollars an ounce, shows that the markets are still on the fence. Starting from Piazza Affari today grappling with the developments of the Carige case, the latest emergency in the banking system of the Bel Paese.
DOW JONES RECORD LEAP: 1086 POINTS
The Dow Jones index recorded yesterday the sharpest rise in a single session since 2009: 1.086,25 points, or a leap of 4,98%. Among the Dow Jones blue chips, Nike +7,5%, Apple +7% and Visa +7%. The S&P 500, which slipped on the 24th to just two points from the recession threshold which is triggered when the rise exceeds 20% from the maximum, has accumulated a gain of 116 points (+4,96%). The Nasdaq is even better (+5,84%).
AMAZON +9,4% LEADS THE RACE, POWELL DOES NOT TOUCH
Various factors contributed to triggering the bull rally:
1) the "spectacular" trend in consumption, as defined by Amazon (+9,4%); according to Mastercard, purchases for the holidays have reached a record 850 billion dollars (+5,1%).
2) the reassurances coming from Donald Trump's staff on the Fed: "Powell is 100% sure he will remain XNUMX%," said White House chief of staff Kevin Hassett (but he risked being fired this week);
3) the formidable rebound of oil, supported among other things by the declarations of the Russian Energy Minister, Alexander Novak, who guaranteed that Moscow intends to respect the action pact with OPEC to support prices. Brent has shot up 8% over 54 dollars from 49,8 dollars the day before, the lowest since the summer of 2017. US crude trades this morning at 46 dollars + 9%.
Rises, albeit less spectacular, also for the Asian stock exchanges. Tokyo leads the race (+5%) which recovered from Monday's collapse in the wake of American stock exchanges, Hong Kong and Shanghai gain only 0,6%, Seoul 0,2%. Larger positive changes in Taipei (+1,6%) and Sidney (+1,7%).
US INDEXES IN RECESSION ZONE AT CHRISTMAS
The markets are off to a flying start after the most troubled Christmas for Wall Street hit by hurricane Donald Trump. It is worth briefly summarizing the great decline which confirms the great volatility of the price lists at the end of the year. We need to go back to 1918 to find such a dramatic session on Wall Street, which in half a trading day, on the 24th, dropped 650 points, or 2,9%. A collapse that had an immediate echo in Tokyo which, with a loss of more than 5%, slipped below the 20-point barrier for the first time since September 2017.
MNUCHIN'S SUPPORT SCARES THE MARKETS
But how to explain the collapse? Donald Trump, wrote the Washington Post, wanted to play the Grinch, Santa's enemy, ruining the investor party. The president, in particular, blocked the approval of the federal budget in response to the Democrats' no to funds for the wall on the Mexican border and has repeatedly aired the dismissal of Federal Reserve chairman Jerome Powell, "guilty" for the increases in rates which, according to Trump, are at the origin of the decline on Wall Street. However, the situation was triggered by the decision of Treasury Secretary Steven Mnuchin to get in touch with the six most important banks to take stock of the liquidity available to the system in an emergency. A move which, far from reassuring the markets, further raised the alarm level.
The rebound on Boxing Day partially straightened out the year-end balance: 2018, in fact, risks closing with a double-digit average loss, around 12%, the worst balance since 2008, the year of the Lehman Brothers crash , when the world stock exchanges accumulated a dramatic -43%.
BUSINESS PLACE, ONLY 7 STOCKS ABOVE JANUARY LEVELS
Piazza Affari reopens its doors today after closing both Friday's session (-1%) and the last week (-3,1%) down. Since the beginning of the year, the loss is 16%. Only 7 out of 40 blue chips recorded a gain: Campari +18%, Poste +12%, Moncler +6%, Terna +5,5%, A2A +5%, FinecoBank +2% and Enel +0,5%.
RECORD CONTRACT FOR THE BIANCONERI, AMPLIFON PROMOTED
Among today's news is the renewal of the main baskets. In the most important index, the Ftse Mib, Amplifon and Juventus make their entry, taking the place of Banca Mediolanum and Mediaset relegated to the Mid Cap index where Cairo Communication and Piovan enter, world leader in the supply of industrial automation systems and solutions engineering for the plastics industry.
Juventus are making their debut in the index this morning with a nice business card: the black and white company has extended the partnership with Adidas until 30 June 2027. The new agreement provides for a guaranteed minimum of 408 million euros for 8 seasons from 2019- 2020 plus variable and royalty fees on sales. For the current season, the Adidas contract is therefore valued at a minimum of 42 million euros plus variable fees. From next season the average value will be 51 million euros.
HIGH VOLTAGE SEAT FOR CARIGE
In Piazza Affari red alert instead for Banca Carige. In last Friday's shareholders' meeting, the shareholder Malacalza Investimenti, with a strong 27,5% stake, failed to cast his vote for the bank's capital increase by missing the quorum. The day after, the vice president of the council Lucrezia Reichlin (Malacalza list) and the councilor Raffaele Mincione (minority shareholder with 5,4%) resigned. Malacalza did not have the quorum (40% of the share capital was present) to postpone the decision until after the presentation of the plan, i.e. in February. "There's no time, it can't be done in March, they reject us, they kill us all", Carige president Pietro Modiano let himself go hotly. To avoid the worst troubles, the Supervision of the ECB will take the field.
Also worth following is Tip: the subsidiary Tipo has signed the binding contract for the sale of all the equity investments in iGuzzini Illuminazione to the Swedish group Fagerhult for 385 million euros.
TREASURE, THE FIRST AUCTIONS OF 2019 START
The spread starts again this morning from 257 basis points. The Treasury kicks off the first auctions with 2019 regulations: starting today with six-month BOTs for an amount of 6,5 billion and with the issue of Ctz (amount of 1.5-2 billion) maturing November 2020 - We continue tomorrow with the medium-long term offer: one five-year and two ten-years (expiring in February and December 2028) will be auctioned.
