Yesterday, stock markets failed to agree between the two sides of the Atlantic, continuing to rebound in the United States and reduce major European indices. Germany’s DAX and France’s CAC lost just over 0.5%, while the broad US S&P 500 recovered nearly 1%. The distribution of profits on Wall Street shows that investors are still wary of what to do: technology has revived, and cyclical – no. The defense sector has also performed quite well. We are still celebrating a big change in 2022. Earlier, when financiers did not guess, they bought Apple. Now they are buying Exxon Mobil. This is somewhat cruelly contemptuous of the environmental aspirations of the time. And then the burden of guilt on those who dip their fingers, hands, and sometimes their whole hands back into the oil barrel is mitigated by the last chic narrative of the moment that investing in ESG is a good scam (it is, but not all, worth throwing away) .
It doesn’t take much to be happy now. Investors take what they find, everywhere, especially in China. For example, the resumption of activities in the country after quarantine. Or declarations by local politicians in favor of speeding up tax incentives for exports and supporting banks. Even Beijing’s approval of new video games is a sign that the central government may loosen the technology sector a bit. This news, which comes two days after the completion of the investigation aimed at Didi, helps to increase the Hang Seng technology index. Also, if you want a good mirror of Chinese technology stocks, check out the Prosus dossier. It’s a bit like using Katie Wood’s Ark Innovation ETF to assess the pulse of US technology stocks too expensive become.
Everything remains very fragile, because the macroeconomic context offers several areas that can be caught up. I’m talking about the expected macroeconomic context, because at the time of writing, activity indicators are still well targeted, even if they are not as bright as they were during coronavirus recovery. But the combination of the damage caused by inflation and the drying up of liquidity caused by the central bank’s policy of raising interest rates is still frightening. Speaking of liquidity, it is noticeably evaporating in US stock markets, where it is at its lowest level since the pandemic in 2020. So much so that financial intermediaries report that rather small transactions lead to market movements when they were almost invisible not so long ago. The Financial Times focuses on this article, which emphasizes that the decline in market depth is contributing to the staggering fluctuations that have been observed in some stocks in recent weeks, such as Walmart or Meta Platforms, after the announcement of bad news. This decline in liquidity also obviously has implications for the corporate finance market, where investors are logically becoming more selective as the amount of money available decreases. Bridgewater also openly bets on European and American corporate bonds.
The financial day began with the increase of the rate of the Central Bank of India by 50 basis points, as it should be, because now it is the rate. RBI has raised its inflation forecast and removed the term “accommodative” from its current vocabulary, which you don’t care about, but which still signals in central bank jargon that the party is over for a while. This gives me a pleasant transition to his European counterpart, who is going to a meeting in June tomorrow. The ECB should use this meeting to explain to the market what its strategy will be in the coming months in terms of unfavorable policies. Thus, rates can be adjusted by the rate of increase in rates, as the institution has not yet acted in this direction, unlike almost all other major central banks, except Japan.
In today’s big news, Credit Suisse has released a profit warning (again), parent company Zara Inditex has released quarterly results, and Oil is building a small fortress for $ 120.
In the Asia-Pacific region, the amount of ads from China has created a positive climate in Hong Kong and Japan, where the weakness of the yen continues to play its historic role in accelerating stock markets. The leading American indicators at the time of writing were quite bearish, but European indicators point in the direction of the rebound, fueled by both the difference in productivity observed on the eve of Wall Street, and good performance in Asia.
Economic moments of the day
Today there are few indicators. The OECD has to publish its new forecasts. The whole macro diary is here. The second reading of Japan’s GDP for the first quarter of 2022 shows a decrease of -0.1%, which is slightly weaker than the initial statistics (-0.2%).
The euro is relatively stable at 1.0682 US dollars. An ounce of gold is traded for about 1,846 US dollars. The price of North Sea oil is $ 120.67 per barrel, and US WTI light oil is $ 119.68. The yield on 10-year US debt fell by several points to 3%. Bitcoin is on the roller coaster and returns up to $ 30,100.
The main changes in the recommendations
- Assa Abloy: HSBC is moving from cuts to retention, seeking 225 Swedish kronor.
- Atlas Copco: HSBC is moving from maintenance to purchase, focusing on 130 Swedish kronor.
