Unfortunately it's not an April Fool's joke. Donald Trump warns Americans that "the next two weeks will be terrible" and that "before things get better they will get worse". In this climate, the markets await, without illusions, today's US data on weekly requests for unemployment benefits: according to Google Research, the number of requests will rise to 5 million, compared to 3,3 million seven days ago, already a record. But Grant Thornton's Diane Swonk ventures a shocking number: 9 million requests, a full million for California alone. In this context, the markets could register, after a nightmare day, a momentary relief of a technical nature, which must not fuel any illusions.
ASIAN STOCK MARKETS BOUNCE, SOS BOEING
Hong Kong's Hang Seng is on par this morning, the Shanghai Composite gains 0,3%, Seoul's Kospi 0,7%. Tokyo is starting to close modestly lower (-0,8%), while the yen, after six sessions on the rise, loses positions against the dollar to 107,5.
The Asian stock exchanges, which started down tonight in the wake of Wall Street, are recovering, driven by the futures on the opening of the US market, which dropped yesterday to a step from the 2.500 point level of the S&P500 index, the technical dam before new discounts.
The US markets closed in deep red: Dow Jones -4,44%, S&P500 and Nasdaq -4,41%. The future is up 1,5% this morning. It was the worst quarter start for Wall Street. Boeing leaves 12% on the field, in the face of upcoming job cuts for the giant.
Brent oil trades at 26,2 dollars a barrel, +5%, despite Saudi Arabia continuing to pursue its goal of reaching record production levels. Yesterday Trump returned to threaten Iran in a tweet, in which he refers to preparations for an attack on the US contingent present in Iraq by Tehran's allies.
CITIGROUP: A KIT FOR 90% OF AMERICANS BY MAY
In this tragic climate, the research objectives of the large financial structures are changing. There is no longer talk of profits or M&A: attention is focused on scientific research and, in particular, on times and ways of exiting the emergency. A team of Citigroup analysts made up of statistics, economics and medicine experts has tried to look ahead and formulate forecasts on the outcome of the epidemic: rather than a therapeutic solution, it will be better to look at a diagnostic solution. In a report cited by the Wall Street Journal, experts say that by the end of the month, thousands of kits will be available that can reveal whether a person has an adequate level of immunity to be able to return to work without risking contracting the disease. By mid-May, the blanket diagnosis should have reached around 90% of citizens of working age.
VON DER LEYEN PROPOSES A PACT ON WORK TO GERMANY
In Europe, meanwhile, efforts are being made to overcome the suicidal stalemate within the EU in view of next Tuesday's Eurogroup summit.
While awaiting the meeting, the plan is taking shape which provides for the European Commission to take the field directly with its 100 billion euro credit lineguaranteed by the European Union. The resources should be used to pay, country by country, unemployment benefits for those who lose their jobs. Reuters anticipates that the plan of President Ursula von den Leyen, who spoke about it yesterday with Giuseppe Conte, follows the scheme for part-time work of the German Kurzarbeit.
FRANCE: A FUND MANAGED BY BRUSSELS IS NEEDED
The terms of the negotiations on Eurobonds are changing, after yesterday the French finance minister warned that we must not get obsessed with this topic: the important thing is to find a system to help European economies hold up.
Paris, according to reports from Bloomberg, would have elaborated its own proposal, to be presented to the Eurogroup next week. It is a matter of setting up a new ad hoc fund, managed by the European Commission, authorized to issue bonds collectively guaranteed by all countries. The ESM fund, on the other hand, could start disbursing loans immediately, even more than 2% of the GDP of the country that requests them, thanks to a collective agreement.
IN THE FIELD THE EIB, THE NETHERLANDS GET SOFTENING
The European Investment Bank should intervene by placing its guarantee on another ad hoc fund of 25 billion euros, in order to give the new entity an eight times higher financing capacity, equal to 200 billion euros.
Holland, which until a few days ago was against everything, would have its own proposal, the creation of a fund with capital of 20 billion paid in by individual countries (1,2 billion would be borne by Holland) to mainly finance health expenditure, through the provision of guarantees and non-lending.
Germany has also come out with its own proposal for aid to Italy and Spain, to be fed with 200 billion euros from the ESM fund, 50 billion from the EIB and 100 billion euros from the new fund of the European Commission.
AND ITALY REMAINS CLOSED
Italy, meanwhile, remains closed. Giuseppe Conte signed last night the Dpcm which extends the coronavirus containment measures until 13 April. In last night's press conference he then clarified that the bans could be extended even beyond that date: "Only when the data consolidates and the experts allow us to do it, will we start planning a phase two, that of coexistence with the virus". Meanwhile, stock markets suffer.
