The good story that investors were telling each other regarding the end of central bank rate hikes is severely shaken by the latest statistics published, particularly in the United States. As the most favorable scenario lost a few probability points, the equity markets took a hit. With the drying up of publications of annual company results, macroeconomic indicators will take on even more weight in the days to come.
We start with a weekly review. It will not have escaped your notice that the financiers suffered last week, except of course those who made bets once morest the market. On the equity side, the indices all lost ground. The dunce cap goes to Chinese equities, with MSCI China widening 4.15%. The Nasdaq 100 has nothing to brag regarding either with a gadin of -3.1%. The shovels range from -2.5% to -3% for the US S&P500, Indian SENSEX or Dutch AEX. It is a bit better for the CAC40 (-2.2%), the FTSE 100 (-1.6%) and the IBEX (-1.4%). The Nikkei 225 fails a cable’s length from the promised land (-0.2%). OMX Copenhagen and OMX Oslo, by grabbing a few points, are the Nordic exceptions that prove the rule.
If January was the month of stock market renewal, February is rather that of the return of doubt. But not necessarily that of depression since the indices are not as far from balance as we think. Except in China perhaps, where the MSCI China already lost 9.2% in February, following jumping 11.8% in January. The Stoxx Europe 600 and the Nasdaq 100, for example, are only down 1% over the current month, following gains of 6.7% and 10.6% respectively in January. The broad US S&P500 index shows a liability of -2.6% following gaining 6.2% in January. There are two sessions left, including today, to take stock of February.
What upsets investors is the current series of indicators that are no longer pointing so clearly towards a decline in prices. Or more in the direction of a fall in prices as frankly as expected, which is not quite the same thing but which amounts to fairly similar consequences: the good confidence displayed a few weeks ago has crumbled . This is visible on US bond yields. At this point, no one really knows if this is a sign that rates will stay high for much longer. Or if it’s a double jeopardy looming: higher rates and higher for longer. It is this scenario that would be the most unfavorable for the equity markets, especially if it is accompanied by the recession that everyone is talking regarding but that we still don’t really see. The market will pile up the next statistics either on the heap “ah well finally, more fear than harm”, or on the heap “it seems to be deteriorating once more”.
We move on to the overview of the beginning of the week. What is happening in the political-economic-conflictuo-financial field?
- German Chancellor Olaf Scholz has been in India for two days since Saturday to push the German and European pawns on trade, despite differing views on the conflict in Ukraine.
- Rome is seeking to ally itself with Berlin and Paris to weigh once morest European laws on CO2 emissions from automobiles. The three countries are those whose industry is most exposed to the automobile on the old continent.
- Ursula Von der Leyen is in London today to discuss Northern Ireland protocol and try to put an end to the endless debates over the Brexit deal.
- The Saudi Foreign Minister is in kyiv, which seems to have significant symbolic significance in the context of the Russian-Ukrainian conflict.
- Barcelona is back with the MWC show, the annual mobile high mass, starting this Monday.
- To wish good luck to François, the song from the beginning of the week can be listened to in the room of the tobacco bar on rue des Martyrs.
- We end with a statement by Warren Buffett, one of the grandfathers of finance on the sidelines of the publication of the annual results of his Berkshire Hathaway holding company. “I have never yet seen a time when it made sense to make a long-term bet once morest America,” he said to show his confidence in the economy. To meditate.
This week, the corporate results agenda is less extensive. However, there are still a few big names like Occidental Petroleum, Target, Monster Beverage, Bayer, Salesforce, Reckitt, Broadcom, Costco, Merck KGaA, the London Stock Exchange or Anheuser-Busch Inbev. On the macro side, several highlights this week. First, US durable goods orders (Monday, 2:30 p.m.), then the Conference Board’s US consumer confidence index (Tuesday, 4:00 p.m.). The final ISM manufacturing indexes for February will occupy the day on Wednesday. The first estimate of euro zone inflation in February will take over (Thursday, 11:00 am). The week will end with the final February PMI indices for services and the American counterpart, the services ISM (Friday, 4:00 p.m.).
In Asia, the markets are starting the week on a fairly negative note. Only the Japanese Nikkei 225 manages to really limit the breakage to -0.11%. Australia lost -1.1% and South Korea -0.9%. In China, Hong Kong returns 0.6% and Shanghai some 0.4%. The Indian market also lost a few feathers (-0.5%), even if the session is still far from over. The European leading indicators, however, seem positioned to attempt a rise, following the severe slap suffered on Friday, but the trends are fragile. The CAC40 starts on a rebound finally marked, from 0.8% to 7243 points.
