The equity markets offered themselves a new rebound yesterday, finally in Europe and Asia since the American indices sank into negative territory at mid-term following an article by Bloomberg, which points to the effects of the economic slowdown on the machinery of Apple. More concretely, the group at the apple plans to slow down its spending and hiring in certain units, enough to bring down the libido of the Nasdaq100, which has lost nearly 250 points in a few hours. Investors are also keeping an eye on macroeconomic data, the rise in bond yields but also the number of coronavirus contaminations, which did not evaporate with the scorching heat of summer. This context, a source of hesitation between strategies geared towards bargain purchases of securities that have driven the market over the past ten years and more defensive ones, risks dominating the month and a half remaining to run until the start of the september. All complemented by the results and outlook of companies, which have been rather favorable so far, even if fears of recession are forcing companies to put a lot of conditionalities in their projections.
Today’s agenda, relatively blank in terms of leading macroeconomic statistics, will on the other hand be busier on the business side, with Novartis, BHP Group and Vinci in particular this morning in Europe, while waiting for Johnson & Johnson, Lockheed Martin and Netflix to midday in the United States. This accumulation of results and forecasts is important because it will allow analysts to test their annual scenarios and will help guide market sentiment. A feeling that will be more or less fixed at the end of next week, since a majority of companies will have published, allowing data providers to produce their usual range of statistics. At this stage, even if the sample of studies is too small since it only covers 35 S&P500 companies, it seems that the results campaign will be favorable. In any case, this is revealed by the first report from Refinitiv, which indicates that 80% of the companies which published their half-year results exceeded analysts’ expectations. Again, it is still too early to draw conclusions.
Today’s session will therefore be marked by a series of results and the absence of major macroeconomic indicators. Rebelote tomorrow and the day after tomorrow with a lot of company figures, but also the announcements of the European Central Bank on its monetary policy. A long-awaited meeting while the institution is at a crossroads in terms of strategy, since the Institution will formalize an increase in its key rates by 25 basis points, or even 50, you never know.
I end this morning column with a few words on Europe’s dependence on Russian gas and its catastrophic impact on importers such as the German energy company Uniper, majority owned by the Finnish group Fortum. The group, in lack of cash, is doomed to take emergency measures, such as drawing on its stocks instead of sourcing on the spot market where prices have soared. According to Reuters, Gazprom has declared itself in a situation of force majeure with certain importers, including Uniper, which recently had to activate a credit line of 2 billion euros to avoid bankruptcy. Force majeure is a provision of a contract that releases both parties from any obligation if an extraordinary event directly prevents one or both parties from performing, which means that Gazprom could potentially fail to meet its delivery commitments. of gas due to exceptional circumstances. This is enough to raise the pressure even further as the European authorities fear a complete shutdown of the supply of Russian gas.
In Asia this morning, attempts to rebound have been more or less wiped out, except in Tokyo where the Nikkei 225 gained 0.80% at the end of the course. The ASX 200 is down slightly, while the Chinese indices are in a slightly more pronounced contraction, around 1.15% for the Hang Seng and 0.90% for the CSI 300. As for the European leading indicators, they are bearish in order to catch up with the contraction of Wall Street yesterday.
Economic highlights of the day
On the program for the session, the last reading of inflation (11:00 a.m.) in Europe before building permits and housing starts (4:00 p.m.) in the United States. The central banks will occupy the field at the end of the day with two allocations, the first at 5:00 p.m. with the BOE and the second at 8:35 p.m. with the Fed. All the macro agenda here.
euro rose to 1.015 USD. The ounce of gold stagnates at 1709 USD. Oil rises with a Brent from the North Sea at 105.80 USD per barrel and an American light crude oil WTI at $102.30. The performance of the american debt at 10 years climbs to 2.97% over 10 years. the bitcoin is trading for 21950 USD.
The main changes in recommendations
- Adecco: Goldman Sachs remains neutral and lowers its price target from 40 to 38.50 CHF.
- Atos: Citigroup lowers its target price from 25 to 12 EUR.
- Capgemini: Citigroup lowers its target price from 225 to 205 EUR.
- Compagnie Financière Richemont: Deutsche Bank remains long but with a price target reduced from 155 to 145 CHF.
- Credit Suisse: Barclays maintains its opinion to overweight but lowers its target from 5.50 to 5 CHF.
- Danone: Berenberg goes from selling to keeping with a price target raised from 50 to 52 EUR.
- Deutsche Telekom: Oddo BHF is resuming its outperformance tracking with a price target of EUR 23.
