Warren Buffett and Larry Fink, BlackRock's number one, took the field against Donald Trump's tax reform, calling it an "unjustified gift" to corporations. But Wall Street, supported by the good news from the economy, rejoices: prices may seem tight but the next quarterly campaign could support the rally. In the meantime, the strength of US price lists is dragging all markets upwards, including the Eurozone, held back by the increasingly serious crisis of Spanish democracy.
JAPAN DISPLAY +29%: LOW COST SCREENS ON THE LEAD
This morning the Bull is also galloping on the Asian markets. Hong Kong hits a new high since 2015 supported by Chinese bank securities (+1,9%), rallying after the decision taken on Saturday by the Beijing authorities to lighten the compulsory reserves of institutions. Chinese price lists are closed for holidays all week. Also stop Seoul. Japan Display (+0,2%) flies to Tokyo (+29%): the company has developed a new technology to produce organic diodes (OLEDs) for TV and smartphone screens at low cost.
On the day of the Bank of India's monetary policy announcement, the Mumbai Stock Exchange rose by 0,2%.
RECORD POKER ON USA LISTS
New poker record for Wall Street. The Dow Jones (+0,37%), S&P 500 (+0,22%) and Nasdaq (+0,23%) closed on new all-time highs. Absolute supremacy also for the Russell 2000, the PMI index, the most sensitive to the signals of Trumpeconomics.
The dollar rally lost momentum: the exchange rate with the euro dropped to 1,174 from 1,173 at the close; during the night the descent continued, this morning the euro traded at 1,176 against the dollar. Gold rebounds, falling yesterday to the lows of the last six weeks. Bond yields down: Treasury Bill to 2,32% from 2,33%.
HIGHLIGHTS CARS AND AIRLINES
The car stocks were in evidence, supported by the purchases of cars damaged by the recent hurricanes. GM gains 3,1%, Ford +2,1%. Airlines shares take off after the sharp increase in profitability reported by sector indices. Delta Airlines (+6,6%) was the best performer, followed by United Airlines (+6,1%). Oil prices are slowing down: Brent trades at 55,62, WTI falls back to 50 dollars. Good for oil companies in Piazza Affari: Eni +0,6%. Saipem +1,7%.
KING FELIPE ATTACKS: "IRRESPONSIBLE" REFERENDUM
The European price lists moved little, orphaned yesterday by Frankfurt, closed for the celebration of reunification. In Piazza Affari, the Ftse Mib index (-0,12%) stops at 22.784 points after setting the fifth consecutive record during the day. "The conditions are in place for a further strengthening of Italian growth as early as the third quarter", according to Economy Minister Pier Carlo Padoan, who expects growth of 1,5% in both 2017 and 2018. They have done better Paris (+0,32%) and London (+0,39%).
Yesterday evening, speaking on Spanish TV, King Felipe VI called the organizers of the Catalan referendum "irresponsible", accusing them of wanting to put both Catalonia (paralyzed by the general strike in protest) and the rest of the country at risk. The Generalitat is ready to declare independence within the week. The Madrid Stock Exchange closed at +0,02%.
THE SPREAD BETWEEN ITALY AND SPAIN IS NARROWING
The BTPs closed weak but without particular downward pressure, even with a spread that goes back to 176 points from the lows of the morning. The Italian 2,22-year bond stood at 2%. The Spain-Germany spread widened by 126 points to 2 points, confirming its highest level since the beginning of the summer; the Italy-Spain spread narrows by 52 points to 2017. The Treasury keeps primary activity alive with a new government bond swap operation, the fourth in 2: the offer is up to 2026 billion euros on the BTP November 7,25, coupon 2018%, against the withdrawal of five between Btp and Ccteu with short-term maturities, between 2019 and XNUMX.
Still on the primary market, today an auction of German 3-year bonds is on the agenda, with an indicative offer of 13,75 billion, which precedes the medium-long term auctions on Thursday in Spain and France, whose overall offer, including indexed bonds, reaches up to XNUMX billion euros.
PIRELI RETURNS TO THE STOCK EXCHANGE. EQUITA COMES TO AIM
This morning Piazza Affari celebrates Pirelli's return to the list after two years. The placement of the stock took place at 6,5 euros per share, at the low end of the range. The threshold necessary to trigger the incentive envisaged for the vice president Marco Tronchetti Provera was therefore not reached. No new shareholder has stakes equal to or greater than 3%. Most of the institutional placement (337 million shares out of 365 million) was divided among 165 institutional investors abroad: the largest packages went to Pictet, York Capital, Marshall Wallace and Aviva Investors. The patrol of 40 Italian operators, led by Azimut and Kairos Partners, raised a total of almost 28 million shares (less than 3% of the capital). Among these, the participation of Banca di Italia also appears, which appears to have invested around fifteen million.
