Wall Street yesterday celebrated a sad anniversary: 33 years ago, on what went down in history as "Black Monday", the Dow Jones Industrial Average lost 22,6% in a single session, equivalent to a drop of around 6.500 basis points of the index on Friday's values. The shadow of that meltdown was felt at least for a moment last night on Wall Street, descending into deep red. But the spokesman for Nancy Pelosi, the speaker of the House, who was engaged in negotiations with the White House on the new round of economic stimuli, thought about saving the Bull. “The president and Secretary of State Steven Mnuchin spoke today for about 53 minutes – reads her in a tweet – In this phone call, they continued to reduce their differences. The President has instructed committee chairs to try to reconcile differences with their Republican counterparts on key areas.
The intervention made it possible to reduce the losses of the most important indices: Dow Jones -1,44%, S&P 500 -1,63%, Nasdaq -1,65%. In the red both IBM (-1% after the accounts) and Conoco Philips (-3,2%), which bought Concho Resources, the shale oil giant, for 9,7 billion dollars.
TRUMP RECOVERS AND GIVES AN IDIOT TO JAWS
Wall Street's nervousness, however, has political motivations. In polls, Donald Trump is showing recovery in key states, those decisive for the White House. Thus the risk of a mixed vote outcome returns, with aftermath to follow. Trump feels the revenge and attacks Anthony Fauci head on: people, he said yesterday, "are tired of listening to scientists, of having to follow the indications coming from Fauci and these idiots", who every day television “to detonate bombs”.
Trump is catching up, but last night's Supreme Court decision on mail-in voting isn't helping him: Judges rejected a request by Republicans to block a three-day extension of mail-in voting in Pennsylvania, a crucial state.
TOKYO CLOSES IN RED, SK HINIX SHOPPING WITH INTEL
American uncertainties affected the Asian session. This morning in Asia Pacific Tokyo's Nikkei -0,4%, Hong Kong's Hang Seng -0,1%, Shanghai and Shenzen's CSI 300 +0,2%, Seoul's Kospi -0,2%, BSE Sensex Mumbai +0,3%.
Of note is the purchase by the Korean SK Hinix of the Intel unit that produces Nand-type chips for 9 billion dollars.
Brent oil down for the fourth day to 42,3 dollars a barrel, -0,8%. The meeting of the ministers of the OPEC member countries ended with confirmation of the solidity of the relationship between Saudi Arabia and Russia: from the first came the request to anticipate in practice a probable worsening of market conditions caused by the second wave of the pandemic in many parts of the planet.
PURCHASES IN THE EURO SLOW DOWN
Euro-dollar at 1,177, little moved. In recent days, also due to the increase in infections, many investors have reduced their bullish leveraged positions on the single currency: in the first two weeks of the month, 20.870 positions were closed, a figure not seen since February.
EUROPEAN MARKETS WITHOUT ENAMEL, EQUAL BUSINESS PLACE
Yesterday the European stock markets progressively lost the boost ensured at the beginning by the positive data of the Chinese economy and by the expectation of a bipartisan agreement on stimuli for the US economy. Christine Lagarde distributed her daily dose of confidence with an interview with Le Monde: “Europe – he said – must immediately distribute its 750 billion euros of funds to support the economy affected by the pandemic and should create a permanent fiscal instrument for the blockade”. But words, in the face of the advancing contagion and in the absence of decisions, have little power. And so the Bull went limp.
GDP GROWTH AT RISK IN THE FOURTH QUARTER
Piazza Affari is almost flat (-0,08%), as is Madrid. The sharp increase in GDP (+12% in the third quarter) is likely to be short-lived. “The upsurge of infections, added to a drop in orders, does not bode well for the fourth quarter,” said Confindustria number one, Carlo Bonomi. And the first data, from electricity consumption to road traffic, confirm this feeling.
COTTARELLI: THE BUDGET LAW IS ALREADY AT RISK
Carlo Cottarelli writes this morning: “There is the risk that the Budget Law, based on a 6% rebound in GDP for 2021, a rebound that seemed entirely plausible up until a couple of weeks ago, may already be obsolete today. Not only could the GDP grow less, but new interventions could be needed to support it”.
In the meantime, the ballet on the Mes continues. On Sunday, Prime Minister Conte said that the Mes, the European state-saving fund, "is not the panacea". Yesterday he changed course: "We'll talk about it again after the general states of the M5S". And he has opened up towards "a legislative pact", as the secretary of the Democratic Party Nicola Zingaretti has been asking for for some time.
PHILIPS EXPANDS AFTER ACCOUNTS, SAAB COLLAPSES (-11%)
Paris (-0,2%), Frankfurt (-0,4%) and London (-0,55%) did badly. The stock markets that are part of Euronext were closed in the morning due to computer system failures; they reopened around mid-session.
The performance of Philips in Amsterdam should be noted: +3% after the quarterly accounts. Swedish defense firm Saab fell 11,9% to the bottom of the STOXX 600 after reporting a decline in third-quarter profit and failing to confirm its previous financial outlook for the current year.
JULIUS BAER (+5,4%) SELLS 30% OF KAIROS TO THE MANAGERS
Julius Baer gained 5,4% after announcing improved profitability for the first time this year, thanks to increased client activity and lower costs. The group sold 30% of Kairos to Guido Brera, Rocco Bove and Massimo Trabattoni.