- Fevertree Drinks: HSBC goes from buy to cut with a price target of 800 GBX. Barclays moves from overweight to weighted in line with a price target of 1000 GBX.
- Flughafen Zürich AG: Citigroup goes from selling to buying with a price target raised from 142 to 175 CHF.
- Givaudan: Berenberg is still buying, but with a price target reduced from 4,500 to 3,800 CHF.
- Julius Bär: Barclays is starting its online weighted follow-up with a price target of CHF 45.
- Lindt: Berenberg remains to be kept but with a price target reduced from 11,500 to 9,500 CHF.
- L’Oréal: Berenberg remains neutral with a price target reduced from 350 to 333 EUR.
- Neoen: Morgan Stanley moves from overweight to weighted in line with a price target of EUR 35.
- Nestlé: Berenberg is still buying but with a price target reduced from 139 to 128 CHF.
- Safran: Goldman Sachs remains buyer but with a price target reduced from 137 to 134 EUR.
- Swiss Re: Barclays raises its target price from 86 to 88 CHF.
- Telecom Italia: Oddo BHF resumes its outperformance monitoring with a price target of EUR 40.
- Telefonica: Oddo BHF is resuming its outperformance tracking with a price target of EUR 1.40.
- UBS Group: Barclays downgrades to underperformance with a price target reduced from 18 to 15 CHF.
- UnitedHealth: Goldman Sachs remains long with a price target raised from 605 to 625 USD.
- US Bancorp: Morgan Stanley remains neutral but with a price target raised from 54 to 57 USD.
- Vodafone: Oddo BHF resumes neutral tracking with a price target of 140 GBX.
In France
Important (and less important) announcements
- The quotation of Electricité de France will resume today at 9:00 a.m., subject to the publication of a press release by the French State.
- Aéroports de Paris is revising its traffic forecasts for 2022 upwards.
- Alstom’s sales increased by 8% in the first quarter. The group confirms its outlook.
- Cape Verde hands over the management of its seven airports to Vinci under a 40-year concession contract.
- Stellantis halts Jeep production in China.
- Airbus and companies including Air France-KLM are exploring technologies for capturing CO2 in the air.
- Argan completes the acquisition of a 153,000m2 logistics platform.
- Neoen and Prokon will build a 40 MW wind project in Finland.
- Bastide Le Confort Médical sets up in Italy with the acquisition of the majority of the capital of the company Oxystore.
- Mersen delivers a centerpiece of the ELT, ESO’s future giant telescope.
- Biosynex, Ecoslops and Genoway reveal their accounts.
In the world
Important (and less important) announcements
- Lockheed Martin could supply 375 F-35 fighter jets to the US Department of Defense for $30 billion.
- Apple would slow down its hiring and its expenses according to Bloomberg.
- A subsidiary of General Dynamics obtains a 908 million dollar contract from the US Air Force.
- Alphabet shares are trading around the $100 mark, following the 20-to-1 split.
- Pfizer and BioNTech postpone deliveries of COVID-19 vaccine in the EU.
- Moderna’s COVID-19 vaccine obtains approval for use in infants in Australia.
- BlackRock signs a partnership with QLS Advisors in biomedical innovation.
- Boeing partners with Alder Fuels to develop sustainable aviation fuel. The manufacturer could receive an additional order for its 777X airliner from Qatar Airways according to Bloomberg.
- Lawyers for Twitter and Elon Musk will face each other for the first time today in a preliminary hearing.
- Porsche, a subsidiary of Volkswagen, expects a rebound in sales in China in the second half.
- Siemens completes the acquisition of the American company ZONA Technology.
- Novartis reports a fall in its profit in the second quarter to 1.69 billion dollars.
- Roche receives Breakthrough Device Designation from the US Food and Drug Administration for its Elecsys amyloid plasma panel for the detection of Alzheimer’s disease.
- Holcim acquires the assets of Ol-Trans in Poland.
- Lockdowns in China weighed on the activity of SGS AG.
- The United Kingdom confirms its intention to launch a Tempest demonstrator, a supersonic aircraft, with BAE Systems.
- ING Groep completes its $388 million share buyback program.
- HSBC is buying back $20 million worth of shares in London and Hong Kong as part of its billion dollar buyback plan.
- BHP Group reports lower copper and nickel production in its 2022 financial year.
- Norwegian telecom operator Telenor ASA beat expectations in the second quarter.
- Main publications of the day: Johnson & Johnson, Novartis, BHP Group… The whole agenda here.
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