- BPER Banca: Jefferies is still buying with a target price of € 2.90 to € 3.30.
- BT Group: HSBC is moving from downsizing to retention, aiming for 185 GBp.
- DFS Furniture: Berenberg remains long, the target price is reduced from 325 to 280 GBp.
- Edenred: Berenberg remains to be saved, and the price has been raised from 35 to 42 euros.
- Galp Energia: AlphaValue still has to be reduced, and the price has been raised from 12.20 to 12.70 euros.
- Johnson Matty: Panmure Gordon is moving from holding to buying, aiming to get 3888 GBp.
- Kingspan: Goldman Sachs resumes monitoring of purchases, focusing on 105 euros.
- com: Berenberg remains to be saved, and the target price has been reduced from 90 to 72 GBp.
- Rockwool: Goldman Sachs restores neutral tracking, focusing on 2257 Danish kroner.
- Safran: Exane BNP Paribas is moving from neutral to forward, focusing on 134 euros.
- Schindler: HSBC is moving from retention to decline, aiming for 173 Swiss francs.
- Sika: Goldman Sachs remains long and the target has been reduced from 463 to 400 Swiss francs.
- Standard Chartered: Jefferies remains long with a target price raised from 972 to 991 GBp.
- Telefonica Deutschland: Berenberg goes from buying to selling, focusing on 2.10 euros.
- Yara: Morgan Stanley is moving from online weight to overweight, focusing on NOK 580.
- Zur Rose: UBS remains short, the price is reduced from 95 to 93 Swiss francs.
Important (and less important) ads
- The FDA approves Dupixent from Sanofi as the first biological drug to treat moderate to severe atopic dermatitis in children.
- Pernod Ricard is organizing an investor’s day. The group focuses on the “upper part” of the sales growth range from + 4% to + 7% per year.
- Schneider Electric has reached an agreement with Watlow to sell its Eurotherm3 business
- Saint-Gobain is investing 91 MCAD in its Montreal Plaster Plant.
- Faurecia holds a general meeting.
- Electricité de France appoints a new director of the nuclear program for France.
- Gaztransport and Technigaz receives an order from Hyundai Samho Heavy Industries to design new LNG gas tanks.
- DBV Technologies receives positive Phase III results with Viaskin Peanut in children aged 1 to 3 years with peanut allergy.
- Metalliance orders 12 multiservice vehicles from Gaussin to build the western Sydney subway in Australia.
- Rougier’s board of directors now plans to resume listing in late 2022 or early 2023.
- Ekinops selected Spie to provide extremely secure broadband access to 22 academic institutions.
- Auplata buys BSA Rare Earth Global for a token euro. He also received a request from San Antonio Securities for a refund of 32.1 million euros in cash for current account advances and the sale of shares in OSEAD funds. How to return this amount she thinks by the end of July.
- BIO-UV equips the MSC Caledonia II with a ballast water treatment system.
- Launch of a second-life battery partnership for electric vehicles between Entech, Stellantis, Talendi and Université Bretagne Sud.
- The shareholders of Financière et Immobilière de l’Etang de Berre confirmed the sale of the company’s main asset for 20.5 million euros.
- Hiolle supports the offer of 4.70 euros, focusing on it.
- Spineguard is partnering with the Sorbonne, CNRS and Inserm.
- Neurones, TotalEnergies EP Gabon and Akwel separate their dividends.
- Quadient, Grolleau, SII and Obiz published their reports.
In the world
Important (and less important) ads
- Credit Suisse again warns of its results.
- The Ebit Inditex index for the first quarter jumped, as expected (slightly lower).
- Taiwan Semiconductor CEO expects his company’s revenue to grow by about 30% this year.
- Western Digital is close to an agreement with Elliott Management, according to the Wall Street Journal.
- According to Reuters, Hasbro is close to winning the game against activist hedge fund Alta Fox.
- Agilent and Danaher are considering the British SPT Labtech, according to Bloomberg.
- Salmar and Gerresheimer hold a general meeting.
- The European Commission has approved Lunsimio from Roche.
- Burckhardt Compression has published results for 2021/2022.
- Main editions of the day: Inditex, Brown-Forman, Dollarama, Campbell Soup, Aveva, Soitec, Thor, Voestalpine, Wizz Air… The whole agenda is here.