YELLEN PUSHES ASIA, TODAY IT'S THE ECB'S TURN
FIAT TRYING TO START AGAIN AFTER THE CRASH
The word to the governors. Yesterday Janet Yellen, before the US Congress reiterated that the labor market is "still far from satisfactory", consequently the central bank will guarantee a "high level of monetary expansion". Few news, except for a mention of the real estate market, in a moment of slack, and the reference to international tensions: the time for a rate hike is still far away. Today it's Mario Draghi's turn. The most reliable forecast is that the ECB directorate, for now, will not intervene on rates, postponing any decision on expansive moves to the June meeting. But the market anxiously awaits Draghi's words to understand if and how the central bank intends to react to the drop in prices and, above all, to exchange rate tensions.
In the meantime, the race for sovereign debt continues on the markets, favored by low interest rates. Yesterday the 2,984-year BTP hit a new low since the introduction of the euro with a yield of 154%. The BTP/Bund spread is 4,2 basis points. After all, Berlin bonds are also at the center of a strong recovery in purchases: 5 billion 0,50-year bonds were placed at 0,97% (against XNUMX% previously).
At the May 12 auction, the Treasury will offer 6,5 billion 12-month BOTs against 7 maturing.
ASIAN STOCK EXCHANGES TO THE RESCUE, NASDAQ SUFFERS
The mixture between Janet Yellen's words and positive data on the Chinese trade balance it provoked a strong upward reaction on the Asian stock markets, protagonists of the best session of the last month. Tokyo rose +1,3% ahead of Shanghai +1,11% and Hog Kong +0,84%.
Wall Street also closed yesterday evening with a recovery: Dow Jones up 0,72%, the S&P 500 up 0,5% while the Nasdaq, conditioned by the landslide of Internet stocks, contained the decline to 0,32%.
The thud of the day is about Aol -20%. Groupon also collapses -18% after announcing that the results of the current quarter will be lower than market expectations. Amazon drops by 2,4%, Facebook -2,6%, Linkedin -3,6%, Twitter drops by 2,2%.
PIAZZA AFFARI, THE BEAR TRAVELS ON A FIAT
While awaiting the ECB, the European markets noted with satisfaction the announcement of the withdrawal of Russian troops from the borders of Ukraine.
Thus, the stock exchanges of Paris +0,4% and Frankfurt +0,5% closed in positive territory, London fell by 0,1%, Madrid -0,6%.
Milan achieves the worst performance in Europe; -1,31%.
The feeling is that international investors have taken the disappointment of the Fiat accounts as an excuse to bring home the good earnings achieved so far by investing in Piazza Affari, by far the best western stock exchange since the beginning of 2014.
After the presentation of the FCA industrial plan, the Fiat share closed at 7,48 euros -11,6%, a landslide that can be explained by the disappointing quarterly data. Operating profit (trading profit) was 622 million euro, against the 854 million expected on average by analysts. Analysts reacted as follows: Mediobanca cut the recommendation to Neutral from Outperform, leaving the target price unchanged at 9 euros. Equita raised its target by 8% to 9,5 euros and confirmed the Buy, but cut the weight in the portfolio by 150 basis points. Deutsche Bank and SocGen confirmed the Sell judgment with target prices of 7 and 5,5 euros respectively.
Elsewhere in the Agnelli Exor stable, the controlling holding company, lost 1,9%. CNH Industrial climbed 0,9%
CONTI OK FOR PIRELLI. FINMECCANICA BEAT
The indications coming from the rest of the industry are contrasting.
Better data than expected for Pirelli, yesterday almost unchanged -0,1% awaiting the quarterly results announced after the markets are closed. The group archives the first quarter with a net profit up 26,1% to 90,4 million euros (better than Intermonte's forecasts) and confirms the objectives for the whole of 2014 announced in March which foresee a turnover of 6,2, 9 billion with organic growth of more than +10%/+850% and an EBIT of 8 million. Consolidated revenues for the first three months recorded organic growth of 1,47% to 10,7 billion but due to the impact of exchange rates (negative by 2,7%) they decreased by XNUMX%.
Sharp decline instead for Finmeccanica -7,49%, which released its quarterly accounts on Tuesday. Ansaldo Sts also closed the loss -1,71%.
Today Mattei Renzi will participate in the conference in Genoa to announce the entry of the Chinese Shanghai Electric into the capital of Ansaldo Energia, taken over in the autumn by the Strategic Fund of the CDP.
StM is 0,9% behind
It went down Brembo -5%. Indesit closes down 2,91% after statements by Aristide Merloni who said that all options are open, whether to go with a partner or stay alone.
Tenaris +1,70%. The market reacted to Goldman Sachs' increase of the target price from 14,4 to 15 euros (sell recommendation). After quarterly accounts, Goldman Sachs raised its EPS estimates by 3% this year and next and by 4% in 2016.
POPULAR INCREASES UNDER PRESSURE
Despite the positive trend of government bonds, the banking sector is in fibrillation waiting for the ECB.
Thus Unicredit -1,6%, Intesa -4,1%, MontePaschi -6,3% closed down.
Pop.Emilia fell by 3,9% after announcing the capital increase of 750 million euros.
It's worse at the other Popolari: Banca Pop. Milan lost 5,3%, Banco Popolare -5,6%.
ENEL SALE WAITING FOR THE QUARTERLY REPORT
Utilities are down: A2A lost 2,8%, Atlantia -1,9%.
Eni gained 0,7%. The Italian oil giant signed today in Budapest with the MOL group, a Hungarian oil & gas company, an agreement for the sale of its 32,445% stake in Ceska Rafinerska and its subsidiaries Eni Ceska Republika, Eni Slovensko and Eni Romania.
The subsidiary Saipem scores -0,2%. Enel +0,8% on the eve of today's board meeting. The consensus of analysts expects a net profit in a range of 760-800 million, with a decrease in the order of 6-10% compared to the first three months of 2013 when profit stood at 852 million. According to the consensus, EBITDA should drop by 5% to 3,83-3,9 billion from 4,077 billion and EBIT to 2,3-2,4 billion from 2,55 billion. As for debt, it is seen at 41,4-41,5 billion, slightly up from 39,86 billion at the end of 2013, but down by 4-5% on an annual basis.
Salt in the meantime Enel Green Power +1%, which reversed course after the publication of the accounts. The company announced that the first quarter of 2014 closed with total revenues of 720 million euros, up 2,6% compared to the first quarter of 2013.
Snam Rete Gas +0,5%, awarded by Exane.
