A lot of things happened this week in the stock markets, a lot of positive things even if we refer to the previous 15 days, in which the indices had fallen sharply. In the United States, for example, unless there is a cataclysm today, Wall Street should publish a perfectly correct weekly balance sheet. Something that is not so frequent this year, since I remind you that there has only been one week of rise in the benchmark S&P500 index in the last eleven. Tonight the ratio could go two for twelve as investors are slowly getting back into tech stocks finally getting out of oil a bit but also rushing back to health because they’re not completely cracked and they see we have to stay on the defensive.
I may be getting a little wet, but I feel like the main lesson of the week is that investors seem to be taking bad news better. Or at least now they have integrated the headwinds. This reduces the level of panic in reaction to the news. Be careful, this does not mean that there will not be other violent movements if events occur that are not or are poorly integrated into the risk matrices. All of this gives the impression that we have entered the classic phase of the market accepting bad news, which is an important step in building a solid foundation to return to more bullish stock markets.
Furthermore, the drop in bond yields seen in recent days in the United States is a manifestation of this. A section of the market has stopped thinking that the Fed is doing anything. This fringe is even betting that it might win its bet against inflation a little faster than expected. This would allow it not to hike key rates as much as investors feared a few days ago. He is versatile, an investor. Who says lower rates says a less punitive approach to economic dynamics and a little more liquidity than expected in the financial circuit. From there to thinking that everything will go back to the way it was before and that the party will resume for the owners of the assets, it remains a difficult step to take given the disorders that reign in the real economy. But let’s say that in the sinusoid of stock market morale in times of crisis, the penultimate week of June is rather at the high point of the curve.
The news this morning is dominated by geopolitics with the EU which has granted Ukraine and Moldova the official status of candidates for accession. At the same time, US banks passed the stress tests imposed by the Fed by margin. The so-called European systemic banks included in the stress tests of the US central bank also emerged without problems, either german bank, barclays, swiss credit, HSBC, UBS, Santander Bank et BNP Paribas. In Europe, the stress tests are scheduled for 2023. I remind you that this periodic work aims to estimate whether the main financial institutions have sufficient resources to withstand very difficult economic conditions.
On the business side, pending Q2 results due the week of July 11, I’m pointing out two important and related pieces of information this morning to understand some underlying dynamics at work. The famous online store zalando warned that its results will be far from the mark this year. This warning, which follows a whole series of others in the sector (Boohoo, Asos…) is due to both the increase in costs and the strong deterioration in demand, since the purchasing power of consumers is being reduced by inflation. It is the perfect storm for electronic commerce, especially when it is known that about half of the products delivered are returned by customers, by virtue of the facilities offered by this type of Internet store. Which allows me to make the connection to the second piece of information I wanted to share, which is FedEx’s rising earnings targets tonight. The US logistics company delivers less, but charges its customers more, increasing its margins. In such a context, the Zalandos and others find themselves caught between a rock and a hard place.
So much for the negative point of the day. In the stock markets as a whole, the mood continues to pick up. In Asia Pacific, Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng gained more than 1%. The Australian ASX and the Chinese CSI300 also ended the week in the green, in slightly lower proportions. Western leading indicators are running in the green and Europe, which lags behind the US for the week, will start quite sharply. The CAC40 gained 0.6% to 5,918 points at the open.
The highlights of the economic day
The Ifo business climate index for Germany will be published at 10:00 am In the United States, new real estate figures (2:30pm) and the Conference Board consumer confidence index (4:00pm) are on the agenda. All the macro agenda here. In Japan, inflation reached, as expected, 2.1% year-on-year in May.
The pair euro / dollar remains stable at 1,054 USD. L’once d’or fell to 1825 USD. The oil is more or less stable with a Brent from the North Sea at USD 110.08 per barrel and a light American crude WTI at $104.56. The performance of the american debt 10-year bonds fell further to 3.09% over 10 years. the bitcoin it is trading at $21,000.
The main changes in the recommendations.
