“Let's say Americans stop going to restaurants or travel for tourism or business. In that case, 68% of GDP will go up in smoke”. The catastrophe is evoked by none other than the New York Times, in the face of the general panic that has swept the planet because, warned the World Health Organization, "no country should make the serious mistake of feeling safe from danger". The illusion of being able to limit the coronavirus risk to China (or Italy) alone has now vanished. And the bill for the markets is getting more and more salty: the loss from the highs exceeds 3.000 billion dollars.
The stock exchanges of Asia are once again in sharp decline today. Tokyo's Nikkei loses 4,1%, the drop from the highs for the period reached at the beginning of the year is almost 11%, we have therefore entered the correction area. On these prices, the benchmark index of the Japan Stock Exchange ends the week with a drop of more than 10%, to find something like this you have to go back to 2011. The Tokyo government, after announcing the closure of schools for a month, canceled the sumo tournaments and put the next Olympics on hold, is preparing to announce new measures to protect the economy.
The support measures did not protect the Chinese stock exchanges today: Shanghai is down by 3,1%, Hong Kong -2,7%. Singapore (-2,8%) and Sydney (-3,3%) also fell.
Overwhelmed last night Wall Street: Dow Jones -4,42%, ditto for the S&P 500. The Nasdaq falls by 4,61%. For the first time in history, the Dow lost more than 1.200 points in one session.
1,24-year treasury plunged XNUMX%
Goldman Sachs believes that, as a result of the damage caused by the epidemic, the earnings of S&P 500 companies will not increase compared to 2019.
Markets take for granted forthcoming rate action. “The Fed must ensure – writes Moody's – that liquidity reaches companies and households without interruptions”.
The expectation of a rate cut at the next Fed meeting (March 17-18) pushes the dollar down against the yen (108,9) and the euro (stable at 1,0993, but at a two-year high) .
Sixth day of decline for Brent oil, at 51,1 dollars a barrel, the lowest since the beginning of 2019.
In Piazza Affari, Saipem loses ground (-4,7%). Barclays cuts the target price to 5 euros, Goldman Sachs raises it to 6,80 euros. Tenaris is also bad (-4,36%). Eni (-2,54%) will announce the accounts today.
Gold fell 1.640% at $0,2 an ounce.
The Coronavirus, globally, has reached 83.048 confirmed cases. In China, with the increase on the last day (+327), the total rises to 78.800. South Korea has 2.022 people positive for the virus.
MILAN AT THE LOWEST SINCE NOVEMBER, BETTER THAN THE OTHERS
The performance of Piazza Affari since 3 January went into the red by 8% yesterday, but is still clearly better than the European average: Eurostoxx -XNUMX%.
The FtseMib index recorded an average P/E of 15,0x and an estimated average Dividend Yield which gradually rose to 4,3% (source Bloomberg) thanks to the announcement of higher dividends by some companies.
Prometeia has revised downwards the Italian GDP forecast for 2020 due to the impact of the coronavirus at -0,3% for both the first quarter and the full year.
THE 30-YEAR SWISS BOND “RETURNS” -0,50%
The other European lists are doing worse: Frankfurt collapses, with a drop of 3,19%, sales in full hands on London, which suffers a decrease of 3,49%, and a bad performance for Paris, which records a drop of 3,32 %. The most massive losses affect Madrid (-3,55%).
Zurich -2,92% on the day when Watches & Wonders in Geneva, one of the Swiss watch showcases, raises the white flag. But the appeal of the security guaranteed by the finance of the gnomes shines: the thirty-year Swiss government bond "yields" -0,50%.
RISK OF NO DEAL BETWEEN LONDON AND BRUSSELS
Meanwhile, there is a risk of a collision between the EU and the United Kingdom. Britain yesterday presented a negotiating mandate for talks with the European Union that puts it on a collision course with Brussels, saying it is ready to withdraw from the negotiations if "good progress" is not made by June. Britain has until the end of the year to negotiate a trade deal and a series of agreements in other areas, from fishing to transport, which will have to replace more than 40 years of close political and economic relations with the bloc.
The European Commission has said granting UK financial firms access to the EU market is not part of the talks due to start next week. London, Europe's leading financial centre, risks being excluded from its main export market for banking, insurance and asset management services from January 2021.
RACE TO THE BUND, THE SPREAD RISES TO 155 POINTS
Traders still seek refuge in bonds. The German bund trades at -0,55%, ever closer to the all-time low of -0,75%.
The ten-year BTP yields 1,08% (+8 basis points): after the auction of the new ten-year BTP, the bond was issued for 4 billion euro, with requests equal to 1,26 times the offer.
The Italy-Germany spread widens by 5 basis points to 155.
ONLY CNH AND TIM WITHSTAND THE FURY OF THE BEAR
The only blue chip from Piazza Affari able to close higher was Cnh (+1%).
Tim holds the fall to -0,25%, in a market that once again hopes for a quick go-ahead for the process to create the single network company, after the recent rumors and declarations. The intraday savings also did well, even if slightly exceeding the price of the ordinary ones; the market looks at the conversion hypothesis with a premium. Equita Sim confirmed the buy recommendation on the stock, with Tp of 0,64 euro per share.
STM, JUVENTUS AND AZIMUT THE WORST
The other companies in the main list are in red, in a climate of high volatility. The strongest sales went to Stm (-6,86%), always in symbiosis with Apple, on which about 17% of its turnover depends.
Closely followed by Juventus, -5,5% after the defeat in Lyon in the Champion League.
Azimut is in free fall, sinking by 5,20%.
ATLANTIA, ACCOUNTS IN TILT
Losses exceeding 4% also for Amplifon and Prysmian. Atlantia also falls by 4%, grappling with the preparation of a complicated balance sheet. Pure Nexi leaves 4% on the ground, despite HSBC having raised the target price to 16 euros.
UBI, A CATHOLIC IN THE FIELD AGAINST INTESA
Ubi Bank -4. Cattolica (-2%) announced that it had contributed its 1,01% of the bank's capital to the Car syndicate pact, which has already taken sides against Intesa Sanpaolo's Ops (-4%). The Veronese insurance company added in the press release that it had doubled its stake, previously equal to 0,5%.
MEDIASET COLLAPSES, EVEN PIAGGIO SWINGS
All mid-cap stocks closed below par. Mediaset collapses by 5,10%, but the strongest falls concern Banca Popolare di Sondrio (-5,99%). In apnea Ovs, which retreats by 4,91%.
Piaggio also lost ground, -3,8% after the sharp rises following the presentation of the accounts: Equita Sim confirmed the hold recommendation, with a target price of 2,7 euro, while Banca Akros raised its rating to accumulated from neutral, with Tp revised to 3 euros from 3,15 euros.
