Singular session yesterday on the stock market, started in panic in Europe and ended sharply down, but on a note deemed positive by investors. To the tune of “it could have been worse”, as the indices opened at the lowest and ended at the high of the session. In the United States, the contrast was not as strong but the trio of major indexes, S & P500, Nasdaq 100 and Dow Jones, nevertheless gave up a little more than 1%. In three sessions, Wall Street has lost about 3%, the largest bearish streak in such a period since September. The good news is that leading indicators on both sides of the Atlantic are trending sharply higher this morning, a sign that a relatively strong rebound is emerging. Asia is showing the way by recouping its recent losses.
The markets are still torn between an economic outlook which seems solid for 2022 on the one hand and pandemic-inflationary turmoil on the other. The return to less exuberant monetary policies, particularly in the United States, has lowered risk tolerance and is helping to increase volatility at the end of the year. This results in some mood swings. Yesterday morning, investors were crushing under the weight of the new restrictions decided here and there to curb the advance of the Omicron variant of the coronavirus. But as often in recent weeks, they hastened to buy back the floors of the session: when valuations are tight, we are satisfied with small air pockets to reload positions. After all, it is a technique that has worked for months, even years, thanks to the largesse of central banks. Investors are of course concerned about the fact that they seek to disengage, but in an alternative mode rather than continuous for the moment.
Countries are struggling to stop Omicron’s advance, but without success. The United States have just revealed that 73% of contaminations on their territory are due to the new variant, against 3% the previous week. The bans enacted everywhere seem ridiculous in the face of this tidal wave. Epidemiology specialists, there are now billions of us, speculate on all kinds of parameters in an attempt to unravel the mysteries of Omicron, finding that it is ultra-contagious but secretly hoping that it is not very dangerous. and likely to make us achieve collective immunity.
The end of the year calls for all kinds of assessment. This morning I chose to take an interest in a CAC40 stock, an index that has posted 26% gains since the 1er January by including the dividends distributed. This performance places him at the 1time place of the major global indices in 2021. Do you know what is the flagship value of the flagship index of the year? A luxury value obviously, in this case Hermès International, which has grown by 75.5% since the 1er January. Investors thus salute the metronome regularity of the progression of financial results and the increase in the value of a brand that is becoming legendary. While the company is very generously valued and was already before the increase in 2021. The action is currently paying 62.5 times the expected results next year, against a weighted average of 18.4 times for a hundred of main French companies (I used data from AlphaValue). This is the second highest PER in the CAC40, behind Dassault Systèmes (PER 2022 of 74.3 times), the only French technological value valued in the United States.
Hermès also illustrates the fact that, sometimes, one should not follow too consensual positions. Since I quacked about the financial markets, which is roughly twenty years, Hermès has almost always been the lowest rated serious security by analysts (it still is today). In fact, she always gave them problems and the dominant comment was “what is beautiful, but what is expensive!In other words, the investors who followed the average consensus never entered on the title. And therefore have not multiplied by 28 their stake in twenty years. Morality, certain titles have their own dynamics which makes them They think outside the box of traditional financial analysis The downside is that they have to maintain a constant level of excellence, otherwise the punishment can be severe.
Leading indicators are therefore clearly bullish this morning, which should allow European indices to erase their losses from the day before. Tokyo gained 2% at the close.
* “buy the dip” is the Anglo-Saxon expression devoted to the strategy of buying while taking advantage of times of decline. It is often used a posteriori to justify a rise in indices after a low point. At first glance, it’s more complicated: buying at the lowest is a science about as exact as economic modeling, epidemiology in the covid period or Turkish monetary policy. The CAC40 recovered 1.10% to 6945 points at the opening.
The economic highlights of the day
Not much to eat today on the side of macroeconomic statistics.
The euro rallies slightly towards $ 1.128. Gold lost ground to $ 1,791 an ounce. On the oil market, a barrel climbs slightly to USD 72.10 Brent and USD 69.30 WTI. American debt bears interest 1.42% over 10 years. Bitcoin wakes up 48,700 USD.
The main changes in recommendations
- BillerudKorsnäs: ABG moves from buy to hold targeting 175 SEK.
- Deutsche Börse: UBS moves from neutral to buy, targeting EUR 165.