- Air France-KLM : Deutsche Bank moves from selling to holding with a target of EUR 1.50.
- akzo nobel : Oddo BHF moves from outperformance to neutral, targeting EUR74.
- albiome : Kepler Cheuvreux advises to bring the offer.
- amundi : JPMorgan lowers its target price from 79 to 70 EUR.
- capita : Peel Hunt goes from hold to buy targeting 48 GBp.
- Covestro : Citigroup remains short with a reduced price target of EUR38 to EUR32.
- danish bank : Morgan Stanley goes from online weight to overweight by targeting 151 Danish kroner.
- Epiroc : Citigroup moves from buy to neutral, targeting 165 SEK.
- Genmab : BMO begins tracking market performance.
- Heineken : Deutsche Bank moves from hold to buy with a target of EUR106.
- LVMH : Citigroup lowers its target price from EUR 813 to EUR 707.
- Pernod Ricard : Societe Generale goes from hold to buy, targeting EUR 204.
- Siemens Healthineers : Bankhaus Metzler initiates a long follow-up targeting EUR68.
- swedish bank : Morgan Stanley moves from linear weight to underweight with SEK 157 target.
- Swiss Re : Goldman Sachs remains short with a reduced price target of CHF 90 to CHF 80.
- be energy : SEB starts tracking to continue targeting 40 NOK.
- vinci : Berenberg starts a long follow targeting EUR 105.
Important (and less important) announcements
- stellaris extends its collaboration with vulcan energy and become a shareholder.
- Sanofi et GSK announces the success of the first efficacy study of its covid vaccine against Omicron.
- Spain orders 20 Eurofighter (BAE Systems, leonardo, Airbus) for more than EUR 2 billion.
- capgemini wins a contract as part of the “Grand Paris Express”.
- Gaztransport and Technigaz obtains an order from Dalian Shipbuilding Industry Co for the design of the tanks of two new methane tankers.
- 41% of eligible staff Veralia subscribed to the capital increase.
- quadrant rolls out a network of parcel lockers in the UK, open to retail brands and carriers.
- Company of the Alps refinances your syndicated loan with RSC clauses.
- Nexity reinforces its presence in Occitania in promotional activities and residential development.
- Valneva et Pfizer announce the completion of the capital subscription operation.
- Bureau Veritas et Metal Jacket organize their general assemblies.
- vision of pixio expands its Board of Directors.
- Cegedim Health launches Maiia Connect, its new free instant messaging system that connects all health professionals.
- Virbac release your dividend.
In the world
Important (and less important) announcements
- The adjusted earnings of FedEx for fiscal year 2023 it will ultimately be higher than expected.
- Italy approves the acquisition ofatlantis pair black stone and the Benettons.
- the actions of Toyota et subaru at half-staff after the announcement of the withdrawal of electric vehicles.
- ENI postpones the IPO of Plenitude due to market conditions.
- Netflix it will lay off 300 people worldwide, or 3% of its workforce.
- Contemporary Amperex technology completed its private placement of shares for $6.7 billion.
- universal music group places 1,000 million euros in bonds to refinance its debt.
- The United Kingdom is close to accepting the concessions offered by Cobham/Advent to obtain the green light for the acquisition ofultraelectronics.
- The FDA orders Juul Labs, whose altria is a majority shareholder, to cease the sale and distribution of vaping products.
- The Wall Street Journal reports that Zendesk would be close to a takeover bid by Private Equity.
- Blackberry Beats revenue estimates thanks to demand for cybersecurity services.
- Google denounce Italian spyware used to hack smartphones.
- Mercedes He denied reports in the German weekly Manager Magazin that the automaker planned to sell its utilities division to focus on the premium vehicle segment.
- zalando issues a warning about its goals for 2022.
- AMS-Osram, Landy’s + Gyr, Clariant, entertain et avast hold their general assemblies.
- Cryptocurrency exchange CoinFlex announced on Thursday the suspension of all fund withdrawals.
- Top posts of the day: Carmax, McKesson… Full schedule here.