Investors are unsure on which foot to dance to start 2022. They are torn between their almost intact appetite for equities and the feeling that after golden years in the stock market, the machine may need to breathe. The best concrete manifestation of this state of affairs comes to me from Bank of America in its latest flow analysis. It shows that investors keep pumping cash into equities, even in the somewhat messy first half of January, as their sentiment becomes increasingly bearish. This may be a bit of an absurd behavior but it once again illustrates the fact that there is no better place to put your money right now. The “TINA” (There Is No Alternative) concept in all its glory.
As for the general atmosphere, it is still marked by the upcoming rate hikes in the United States and elsewhere, but especially in the United States. This morning, the macroeconomic news also comes from China, where the GDP of the 4and quarter of 2021 came out slightly above expectations, allowing Beijing to claim 8.1% growth in 2021, beyond its target. The authorities are well aware that the momentum could weaken, so they have urged local governments to support infrastructure investment. At the same time, the Chinese central bank announced last night a drop of two of its key rates, an additional sign that the country is strengthening its support for the economy, at a time when the Western powers are doing the opposite. However, China must deal with major bottlenecks, linked in particular to persistent disorders in supply chains, and some fears about the Omicron variant of the coronavirus, which appeared in Beijing three weeks before the opening. of the Winter Olympics.
At company level, this third week of January marks an intensification of corporate results publications. The Charles Schwab, Rio Tinto, Bank of America, Goldman Sachs, UnitedHealth, ASML, Netflix or BHP will announce their 2021 performance and provide guidance on their 2022 projections. The following week will see a significant acceleration in announcements, with some stars of the compartment technology and big European names.
The Western stock market session will be truncated by the holiday in the United States, where we celebrate Martin Luther King. In the rest of the news, some information not to be missed:
- Unilever has confirmed that it has approached GlaxoSmithKline with a view to buying its consumer healthcare arm for £50bn (€60bn). GSK rejected the offer. Analysts received the idea very coldly.
- The “Vaccinal Pass” has been definitively adopted in France.
- Electric cars are taking over diesel in Europe for the first time, as the Financial Times and other publications point out.
- The press seizes on the Wordle phenomenon, this letter game with a unique history that has invaded social networks.
- The catharsis continues for Credit Suisse, with Chairman António Horta-Osório resigning less than a year after his arrival after he twice violated Swiss quarantine rules. He will be replaced by Axel Lehmann, who will have the heavy task of restoring the image of an establishment embroiled in several scandals in recent years.
- Investor Bill Ackman thinks the Fed should raise rates by 50 basis points as early as March to restore credibility and show its determination to fight inflation.
The CAC40 resumed 0.35% to 7168 points at the start of the session.
Economic highlights of the day
China’s growth of the 4and quarter reached 4% over 1 year, beyond the average expectations of economists (3.3%).
The euro is trading at 1.14191 USD. The ounce of gold evolves to 1822 USD. Oil slightly consolidates its recent gains: $86.32 per barrel of Brent and $84.24 per barrel of WTI. The yield on US 10-year debt rose to 1.78%. Bitcoin remains wisely in the 42,500 / 43,000 USD zone.
The main changes in recommendations
- Admiral: HSBC goes from buying to keeping, aiming for 3150 GBp.
- Ageas: HSBC goes from buying to keeping, targeting EUR 52.50.
- Alfa Laval: Morgan Stanley moves from online weight to underweight by targeting SEK 300.
- Assa Abloy: Berenberg remains long with a price target raised from 305 to 320 SEK.
- Banco de Sabadell: HSBC goes from holding to buying at targeting EUR 0.85.
- BE Semiconductor: Deutsche Bank remains long with a price target raised from 84 to 96 EUR.
- Bossard: Research Partners goes from holding to buying.
- Bouygues: Jefferies remains long with a target raised from 40 to 42 EUR.
