2023-11-10 08:02:00
Finally, the head of the American central bank instilled doubt in the minds of investors regarding the consequences of American monetary policy. It’s fair game and no one really expected anything else. Despite everything, it is a halt to the ongoing bullish streak on Wall Street. The weekend is marked by some company results, a spectacular hack and a final statistic to follow.
The great form of Wall Street ended up contaminating Europe, which continued its rise yesterday, by being guilty of some sins of gluttony. +37% for Adyen for example, ex-future-former-new-star of the market. +8% for Schneider Electric. The two companies have in common that they presented their medium-term objectives yesterday. Lower reviews but wildly reassuring because they are more credible for Adyen. Well above what the market anticipated for Schneider. The taste for risk is back with its usual reverse leap towards quality. +44% for Orpea, +14% for Solutions 30. Everyone is looking for beta, leverage.
Well, that was before a little reminder from Jerome Powell. During an event organized yesterday, following the European close but during the session in the United States, the head of the Fed reminded investors that the work once morest inflation is not finished, despite appearances. The announcement made the financiers a little tense, even if they didn’t expect anything else (see here, my rantings from yesterday). The yield on 10-year US debt took the opportunity to increase by 10 points to 4.61%. Well, in reality, it had already started to rebound following a sluggish T-Bonds auction earlier in the day, which brought back the specter of the weight of the American debt. The 30-year paper passed painfully, requiring the setting of a rate higher than expected to attract the barge.
The stock markets suffered a bit, depriving Wall Street of a multi-decade record, since the S&P500 might have been in the green for nine consecutive sessions, a first since November 2004. But ultimately, in contrast with Europe, the United States lost -0.8% on the Nasdaq 100 and S&P 500 side and a little less for the Dow Jones (-0.6%). I still note that this single drop of the week was enough to bring the S&P500 back into negative territory on the weekly sequence, because the gains on Monday, Tuesday and Wednesday were meager. Friday will therefore be decisive for performance.
How to explain Powell’s exit? The Fed cannot completely let go of the financial markets, so tough talk is almost inevitable. Which does not mean that the central bank is necessarily ready to walk the talk. This is the whole point of the game that has taken place between investors and the Fed. ING economist James Knightley points out that this strategy makes sense, but has its limits. There will come a time, he explains, when rhetoric and macroeconomics diverge to such an extent that either markets will see the Fed’s bluff and begin to anticipate cuts, or the Fed will have to make an abrupt regarding-face and throw away the sponge. But we are not quite there and investors continue to get scared whenever Powell lectures them.
The bond market was also disrupted yesterday, beyond the difficulty for the US Treasury to sell its 30-year paper, by a major cyberattack targeting the leading Chinese bank ICBC (Industrial and Commercial Bank of China). The establishment was apparently the victim of the same attack as Boeing or Royal Mail recently, attributed to Lockbit. ICBC is both the largest bank in the world by the size of its balance sheet, and a key intermediary in the US Treasury bond market, of which the Chinese are large holders. The situation has apparently been brought under control, but it has caused some excitement because the target is important and the hackings of Chinese companies are rarely publicized. But in this case, it was impossible to hide the attack, given ICBC’s place on the global financial scene.
Friday is usually a quieter session when it comes to earnings releases, but it’s far from blank this week. Compagnie Financière Richemont in luxury, Allianz in insurance, Leonardo in defense and Honda in automobiles are there to remind us of this. On the macro agenda, the only line that interests investors today is that of the American consumer confidence indicator compiled by the University of Michigan, which will allow us to know whether the main pillar of the American economy is Always in shape. Furthermore, oil attempted a surge but the downward pressure is still strong on black gold: We were still eyeing the milestone of 100 USD per barrel of Brent a month and a half ago, while the stakes The question now is whether the 80 USD will hold.
In markets that have finished their week or are close to doing so, red largely dominates, but in generally contained proportions. Tokyo lost -0.2% and Sydney -0.5%. Seoul drops -0.7% and Bombay -0.2%. Hong Kong suffered and lost 1.5%, weighed down in particular by representatives of the electric vehicle industry. Leading indicators are looking down in Europe, given the closing gap between the old continent and Wall Street last night. The CAC40 lost 0.5% to 7077 points at the opening. The SMI fell by 0.2% to 10,623 points and the Bel20 fell to 3,447 points.
Today’s economic highlights
The University of Michigan Consumer Confidence Index will be in focus at 4 p.m. The whole agenda here.
The euro fell to 1.0671 USD. An ounce of gold trades at 1957 USD. Oil is recovering a little, with North Sea Brent at 80.46 USD per barrel and American light WTI crude at 76.08 USD. The performance of the American debt over 10 years rose to 4.61%. Bitcoin is trading around 36,730 USD.