Zurich climbed 1,1%, with Credit Suisse and UBS advancing between 2,4% and 3,8%.
BTP AND BONOS HOLD BACK, SPREAD AT 130
The BTP ended a session in negative territory in which eurozone government bonds generally saw yields close to their lowest in months, with investors alert to any possible sign of further easing by the ECB by the end of the year.
According to Mizuho's Peter Chatwell, this is a consolidation movement after the recent rally, but the feared second wave of Covid-19 could have a major impact on the Spanish economy and perhaps on the Italian one, for which some imbalances return to the fore.
In closing, the spread on the Bund on the 10-year segment stood at 130 basis points from 124 on Friday. The ten-year rate is in the 0,67% area (against the previous 0,61%).
BUNDES -0,63%. READY TO ISSUE THE SURE
The 0,63-year Bund yield hit -10%, more than XNUMX basis points below the ECB's current deposit facility, suggesting that the market expects further monetary policy easing.
In the meantime, the issue of the first bond of the European Sure program – a dual tranche at 10 and 20 years – for which the EU Commission has commissioned a pool of banks could materialize as early as this week.
ATLANTIA AHEAD SLOWLY. THE COMPANY FOR AFTER BENETTON IS BORN
Yesterday was a day under the banner of Atlantia, which rose in Piazza Affari by 4,93% while awaiting an agreement for 88% of Aspi. The white smoke, at the end of a long series of meetings, hasn't arrived yet, but the finish line is approaching. Cdp resolved to present a preliminary offer to Atlantia to take over Aspi. The offer will be presented with the consortium partners Blackstone and Macquaire, through a new company which at a later stage can also be opened to other Italian partners starting from F2i. In this case, the three shareholders will decrease proportionally and for Cdp it is envisaged that it can be diluted up to 30-33% (from 40 which should be the initial share of the vehicle which will take over 88% of Aspi).
However, a couple of hours after the opening, Atlantia's board meeting was suspended and postponed to today, given that no formal offers were received from the Cassa board of directors. Therefore, for now the price should not have been indicated and there is no binding commitment (as Atlantia had requested instead). However, there is a clear path and the request to postpone the Atlantia shareholders' meeting of 30 October, the one that should decide on the block sale or demerger of Aspi from the parent company. Very clear management powers in the new company CDP, starting from the indication of the managing director.
The Benetton company also sold 49% of Telepass's capital on Friday evening to the global private equity manager Partners Group AG, on behalf of its own funds under management, for a consideration of 1,056 billion.
GAVIO IS CONFIRMED AS THE KING OF THE NORTH-WEST
Astm (+4%) was awarded the tenders for the concession of the A21 Turin-Piacenza, A5 Turin-Quincinetto, A4/A5 Ivrea-Santhià motorway sections and the Torinese ring road and A12 Sestri Levante-Livorno motorway sections , A11/A12 Viareggio-Lucca and A15 branch for La Spezia and A10 Savona-Ventimiglia.
TIM PUSHED BY THE OFFER ON OPEN FIBER
Slightly up Tim (+0,9%). The share was driven by the interest of the Enel board of directors (-0,77%) in the offer presented by Macquarie for 50% of Open Fiber, valued at around 7,5 billion, including debt, compared to the 7 billion of the September proposal. Société Générale raises its judgment to Buy, target price at 0,45 euro.
BPM BRAKS, BUT WAITING FOR THE AGRICULTURAL SOUL
Banco Bpm loses momentum (-2,11%). The deal with Crédit Agricole regarding the French bank's Italian operations could close in the spring of next year. The deal inflames Anima (+6,27%), which, Mediobanca Securities notes, is 19,4% controlled by Banco Bpm and 10,4% by Poste. Analysts see several potential options for managing the integration of asset management businesses across both banks, including the sale of Anima to Agricole-controlled Amundi.
Banca Generali +2,7%. Generali +1,2%: according to Ivass, the lower volatility and the decrease in the spread compared to the values in March, together with the recommendations on prudent policies for dividends, have allowed the recovery of the solvency ratios of the insurance companies.
MPS PREPARES A PROVISION FOR LEGAL RISKS
Worth mentioning is Mps (-2,06%): according to rumors, Conte would have signed the decree that will allow the institute to proceed with the spin-off operation of non-performing loans with Amco. After the sentence of conviction for Alessandro Profumo and Fabrizio Viola, the board is preparing a fund to cover legal risks.
Also worth following is Banca Profilo (+5,58%), to which various offers from Italian and foreign funds have arrived in recent days.
MONGOLIAN DEAL FOR TENARIS
The oil and oil service sector performed well: Tenaris (+2,12%) signed an agreement with Inner Mongolia Baotou to create a joint venture, of which it will hold 60%, for the construction of a pipe threading plant in Baotou . Saipem 2,74%, Eni + 0,35%.
THE SALVA FIERA MILANO DECREE, MAIRE ALLIES WITH CDP
Fiera Milano rally (+5,92%), in the wake of the new Dpcm, in force until 13 November, in which the possibility of holding trade fairs is confirmed, while conferences and congresses are suspended. Maire Tecnimont (+2,69%) signed a memorandum of understanding with CDP with the aim of promoting the growth and development plans of strategic suppliers through access to the financial products and services of the CDP group.