Economic highlights of the day
In the United States, orders for durable goods (2:30 p.m.) will precede sales in old real estate (4:00 p.m.). The whole agenda here.
The euro remains under pressure at 1.0541 USD. The ounce of gold fell in parallel with the strengthening of the dollar, to 1808 USD. Oil is stabilizing, with North Sea Brent at $82.48 a barrel and US WTI light crude at $76.11. The performance of the american debt over 10 years rises to 3.94%. Bitcoin retreats not far from USD 23,500.
The main changes in recommendations
- Accor: Jefferies remains underperforming with a price target raised from 21 to 24 EUR.
- Amadeus: Jefferies remains long with a price target raised from 61 to 67 EUR.
- BASF: Bankhaus Metzler goes from buying to selling targeting EUR 41.
- British American Tobacco: Jefferies remains long with a reduced target price of 4700 to 4100 GBp.
- Cellnex: Berenberg remains to be kept with a target price reduced from 79 to 39 EUR.
- Credito Emiliano: Jefferies remains to be kept with a price target raised from 7.60 to 8.90 EUR.
- Danone: Jefferies remains on the buy side with a price target raised from 56 to 62 EUR.
- Deutsche Post: HSBC goes from buying to keeping, targeting EUR 43.
- DSV: HSBC goes from keeping to reducing, aiming for 1100 DKK.
- Dufry: Barclays starts tracking to overweight by targeting CHF 50.
- Flatexdegiro: Citigroup starts tracking at neutral.
- HeidelbergCement: Bankhaus Metzler goes from buying to holding, targeting EUR 70.
- Hemnet: Jefferies remains to be kept with a price target raised from 140 to 150 SEK.
- Hikma: Berenberg remains to be kept with a price target raised from 1440 to 1740 GBp.
- Kuehne + Nagel: HSBC goes from keeping to reducing, aiming for 210 CHF.
- Mediaset Espana: Oddo BHF goes from outperformance to neutral, targeting EUR 4.20.
- Mercedes: Berenberg is still buying with a price target raised from 80 to 88 EUR.
- Michelin: Goldman Sachs goes from neutral to buy, aiming for EUR 35.
- Mondi: Jefferies remains long with a reduced target price of 1730 to 1710 GBp.
- Rieter: UPS remains neutral with a price target raised from 96.75 to 104 CHF.
- Rightmove: HSBC goes from reducing to retaining, aiming for 530 GBp.
- Shell: Goldman Sachs goes from neutral to buy.
- Viaplay: Jefferies remains to be kept with a price target raised from 235 to 250 SEK.
In France
Important (and less important) announcements
- Thales will recruit 12,000 people due to the explosion of orders.
- Metabolic Explorer has finalized its refinancing operations which should allow it to deploy its 2023/2024 projects. The group has mandated an intermediary to find an additional €30 million from 2025.
- Biophytis is starting the regulatory process for requesting early access authorization in France from the HAS for the treatment with Sarconeos of severe forms of COVID-19.
- Enertime signs an electricity sales contract with Verallia for its Lagnieu site.
- Pharnext shareholders approve the change in legal and financial framework.
- They also published / they are on the agenda: Dekuple, Metavisio, com…
In the world
Company results (comments are given on the spot and do not prejudge the evolution of securities)
- Berkshire Hathaway: quarterly net profit of $6.7 billion is lower than expected.
- PostNL: forecasts 2023 results far from expectations.
- SES SA: the Luxembourger forecasts for 2023 a turnover of €1.95 to €2 billion and an EBITDA of €1.01 to €1.05 billion.
Important (and less important) announcements
- Pfizer is in talks to buy Seagen for possibly more than $30 billion, according to the WSJ.
- Apple would replace Lumentum with Sony for iPhone components.
- Pioneer Natural Resources has its sights set on Range Resources, according to Bloomberg.
- Cvent Holding reportedly rejected an $8 per share offer from Blackstone.
- Getinge under pressure following the prospect of the CE marking of two medical kits being suspended, for problems already known but apparently misaddressed.
- Ford on Friday extended by at least a week the suspension of the manufacture of its popular F-150 Lightning electric “pick-up”, decided following a battery fire in early February.
- Telecom Italia asks KKR to raise its offer for its fixed network.
- Ericsson will cut 8,500 jobs worldwide.
- Anima Holding completes the acquisition of 80% of Castello SGR.
- The “disappeared” boss of China Renaissance is cooperating with an investigation by the authorities, according to Beijing.
- The president of Stabilus sees room for maneuver for acquisitions of up to €700 million.
- The main publications of the day: Occidental Petroleum, Zoom Video, Bunzl, Acciona, SES SA, Saipem, Fluidra, PostNL… The whole agenda here.
Lectures