- British American Tobacco: Jefferies remains long with a target raised from 3769 to 3900 GBp.
- Electricité de France: HSBC goes from buying to keeping, aiming for 10 EUR.
- Eurofins: Berenberg remains to be kept with a price target reduced from 105 to 100 EUR.
- Euronext: Morgan Stanley reduces its target price from 101 to 98.90 EUR.
- Frontier Developments: Berenberg remains long with a reduced target price of 2500 to 2000 GBp.
- Henkel: Morgan Stanley goes from underweight to weighted online by targeting EUR 87.
- Hiscox: HSBC switches from buy to hold targeting 990 GBp.
- Imperial Brands: Jefferies remains to be kept with a target raised from 1578 to 1616 GBp.
- Legrand: Morgan Stanley goes from overweight to weighted online.
- Logitech: Goldman Sachs reduces its target from 102 to 88 CHF.
- National Grid: Societe Generale goes from buying to keeping, aiming for 1080 GBp.
- Pandora: SEB Equities goes from selling to holding, aiming for 800 DKK.
- Rémy Cointreau: AlphaValue remains seller with a target raised from 480 to 166 EUR.
- Safran: Barclays raises its target price from 130 to 134 EUR.
- Scor: Berenberg remains on the buy side with a price target raised from 36 to 37 EUR.
- Swedish Match: Jefferies remains underperforming with a target reduced from 57.40 to 53 SEK.
- Swisscom: Jefferies remains underperforming with a target reduced from 427 to 413 CHF.
- Unilever: Barclays goes from overweight to weighted online by targeting 4600 GBp.
In France
Important (and less important) announcements
- Nicolas Dufourcq (Bpifrance) would hesitate to take the general management of Orange, according to La Lettre A.
- TotalEnergies sells a joint venture in Angola.
- Renault sold 2,696,401 vehicles in 2021, down 4.5% year on year.
- If elected, Yannick Jadot will renationalise Electricité de France.
- Air France-KLM supported Deutsche Lufthansa by asking European regulators on Friday to be more flexible in controlling take-off and landing slots.
- Neoen is launching the construction of a 412 MW wind farm, the first phase of its “Goyder Renewables Zone” in Australia.
- Former Wendel executives in court for tax evasion.
- OSE Immuno loses its general manager for health reasons. Dominique Costantini is in charge of the interim.
- Sensorion fails primary endpoint with Phase II SENS-401 in sudden sensorineural hearing loss.
- IDI and the Chevrillon Group sign the acquisition of Culturespaces.
- Actia is considering the sale of assets deemed non-strategic, with a view to creating the conditions to generate €800 million in annual revenue in four years.
- The main shareholders of Alpha Mos mandate Kepler Cheuvreux to place 11.79% of the capital.
In the world
Important announcements (and others)
- António Horta-Osório leaves the presidency of Credit Suisse less than a year after his arrival, replaced by Axel Lehmann.
- Unilever has confirmed that it has approached GlaxoSmithKline with a view to buying its consumer healthcare arm for £50bn (€60bn). GSK rejected the offer.
- Pfizer is planning investments in France.
- The investment fund Sixth Street Partners is in advanced discussions to buy a minority stake in the electricity production subsidiary Enipower of the Italian group Eni.
- Volkswagen could reduce its stake in its battery division, which could be the subject of an IPO, according to Thomas Schmall (member of the management board) at FAZ.
- Stadler Rail has won the largest order in its history, which could go up to €4 billion, from a consortium of six German and Austrian companies for Citylink tram trains.
- Triton raises its offer on Clinigen to 925 GBp.
- Several American states accuse Google and Meta Platforms (ex-Facebook) of colluding in the online advertising market.
- Ardian will acquire Biofarma for €1.2 billion.
- Cheplafarm launches its IPO in Frankfurt.
- Main results publications : The Charles Schwab, Rio Tinto, Repsol, Taylor Wimpey, Fraport…
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