- DiaSorin: AlphaValue remains for the purchase with a price target reduced from 210 to 200 EUR.
- Eurobio: Midcap Partners is still buying with an objective raised from 37 to 38 EUR.
- ISS: Handelsbanken switches from keep to buy, aiming at 145 DKK.
- Neste Oyj: Kepler Cheuvreux switches from holding to buying, aiming for EUR 55.
- Nordex: Stifel starts buying monitoring by targeting 20 EUR.
- Novem: Berenberg remains for the purchase with a target price reduced from 28 to 26 EUR.
- Pierre & Vacances: Portzamparc switches from keeping to buying, aiming at 2.50 EUR.
- Petrofac: Morgan Stanley resumes line-weighted tracking targeting 126.88 GBp.
- Reckitt: Barclays remains overweight with an objective raised from 8,900 to 9,400 GBp.
- Safe Group : Midcap Partners remains to be kept with a target reduced from 0.40 to 0.36 EUR.
- Schweiter: Baader Helvea remains to be accumulated with a target reduced from 1775 to 1450 CHF.
- Straumann: Bernstein goes from neutral to outperforming targeting CHF 2150.
- TUI AG: Peel Hunt starts follow-up to keep targeting 210 GBp.
- Wizz Air: AlphaValue starts buying tracking by targeting 4024 GBp.
In France
Important (and less important) announcements
- Sanofi will buy Amunix, a specialist in immuno-oncology, for $ 1 billion in initial payment and $ 225 million in milestone payments.
- GrandVision will exit the Amsterdam Stock Exchange on January 7 following the success of EssilorLuxottica’s offer.
- The British CMA submits the merger between Veolia and Suez to an in-depth investigation.
- TotalEnergies is commissioning the largest battery-powered electricity storage site in France.
- Airbus will “vigorously” defend its position in its dispute with Qatar Airways, which is attacking it over a fuselage problem on the A350.
- Bolloré is negotiating the sale of Bolloré Africa Logistics to MSC on the basis of an enterprise value of € 5.7 billion.
- Eramet has identified financial fraud in its cash management at the group’s head office, valued at € 45 million excluding insurance.
- SEB expands in Africa by signing a majority joint venture with Preciber.
- Cameroon chooses Edenred’s digital solutions to optimize the management of its new subsidy program for local coffee and cocoa farmers.
- Ipsen confirms its 2024 forecast despite the arrival of a lanreotide product competing with one of its bestsellers, Somatuline Depot.
- Gaztransport & Technigaz is entrusted by Daewoo Shipbuilding with the design of the tanks for two new LNG carriers.
- Covivio sells its shares in two buildings for € 325 million.
- Latécoère invests in Caeli Nova.
- Gaussin signs a partnership with the Terminal du Grand Ouest (TGO) to test the first hydrogen-powered heavy handling tractor in spring 2022.
- OSE Immunotherapeutics strengthens its management team.
- New convertible draw at Pharnext.
- SMCP appoints Charlotte Tasset Ferrec as CEO of Maje.
- DBV Technologies will launch a new pivotal phase III study with Viaskin Peanut to resubmit the case to the FDA. The dossier submitted to the EMA is withdrawn.
- Buy-Rent takes a minority share of Real Estate-auctions.
- Tea Blockchain Group supports The Sandbox in the development of its Métavers.
In the world
Important announcements (and others)
- Oracle buys its compatriot Cerner for $ 28 billion ($ 95 per share).
- UBS Group is appealing in cassation in the case of tax evasion of rich French people.
- Eliott and Vista would prepare an offer on Citrix, according to Bloomberg.
- Tesla has lost again the 35% gained since the signing of the giant contract with Hertz.
- Nike takes 3.8% off session after its quarterly.
- The management of Rocket Internet is considering a buyback at 35 EUR per share.
- DKSH strengthens itself in special ingredients with the takeover of HTBA.
- Micron takes 6.8% off session after its quarterly.
- BKW offers itself UMB.
- Stadler Rail takes control of German BBR.
- Complaint against Walmart for illegal disposal of hazardous waste.
- Sandoz (Novartis) files a US application for a Herceptin biosimilar.
- FWD withdraws from going public in New York.
- Main results publications : General Mills, FactSet, BlackBerry…
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