The Wall Street landslide does not stop. Donald Trump's anger against "those madmen at the Fed" has no limits, even if the President assures: "I don't intend to fire Powell, but they are too aggressive on rates".
Trump now has another reason to froth anger just a few days before the US mid-term elections: China does not waver in the face of the tariff barrages fired from the White House. Indeed, Beijing's exports recorded a leap of 16,7% in September, a strong acceleration compared to the +8% in August. The Chinese trade balance is in excellent health: +213 billion, against the 136 billion expected. It is probable, given the numbers, that next week China will be able to confirm its third quarter GDP growth at 6,6%.
The Chinese data have restored some serenity to the Stock Exchanges, exhausted by the sales that have invested Wall Street, held back by the increase in interest rates and by the trade war with Beijing.
YUAN STRENGTHENS, CHINESE GDP UP +6,6%
Tokyo, down 3,5% in the first part of the session, almost eliminated the deficit after the publication of the data. Taiwan (+0,7%) and Hong Kong (+0,4%) also returned to positive ground.
The CSI 300 index of the Shanghai and Shenzhen stock exchanges gains 0,8%. The Stock Exchanges of South Korea (+1,3%) and India (+1,3%) also rose. The yuan strengthened to 6,90 against the dollar, from 6,90 the day before.
S&P, SIX DAYS IN THE RED. TRUMP VS. THE FED
It is probable that the Asian push could contribute to a less dramatic end to the week than yesterday's sales, in the US and in Europe, lead to fear.
Yesterday the Dow Jones lost another 2,13%, the S&P 500, in its sixth day of decline, 2,06%. NASDAQ -1,25%. Trump's invectives against the Fed (at least exaggerated) cover a certain unease of corporations, worried about the fallout from the tug of war with China.
Meanwhile, the 3,17-year US bond trades at 3,20%, one step away from the society of pain, around XNUMX%, beyond which it risks unleashing a shower of sales on riskier assets. Yesterday all real estate companies and banks were down. JP Morgan, Citi and Wells Fargo will announce their quarterly accounts today.
GOLD RISES, THUMP OF OIL
Gold rises again: +2,5% to 1.223 dollars an ounce. The euro appreciates for the third consecutive day at 1,160 against the dollar.
Oil falls: Brent -3,4% also because US strategic oil stocks rose much more than expected, by about six million barrels.
Oil prices down on Wall Street (-3%). Tenaris (-4,22%), Saipem (-3,25%) and Eni (-2,75%) fell in Piazza Affari.
EUROPE IN RED. BUSINESS PLACE AT A MINIMUM FOR 19 MONTHS
This morning we start again with Piazza Affari at its lowest since March 2017, the ten-year BTP at 3,55% and the Bund at 0,51%.
The tsunami that has hit Wall Street since Wednesday has also produced serious troubles in the Stock Exchanges of the Old Continent, grappling with old and new ailments.
In Milan, the FtseMib index fell by 1,85%, closing at 19.356, on the lows of the last 19 months.
The other markets are in deep red for the second consecutive day: Paris -1,92%; Madrid -1,69%; London -1,94%; Zurich -2,79%.
BAYER AGAINST THE CURRENT THANKS TO A US JUDGE
Frankfurt (-1,48%) also slipped to its lowest level since February 2017 on the eve of an important electoral appointment for the Eurozone. On Sunday 14 October, Bavaria, one of the richest Lands in Germany, will vote in Bavaria, and this will be a key test for the strength of the coalition that supports Angela Merkel's fourth chancellorship.
Against the tide Bayer (+3,08%). A San Francisco judge said he is considering the case reduce Monsanto's $289 million fine for the accusation of having given cancer through the use of glyphosate to a gardener and wanting to retry the trial. Monsanto now belongs to the German group.
SAVONA INSISTS: IF NECESSARY, CORRECTIONS TO THE MANEUVER
In Italy, the Chamber and the Senate approved the postponement of the balanced budget to after 2021. An absolute majority of 165 votes was obtained in Palazzo Madama (107 against and 5 abstentions), while in Montecitorio the votes were 333. The Lega-M5s government, in setting the deficit at 2,4% of GDP in 2019, worsens structural debt by 0,8 points, which remains fixed at 1,7% in relation to gross domestic product until 2022.
European Affairs Minister Paolo Savona reiterated yesterday that, in his opinion, the update note to the Def is "moderate, concrete and cautious", but in the event that the economy goes badly, the government will take corrective measures.
THE TREASURE PASSES THE AUCTIONS TEST: BUT THE THREE-YEAR SUFFERS
During the field day of the auctions, the Treasury managed to place the entire amount offered (moreover reduced than usual) but with sharply rising yields. The spread remains well above 300 points: ten-year at 3,55% against the Bund at 0,51%.
6,5 billion BTPs were absorbed by the market, including the new 3-year, the maximum of a rather limited overall offer, between 5 and 6,5 billion. Yields hit their highest since 2013 or 2014.
In particular, the new three-year October 2021 coupon of 2,30% was placed for 3,5 billion at a yield of 2,51%, up from the 1,20% of the auction a month ago, when the offer was it was the old benchmark April 2021 coupon 0,05%; the yield marks a maximum since September 2013. The bid-to-cover stopped at 1,26, the lowest since 2013 from the previous 1,67.
The performance of the securities placed remained in line with market fluctuations in the afternoon. On the gray market around the closing date, the three-year placed in the morning yielded 2,54%; the 7-year 3,36% (against an auction rate of 3,28%) and the 15-year September 2033 3,65% (against 3,66%).
ONLY STM CLOSES WITH A PLUS SIGN
In Piazza Affari, only one stock closed the day with a plus sign: Stm +1,98%, rebounded from the lows of the previous day thanks also to its confirmation in the Premium List of Société Générale.
BANKS IN RED, CARIGE FALLS
Final sharp drop for banking, but the sector index (-1,77%) is still better than the European Stoxx (-2,25%). The declarations of Deputy Prime Minister Luigi Di Maio certainly did not help, who confirmed in an interview with him that the banks will have to contribute through minor tax breaks to cover the financial package.
The big names are heavy: Unicredit -1,8%, Intesa -2,5%. Banco de Santander restarted coverage yesterday with buy and hold ratings respectively.
Mediobanca -1,27%. Carlo Pesenti yesterday said he was "not interested" in participating in a new "light" consultation agreement between Mediobanca shareholders (-1,27%). The Lucchini family is instead ready to join, confirmed Giuseppe Lucchini.
Carige's fall continues: -6,12% in closing after touching -10%, in the wake of Fitch's statements, according to which bank failure is a "real possibility".
IN FALL LUXURY AND MANAGED. EXOR SUFFERS
Asset management companies suffer: Azimut -3,6%, Banca Mediolanum -2,4%, Anima -8%.
Luxury still down: Moncler -1,4%, Ferragamo -3,3%. The Fiat Chrysler galaxy was bad (-0,68%), with Ferrari at -2,23% and Exor at -3,39%.
Leonardo down at -2,65%. Di Maio said that the government intends to cancel 500 million expenditures on armaments, considered useless, with the Budget law.
ASTALDI INTO THE ABYSS, LEAP OF BIALETTI
Astaldi's descent into hell continues (-19,39%), despite the denial on the differences in the board of directors.
Of note among the minor shares is Bialetti (+16,37%), in the wake of the announcement of an agreement with Och-Ziff Capital Investments which will come to control 25% of the company with a total investment of 40 million euros.