The main changes in recommendations
Amplifon: HSBC maintains its buy recommendation with a price target reduced from 35 to 34 EUR. Antin Infrastructure Partners: Morgan Stanley moves from overweight to market weighting with a price target reduced from 21 EUR to 13 EUR. ArcelorMittal: AlphaValue /Baader Europe maintains its buy recommendation with a price target raised from 31.30 to 31.70 EUR.Coloplast: JP Morgan maintains its recommendation to underweight with a price target reduced from 686 DKK to 631 DKK.Deutsche Börse: Goldman Sachs maintains its neutral recommendation with a price target raised from 195 to 205 EUR.Eiffage: JP Morgan maintains its recommendation to overweight with a price target reduced from 117 to 113 EUR.Euronext: Goldman Sachs maintains its neutral recommendation with a target course reduced from 82 to 81 EUR. JP Morgan maintains its recommendation to overweight and reduces the price target from 103 to 101 EUR.Evonik Industries: Jefferies remains to be retained with a price target raised from 17 to 18.30 EUR.Flutter Entertainment: JMP Securities maintains its recommendation of market outperformance and reduced the price target from 18,500 to 16,500 GBX. Wells Fargo maintains its market weighting recommendation with a price target reduced from 16100 to 15100 GBX.Henkel: Goldman Sachs maintains its sell recommendation with a price target raised from 66 to 68 EUR.InPost: JP Morgan maintains its neutral recommendation with a price target raised from 10.90 to 12 EUR.JCDecaux: Barclays maintains its recommendation to overweight with a price target reduced from 25 to 24 EUR. Citigroup remains to be retained with a price target raised from 17.80 to 18.20 EUR.KBC Group: JP Morgan maintains its neutral recommendation with a price target reduced from 69 to 64 EUR. RBC Capital maintains its sector performance recommendation with a reduced price target from 72 to 65 EUR. Société Générale maintains its recommendation to hold and reduces the price target from 66 to 54.50 EUR. Mercedes: Morgan Stanley maintains its market weighting recommendation and reduces the price target from 73.50 to 70 EUR. Nexi: HSBC maintains its buy recommendation with a price target reduced from 10.50 to 8.50 EUR.Pirelli: Goldman Sachs maintains its neutral recommendation with a price target raised from 4.80 to 4.90 EUR.Rheinmetall: Deutsche Bank maintains its buy recommendation and raises the price target from 300 to 315 EUR. JP Morgan maintains its recommendation to overweight with a price target raised from 320 to 340 EUR.Salmar: Arctic Securities maintains its buy recommendation and raises the price target from 580 NOK to 630 NOK.SBM Offshore: HSBC maintains its recommendation purchase and raises the price target from 18.20 to 18.30 EUR.Schindler: Goldman Sachs maintains its neutral recommendation with a price target reduced from 219 CHF to 215 CHF.Schneider Electric: Deutsche Bank maintains its recommendation of purchase with a price target raised from 175 to 182 EUR.Thule: Jefferies remains to be kept with a price target reduced from 320 to 295 SEK.Tod’s: Citigroup remains to be kept with a price target reduced from 38 to 34.50 EUR. JP Morgan maintains its neutral recommendation with a price target reduced from 42 to 38 EUR. Trainline: Stifel maintains its buy recommendation and raises the price target from 355 GBX to 360 GBX. Vontobel: Citi goes from neutral to sell with a target price reduced from 51.50 CHF to 48 CHF.
In France
Company results (comments are given directly and do not prejudge the evolution of securities)
Aperam posts a sharp decline in Ebitda in Q3, but expects a rebound in Q4.Equasens publishes stable turnover in Q3.JCDecaux increases its turnover in the 3rd quarter despite weakness in China.Scor returns to profit in T3.
Important (and not so important) announcements
Renault Korea Motors will manufacture electric Polestar 4s (Volvo Car/Geely) for North America starting in 2025. The FDA has approved Valneva’s single-dose chikungunya vaccine, Ixchiq, first in class in this indication. The Société de la Tour Eiffel is launching the construction of its second multi-storey activity hotel in Bobigny. DBV publishes results deemed positive for the phase III extension study with Viaskin Peanut for young children. Lhyfe will supply several hydrogen stations the HYmpulsion company in Auvergne-Rhône-Alpes. The valuation of the assets acquired from CommScope by Vantiva results in a unit issue price for Vantiva shares of 0.65 EUR. Toosla closes its Madrid agency and appoints a new financial director. Vergnet is seeking new financing. Guillaume Labarrière will take charge of Agripower at the beginning of January.They have published / They must publish : Akwel, Mare Nostrum, Ramsay Générale de Santé, Vinpai, Innelec, Metabolic Explorer, ESI Group…
In the big world
Company results (comments are given directly and do not prejudge the evolution of securities, except for post-session exchanges in the United States, which normally reflect the trend well)
Allianz publishes higher profits than expected. Compagnie Financière Richemont disappoints with its results for the fiscal H1. Diageo sees the growth of its organic operating profit decline in H124 compared to H123. Geox forecasts lower sales in 2023, but higher margins.Leonardo posts an increase in net profit and orders and confirms its forecasts.Pirelli forecasts an operating profit at the high end of its forecast range despite the decline in the third quarter.
Important (and not so important) announcements
European justice confirms that Apple must pay a tax bill of 14.3 billion euros in Ireland. Novo Nordisk invests more than 42 billion Danish crowns (5.6 billion euros) in the expansion of its production facilities in Kalundborg, Denmark. Siemens Energy and Germany reach agreement in principle for guarantees. Fir Tree Partners would require Samhällsbyggnadsbolaget to repay bond debt, according to Bloomberg. UniCredit and Raiffeisen among banks most exposed to Signa’s €2.2 billion debt. Meta reaches deal to sell virtual reality headset in China , according to the WSJ.Tesla is establishing itself in South America, starting with Chile.Netflix and Warner Bros are teaming up with Verizon to offer a streaming offer at reduced prices, once more according to the WSJ.Vetropack is the subject of an antitrust investigation in Italy. The main publications of the day: Tokyo Electron, Honda Motor, Cellnex, DiaSorin, Scor… The whole agenda here.
Lectures
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#Fed #completely #sure..
