It is a historic moment for the bond market. The United States 10-Year Treasury Note trades at 3.74%, +5 basis points. The United States 2-Year yield, at 4.25%, has been rising continuously for twelve days, the longest sequence since 1976.
The Yield curve is increasingly inverted. The two-year/thirty-year differential falls from thirteen to -61 basis points. We are on a level never seen in history. The Italian Italy 10-Year BTP closed on Friday at 4.32%.
Italian Elections: Fratelli d’Italia is the first party with 26.46%, while Lega and Forza Italia recorded much lower percentages: 8.98% and 7.99%. The total of the coalition, therefore, reaches 44.35% and would guarantee a majority in Parliament but not two-thirds of the seats, as it seemed possible from the polls.
Giorgia Meloni will, therefore, probably be the next prime minister, the first woman and leader of the most right-wing formation in the government of republican Italy.
Germany: The German index measured by the Ifo institute, which indicates the sentiment of companies on the economic situation, fell more than expected in September due to the energy crisis.
The corporate sentiment index fell to 84.3 points (from the revised figure of 88.6 in August) against expectations for a more contained decline to 87.1 points.
This is the lowest value since May 2020. The current assessment index fell to 94.5 (from 97.5), and the business expectations index to 75.2 from 80.5.
Hot Stocks And Instruments
DAX: Negative news from the macro data, with the country in pole position as the first EU country to enter a recession. I expect the Dax at 12,000 points shortly.
Natural gas: The commercial premium deriving from the lack of Russian gas is now over. The market has already discounted it. Therefore, an enormous oversupply could arise in the next few years, with producers returning to the game after plant shutdowns due to the pandemic. I expect prices in the 6,000 area shortly.
Bitcoin: The European Central Bank is studying ways to settle transactions between banks on a blockchain to keep control of the money, as even lenders switch to distributed digital ledgers.
In actuality, this is not good news for Bitcoin, as they’re working on setting up a digital ledger based on using cryptographic tokens linked to a conventional currency. Bitcoin has not been named.
Moreover, the response project - the so-called digital Euro - positions itself precisely against Bitcoin. With these conditions, it makes sense to invest in Bitcoin only from a speculative point of view and not in the long term. On Bitcoin, I expect 15,000 shortly.
Telecom Italia: A positive day for Telecom Italia (BIT:TLIT), which rose by 1.1% in the 0.187 euro area, thus rising from the historic lows reached in the last week. The political affirmation of Fratelli d’Italia in yesterday's elections contributes to supporting the stock.
Giorgia Meloni's party would favor a plan to delist the company and sell the network to CDP to create a single national infrastructure. Stock to be purchased only for speculative purposes, The critical point is always the same, the company has insufficient levels of profitability and has very high debt.
According to my model, the stock is worth 0.16. Moreover, we must be cautious to promptly liquidate the stock before any delisting to avoid very long procedures to collect the equivalent value.