We have often spoken of “the world after” from the start of the pandemic, as if Humanity should absolutely revise its plans in the face of an event that has not been seen for several decades. Without going so far as to share the feeling of Michel Houellebecq, not much has happened that really transcends since. On the financial markets almost less than elsewhere, since the turmoil was brief and the equity indices quickly resumed their ascent, as if decorrelated from the deep anxieties of the world.
Is the coronavirus moving from the pandemic stage to the endemic stage? The answer to this question is fundamental because it comes down to asking whether to remove most of the current restrictions in living with the disease, such as the flu or gastroenteritis. Western countries are in the process of asking it lip service. Spain for example, on the strength of the latest pharmacovigilance data available to it. The country recorded nearly 700,000 contaminations in seven days and 13.4% of hospital beds used for Covid patients. Around the same time last year, the figures were 115,000 and 13.8% respectively. On the basis of these statistics, which are accompanied by lower mortality, the Spanish government called on the EU to launch a reflection on the change of status of Covid-19. In other countries, this issue is also invading the media space.
The cursor of the acceptability of the damage of the pandemic has shifted considerably since March 2020. For politicians, it was very early to ensure that the health system was not completely overwhelmed. Governments all had in mind the images of Italian hospitals crowded with patients without care and carabinieri sorting patients. For the population, the initial marker was to have as few deaths as possible. Two years later, the priorities have changed, the great lyrical outbursts in favor of a better world have not weighed very heavily in the face of the Black Friday promotions and weariness has won over the population. In the end and despite appearances, the lines of tolerance of governments and populations may be converging: accept the disease if it is not too virulent or too lethal and if the health system is able to absorbing it can constitute a form of compromise, in exchange for a return to freedom.
For investors, who are currently focused on the facial expressions and vocabulary of Jerome Powell, the difference is significant. In either case, they can project themselves into a post-covid world. In the other not. In the first situation, Airlines and Accommodation may be more fashionable than Healthcare, to make the line bigger. In the second, the current in-between is likely to persist until the next wave reassures or frightens everyone. Is it really serious you will say to me, since the financial markets have become capable of evolving in all kinds of environments while keeping a bullish profile? Frankly, I don’t know, but I still have the feeling that the Society as a whole is in dire need of moving on.
To return to more down-to-earth considerations, European leading indicators are moving not far from equilibrium this morning after the slight gains signed by the three major Wall Street indices yesterday at the close. Asia is rather in decline, except in Australia. The financiers seem to take their side with a quartet of rate hikes this year in the United States, with a first turn of the screw in March. The reactions of the different asset classes are complicated to interpret between them: bond yields are stagnant, the dollar is falling, gold is rising and oil is strengthening.
The economic highlights of the day
In the United States, weekly jobless claims and December producer prices are expected at 2:30 p.m.
The euro climbed back to $ 1.144, while an ounce of gold continued to climb to $ 1826. Oil retreats slightly after warming up to $ 84.42 Brent and $ 82.40 WTI. The yield on ten-year US debt varies little at 1.74% (+1 point). Bitcoin is flirting with $ 44,000.
The main changes in recommendations
- ABB: Barclays remains in line weighting with a price target raised from 33 to 36 CHF.
- Asos: AlphaValue remains for the purchase with a target price reduced from 3735 to 3223 GBp.
- Rail: Barclays moves from overweighting to online by targeting EUR 29.
- Berkem Group: Berenberg starts monitoring the purchase by targeting 12 EUR.
- HeidelbergCement: Jefferies remains to be held with a target price reduced from 65.30 to 64.90 EUR.
- Henkel: Societe Generale switches from sell to buy targeting 88 EUR.
- K + S: Berenberg switches from holding to buying, aiming for EUR 20.
- Mears: Jefferies switches from keep to buy, aiming for 275 GBp.
- Nokia: Handelsbanken switches from buy to hold targeting EUR 6.
- OCI: Berenberg remains on the buy side with a price target raised from EUR 31 to 33.
- Randstad: JP Morgan moves from online weighting to underweighting, targeting 59 EUR.
- Stellantis: Jefferies remains for the purchase with a price target raised from 22 to 25 EUR.
- Swiss Life: Julius Bär raises his target from 570 to 650 CHF.
- Umicore: Jefferies continues to underperform with a target price reduced from 33 to 25 EUR.
- Vinci: Barclays shifted from online weighting to overweighting, targeting EUR 113.
- Yara: Berenberg remains to be held with a price target raised from 495 to 500 NOK.
In France
Important (and less important) announcements
- Vinci will operate seven airports in Brazil.
- Airbus renews its framework contract with Safran and Sonovision.
- IBM and Capgemini
- Cyril Malargé takes over as General Manager of Sopra Steria, which raises its forecasts.
- Vallourec announces a temporary interruption of the operation of its Pau Branco iron mine following the exceptional rains in this region of Brazil.
- SCOR and the Swedish pension fund Alecta forge a strategic partnership by creating the Atlas Gotland sidecar.
- Icade issues € 500 million in green bonds.
- Derichebourg is renewing its positions and pursuing its development in waste management and urban cleanliness, signing nine contracts for € 350 million.
- Vicat develops the first zero carbon binder.
- Verimatrix assigns its historic NFC patents to Infineon.
- Diagnostic Medical Systems sells its Wellness subsidiary.
- Ekinops, Fountaine Pajot, SQLI and Société Fermière du Casino Municipal de Cannes have published their accounts.
In the world
Important announcements (and others)
- Taiwan Semiconductor earnings beat expectations in Q4.
- Fast Retailing earnings exceeded expectations in Q4.
- Geberit shows its strongest growth in 22 years.
- Banco Santander among the contenders for the Mexican subsidiary of Citigroup, according to Bloomberg.
- Google wants to appeal to European judges to settle its conflict with the Cnil.
- First strike in 25 years for Dutch Heineken employees.
- Microsoft is hiring an Apple engineer to design its own server chips.
- Hitachi is expected to sell half of its stake in its construction subsidiary, according to NHK.
- Blackstone improves its offer on Crown Resorts to AUD 13.10 per share in cash.
- Short sellers rely on Beyond Meat.
- Zurich Insurance could exceed financial targets for 2022, according to its CEO.
- Adler sells a € 600m real estate portfolio to KKR and Velero.
- Schlatter takes control of the Italian company Sokol Engineering.
- Groupe Bruxelles Lambert wants to focus on private investment.
- Main results publications : Taiwan Semiconductor, Fast Retailing, Tesco, Delta Air Lines, OMV, Persimmon, Bossard …
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