Yesterday, the arrival of a luxury freshman was announced. Equita, the financial consultancy firm, intermediation for institutional clients and investment bank founded by Francesco Perilli warms up the engines to land in Piazza Affari, on the Aim market. Mediobanca will lead the intermediary most followed by international operators entering the Italian market onto the Stock Exchange.
BANKS, ECB TIGHTENS ON NPLs, ZONIN INVESTIGATED
Downturn day for the banks in Piazza Affari. Unicredit sells 1%, Intesa 0,33%. The popular ones are weak: Ubi Banca slows down (-1%), after the 4% leap on Monday, on the wave of the promotion of Société Générale. Bper Banca -0,7%, Banco Bpm +0,5%.
The prosecutor's office of Vicenza has requested the indictment of Giovanni Zonin, former president of Banca Popolare di Vicenza, and six other former managers of the institute for the alleged crimes, for various reasons, of insider trading, obstruction of the supervisory authority and forgery in prospectus. The rules on non-performing loans are set to change. The ECB will ask banks to further strengthen coverage on new non-performing loans to 100% after 2 years if the loans are unsecured and after 7 years if guaranteed. These indications are contained in a draft of the European Central Bank.
LUXURY: YNAP AND MONCLER GOOD, TOD'S AND FERRAGAMO DOWN
The most evident movements on the Milanese price list are dictated by changes in the opinion of brokers, particularly in the luxury sector. Salvatore Ferragamo dropped 3,3% with above-average volumes, after Exane Bnp Paribas cut its rating to 'neutral' from 'outperform' and the target price to 24,0 from 24,3 euros. Analyzing the recent success stories in the luxury goods sector, says the broker, turnover at the top "seems like a necessary condition (...) but not sufficient" to give value to shareholders: it also takes having the right plan and speed and hardness in 'execution.
Tod's was negative, it lost 2,2% with high trading, penalized by the caution expressed by Kepler Cheuvreux who cut the rating to 'reduce' from 'hold' and the target price to 54 from 58 euros. Conversely, Ynap achieved an increase of 1,43% in the wake of the substantial improvement in the target price (to 40 from 33 euros) by Jefferies. Moncler is also advancing (+1,3%) which for Goldman Sachs remains Buy, target adjusted to 25,90 euros (from 25,60). since the beginning of the year, with a 47% increase, it is one of the best blue chips in Piazza Affari.
DOWN THE UTILITIES. BERNSTEIN GIVES GENISH THREE TIPS
In the main price list, the advance of Atlantia (+1,7%) should be noted. The Spanish economy minister, Luis De Guindos, stated that the Madrid government has no intention of taking the field on Abertis.
Utilities are bad: the European sector index loses 0,8%: Enel -1,3%, Snam - 0,3%, Terna - 0,9%.
Fiat Chrysler was also down (-0,3%) after registrations in September in Italy (+5,19% against a market increase of 8,1%). Sales in the USA are down but less than expected -10%. The decline remains concentrated in corporate fleets while retail sales increased by 0,3%.
Weak Telecom Italia (-0,26%). Bernstein confirmed the market-perform recommendation and the target price at 0,9 euros. The business house wrote an open letter to the new Amos Genish, giving three pieces of advice: to sort out relations with the Italian government and regulators while maintaining control of the fixed network; stay focused on home connectivity and convergence without owning content; leave all solutions open in Brazil, including a potential exit.
THE MILK PLANT +20% HEADS TO CHINA
Significant movements yesterday both at the Star and in the medium/small caps sector. The opening share belongs to Centrale del Latte d'Italia (+20%) at a price of 4,40 euros, a record level since 2014 amidst exceptional volumes: 1,55 million shares changed hands, the largest daily quantity since 2015. Such enthusiasm can be explained by the strategic partnership signed with Alibaba, the Chinese company among the world's online commerce, for the marketing of long-life whole milk on a potential market of 460 million consumers.
Giglio also did well (+7%), which announced important commercial agreements with Amazon. Eurotech (+8%) and Isagro (+4,3%) also advanced after +13% on Monday. Maire +2%. Ansaldo Sts has awakened (+2,79%): Equita Sim has raised the recommendation of the stock to buy from hold, with the target price rising to 12,9 from 11,2 euros. Hitachi could point to delisting.
SETTLEMENT FOR LANDI RENZO AND REPLY
There was no shortage of abrupt setbacks, especially among the most speculated stocks. Landi Renzo collapsed (-15%) after a long streak of increases. Bad session also for Gefran (-17%), affected by profit taking. Reply thud (-9%). The parent company sold 7,7% of the share capital at 190 euros per share. After the flash sale, he remains with 47%. Banca Akros (accumulated, target price 1,83) believes that the current price represents "an interesting entry point".
