Russian roulette, roller coaster, Russian bear, good kisses from Russia… While waiting to find out how to place Russian cigarettes or Russian dolls, I think I was exhausted by a lot of cliches last week. But we will still have to renew ourselves because the crisis on the Ukrainian border still monopolizes media attention. Rather logical, since the arm wrestling started between the East and the West does not really lose in intensity and that it occupies beautiful people. Several theories circulate on the strategies at work on both sides. Russophiles seem to think that Vlad leads everyone by the nose. The Atlanticists find that Joe effectively blasted the Kremlin’s dark designs with his tactic of publicizing all Russian troop movements in the media. The Europeans are trying to fix everyone. Like Emmanuel Macron who managed to get Joe Biden and Vladimir Poutine to accept a meeting. Both leaders accepted the proposal, at least in principle. Provided that Russia does not invade Ukraine, the White House took care to specify.
The equity markets have also taken sides: they do not like uncertain situations and even less those that are totally outside the framework of their usual routine. A tank is still rarer than an investigation for embezzlement on Credit Suisse or the creation of a new cryptocurrency. The indices again lost ground last week, and more because of geopolitics than the consequences of unbridled inflation which will require a severe recovery. New concrete proof this weekend: when I started preparing my column last night, the American leading indicators were red “bloodbath”, because of the skirmishes in the Donbass which could have served as a pretext for a Russian attack. But the mediation proposed by the Elysée has reversed the trend and Western indices point this morning to a rebound. Emmanuel Macron ally of finance? I’ve heard that somewhere before.
This improvement in the sinusoidal relationship between the two factions led to an overnight decline in oil prices, gold and the VIX volatility index. However, the latter remains quite high, in the 20 to 30 point zone which seems to have become the norm since mid-January. While waiting to find out the next twist in this major crisis, here are a few informative briefs to start the week off on the right foot:
- The American markets are closed to celebrate the birth of George Washington (whom I learn that he enjoyed honorary French nationality at the end of his life, by decree of the National Assembly in 1792).
- 84% of the companies present in the S&P500 index have published their quarterly results: 77% have exceeded earnings expectations for an average magnitude of 8.5% (which is almost in line with the average of the last 5 years for the two statistics, according to FactSet). Volatility obliges, overruns are less well paid than usual on the stock market for shares, while breaches are more severely punished.
- God save the queen: Elisabeth II (95) contracted the Covid with rather mild symptoms.
- The Fed finally enacts investment prohibition and control rules for its senior officials and central bankers.
- Donald Trump launches “Truth Social”, his social network, today.
- The Beijing Winter Olympics are over.
- The Iranian parliament sets six conditions for an agreement in the nuclear field.
- This week on the macro diary, February PMI flash indicators (today), Germany’s Ifo business confidence index (Tuesday) and a double big chunk on Friday, PCE inflation and durable goods orders in the USA.
In still nervous markets, European markets are therefore expected to rise at the opening. In Asia, optimism is less well shared since most indices are down 0.5 to 1% at the time of writing, apart from Australia, which has picked up a few points. The CAC40 opened up 0.7% to 6981 points.
Economic highlights of the day
The market will know the morale of the purchasing managers of large companies thanks to the February PMI flash indices, published for the major economies throughout the day.
The euro recovered 0.4% to 1.136 USD. The ounce of gold, which exceeded 1900 USD a few hours ago, fell to 1893 USD this morning. Oil corrects by 2%, to 92.86 USD per barrel of Brent and to 90.73 USD per barrel WTI. Dead calm on the sovereign debt market with a 10-year US at 1.93%. Bitcoin is rebounding from a severe drop to $39,200.
The main changes in recommendations
- Air France-KLM: Liberum remains on sale with a price target raised from 2 to 3.50 EUR.
- Airbus: Jefferies remains long with a price target raised from 140 to 150 EUR.
- BigBen: In Extenso remains long with a target reduced from 21.80 to 20.40 EUR.
- Commerzbank: Barclays goes from underweight to weighted online by targeting EUR 8.70.
- Deutsche Rohstoff: Kepler Cheuvreux remains long with a price target raised from 27.30 to 36 EUR.
- Kinepolis: Berenberg remains on the buy side with a price target raised from 64 to 70 EUR.
- Klépierre: HSBC goes from holding to buying, aiming for EUR 31.
- L’Oréal: Societe Generale goes from keeping to selling, aiming for 339 EUR.
- Nordnet: Berenberg remains long with a price target raised from 210 to 230 SEK.
- Publicis: AlphaValue goes from reducing to accumulating, targeting EUR 71.50.
- Quadient: AlphaValue remains long with a price target raised from 27.40 to 28.40 EUR.
- Renault: Jefferies remains to be kept with a target price raised from 40 to 41 EUR.
- Roche: Berenberg remains to be kept with a price target reduced from 375 to 365 CHF.
- Salmar: SpareBank goes from buy to hold aiming for 660 NOK.
- Sanofi: Berenberg remains to be kept with a price target raised from 92 to 100 EUR.
- Siemens AG: Jefferies remains long with a price target raised from 195 to 200 EUR.
- Teleperformance: Societe Generale goes from holding to buying, aiming for EUR 400.
- Vicat: Berenberg is still to be kept with a target reduced from 42 to 40 EUR.
- Wacker Neuson: Jefferies goes from holding to buying, targeting EUR 31.
In France
Main results publications
- Faurecia: the margin should increase this year. The 2022 financial objectives will be detailed on April 28, then a strategic plan will be unveiled in the second half.
- Icade: the annual results are up sharply. A dividend of EUR 4.20 will be proposed.
Important (and less important) announcements
- Air France-KLM plans a rapid recapitalization with all its reference shareholders, namely China Eastern, Delta Air Lines, the Netherlands and France, according to Les Echos.
- Worldline will accept a €2.3 billion offer for its TSS division from Apollo, including €1.7 billion in cash.
- Lagardère Travel Retail signs an agreement to acquire a majority stake in Creative Table Holdings.
- GreenYellow (Casino) raises approximately €200 million.
- Valneva obtains €24 million in funding in Scotland to develop its vaccines.
- The consortium of contenders for Pierre & Vacances is extending its offer until March 4.
- Vicat and Béton Direct are joining forces to develop online sales of ready-mixed concrete.
- Nicox obtains a patent on NCX470 in China.
- Umanis signs a new senior multi-tranche credit agreement to support its development and its external growth policy.
- Société Foncière Lyonnaise proposes a dividend of EUR 4.20 after its annual results.
- Altheora will not buy Edel Tamp.
- Auplata resumes the activity to God Thank you.
- The Parisian Capital Contributions Company is negotiating the acquisition of a hotel reservation platform based on artificial intelligence.
- Biosynex holds 4.04% of the capital of Novacyt.
In the world
Important announcements (and others)
- Credit Suisse is (again) being singled out for reprehensible acts.
- Carl Icahn wants to appoint two board members at McDonald’s, according to the WSJ.
- Diageo has started a £1.7bn share buyback program.
- Telecom Italia said on Sunday that the article published by Il Messaggero regarding the financial targets the telecom operator is working on was “unfounded and detrimental to the group”.
- The main publications of the day: Berkshire Hathaway, Sasol, Galp Energia, Faurecia, Dechra… The whole agenda here.
Readings