ONLY CASH COUNTS. BUSINESS PLACE (-2,97%) IS THE LEAST WORST
From “cash is trash” to “cash is king”. In other words, as yesterday's session demonstrated, many operators are forced to sell (or sell off) to face the liquidity crisis which, after the discounts and in the absence of the collection of dividends, threatens to strangle the market. Hence the rain of achievements awaiting US data which today could provide reasons for further reductions.
Piazza Affari was (so to speak) the best stock exchange after losing "only" 2,97%. The other lists of the Old Continent are doing much worse: black session for Frankfurt (-3,94%) and London, which leaves a loss of 3,83% on the table. Paris is in free fall, sinking by 4,30%. In Europe, in the final session, the EuroStoxx 50 index lost 3,5%.
Istat has announced that in April it will not disclose data on the confidence of Italian consumers and businesses due to "operational difficulties" related to the emergency.
Yesterday, as expected, the statistics on manufacturing activity confirmed the deep crisis: in March the PMI index fell to 44,5 from 49,2. “But things are bound to get worse – adds Markit's chief economist, Chris Williamson – The March numbers reflect the resilience of distribution inventories, accumulated earlier”. In Italy, the index collapsed to 40,3 points, the worst figure since 2009.
THE SPREAD BEYOND 201, THEN THE BTPs RECOVER
Btp weak but above the lows of the morning. The spread returned close to 200 points after reaching 211 basis points. The 1,54-year rate is at 1,53%, from 20% at the last closing. Today will be the offers from France, with the 30 year old, and Spain, with the 7 year old. Portugal, which yesterday said it will increase emissions to deal with the emergency, has launched a new XNUMX-year bond through a syndicate.
ATLANTIA RUNS, BENETTON IN PARTIAL WITHDRAWAL
The recovery of Atlantia (+4,99%) was confirmed, in a market that is hoping for an intervention by Cassa Depositi e Prestiti and the F2i fund in the subsidiary Autostrade. The stock has more than halved since 20 February. Modest rebound for Autogrill (+0,7%).
EXOR FALLS, ONLY CNH IS SAVED IN THE STABLE
The black jersey of the day went to Exor (-7,47%): the risk of an extraordinary coupon less rich than already foreseen weighs heavily.
FCA -3,8%. Car registrations are collapsing in Italy: in March there were 28 thousand, 85,4% less than a year ago; -35,5% the decrease on a quarterly basis. Ferrari also down (-3,5%). Instead, Cnh Industrial rebounds (+2%) after the heavy losses of the previous days.
THUMP OF PIRELLI, THE ARRIVAL OF BREMBO IS NOT ENOUGH
Prysmian also bucked the trend (+1,8%), which completed the brand integration process following the acquisition of General Cable.
Black day for Pirelli (-6,34%), after Brembo's entry into the capital of Bicocca (-1,8%) with a share of 2,4%. “There is no plan to merge Pirelli with Brembo – Marco Tronchetti Provera said yesterday – They simply wanted to make an investment in us rather than in themselves. They trust us and we are happy about it." The market believed in the denial. Mediobanca Securities confirmed the neutral rating.
AMONG THE BANKS, IT ONLY HOLDS MEDIOBANCA
Sales day also for financials. Mediobanca holds (-0,48%). Keefe Bruyette & Woods, a US broker specializing in the financial sector, upgraded the rating from Market Perform to Outperform by setting a target price of 7,50 euros. Unicredit thud (-4%): KBW analysts assign the bank an outperform rating but lower the target to 11 euros from 16,6.
US analysts have cut estimates and target prices on other banking stocks. Intesa Sanpaolo (-3,8%) went from 2,4 to 1,8 euros, Ubi (-2,4%) from 3,3 to 2,6 euros, Banco Bpm (yesterday -2%) from 2,2 to 1,3 euros, Bper (-2,9%) from 4,7 to 3 euros.
SOUL RISES, UTILITIES ALSO RUNNING
In assets under management, a plus sign for Anima Holding (+1,55%): Equita Sim confirmed its Buy rating, reducing the target price by 11%, to 4,7 euro per share, a level which remains higher than stock market prices.
Utilities did not play the role of a safe haven this time. Snam shoulder strap (-7,33%), followed by Italgas (-5,6%) and Terna (-5,3%). The battleship Enel also falters (-5%).
ONLY CONFINVEST SHINES, THE GOLD REGISTER
Finally, in the midst of so much disaster, Confinvest shines (+2%), the Italian leader in the sale and purchase of physical investment gold. Integrae Sim has raised the recommendation on the stock to Buy from Hold, bringing the target price to 5,84 from 3,14 euros. The new price expresses, compared to the current quotations, a potential increase of 41%.
