Investors are still torn between the fear of missing the bandwagon, the “fear of missing out” or “FOMO” for short, and the fear of being embarked on a complicated stock market year. The consequence is increased volatility, visible in the return of the VIX index above 20 points for the first time since last month. The marker of this tightness is called the Nasdaq, which fell sharply yesterday by 2.57%, erasing in passing the three rebound sessions at the start of the week. Curiously, aristocrats of technology are being knocked out, like Microsoft and its -4.2%, in the same way as the usual files with stratospheric valuations, from DocuSign to Mercadolibre via JD.com. We could also use Cathie Wood’s Ark Innovation fund as a benchmark, which has just returned almost 9% in two sessions, to fall below the USD 80 per share mark, a drop of 50% since the peaks of February 2021.
The main determinant of stock market weather remains the ability of the US central bank to fight inflation without derailing the economy. Since the beginning of the year – in fact since the publication of the minutes of the last Fed meeting on January 5 – it seems that the market believes in it every other day, or something like that. If the prevailing sentiment had to be summed up, it would be “rate hikes and the end of economic support measures are necessary but anyway if something goes wrong the Fed will backtrack and bring out the dollar cannon“. This may be true, but not necessarily reassuring from the point of view of economic imbalances.
In the meantime, the markets continue to operate on emotion. I don’t know if Jerome Powell and his future number two Lael Brainard shared the roles of good cop and bad cop, but it looked like it. Tuesday the first had delivered a speech a little less offensive than expected in the American Senate. Balance sheet: +1.4% for the Nasdaq. Yesterday, the second used a more severe vocabulary on monetary policy. Balance sheet: -2.57% for the Nasdaq. The fact is that inflation can only be combated by conventional monetary measures and that this requires some strategic adjustments for investors, except to plan for the long term.
Macroeconomics will cede some of its media hegemony to listed companies today, with a first set of fourth quarter earnings releases. As tradition dictates, it’s the American financials who will take the brunt at midday, and not the least since the quarterly accounts of JPMorgan Chase, Wells Fargo, BlackRock and Citigroup are expected. The sector should only reserve good surprises, given the current context. In Europe, earnings releases from major companies will only begin next week.
In France, there is a risk of talking again about Electricité de France, its setbacks in nuclear production and the ceiling on the rise in electricity prices decided by the government. In such a context, the question of the usefulness of a stock market listing will come up again.
European stock markets will fall this morning at the open, in reaction to the sharp decline recorded on Wall Street yesterday. Asia ends the week in the red for the same reasons.
Economic highlights of the day
In the United States, two December statistics are to be followed, retail sales (2:30 p.m.) and industrial production (3:15 p.m.). November business stocks and the University of Michigan Consumer Confidence Index will follow at 4:00 p.m. This morning, China announced disappointing figures for its imports and exports for the month of December, which did not prevent it from signing a new record surplus in 2021.
The euro strengthens to 1.14754 USD. The ounce of gold stabilizes around 1826 USD. The barrel remains firm at 84.38 USD for Brent and 81.85 USD for WTI. The 10-year American debt is remunerated at 1.72% (-2 points). Bitcoin is trading around USD 42,700 per unit.
The main changes in recommendations
- Interroll: Exane BNP Paribas starts tracking at neutral, targeting CHF 3,900.
- Jungheinrich: Exane BNP Paribas starts tracking outperformance by targeting EUR 54.
- Kion: Exane BNP Paribas resumes outperformance monitoring by targeting EUR 126.
- MorphoSys: Morgan Stanley goes from overweight to weighted online by targeting EUR 50.
- Novartis: Morgan Stanley goes from overweight to weighted online by targeting 93 CHF.
- Philips: HSBC goes from keeping to buying, aiming for 38 EUR.
- Shop Apotheke: Baader Helvea remains to be accumulated with a target reduced from 140 to 125 EUR.
- Software AG: Goldman Sachs goes from buying to neutral, targeting EUR 39.
- Swedish Orphan Biovitrum: SEB Equities goes from hold to buy, targeting 240 SEK.
- VAT Group: Credit Suisse raises its target price from CHF 270 to CHF 321.
- Vitesco: Morgan Stanley starts the follow-up to underweight by targeting EUR 40.
- Zalando: DZ Bank goes from holding to buying, aiming for EUR 80.
In France
Important (and less important) announcements
- Michelin continues to develop WISAMO in partnership with the Compagnie Maritime Nantaise.
- Thales innovates with the first French collaborative work platform, certified “Diffusion Restreinte”.
- Electricité de France considerably reduces its nuclear production forecasts in 2022 and analyzes the impact on its objectives of the checks carried out on its nuclear fleet. The government has decided to cap the increase in regulated electricity prices at 4%.
- No third term for the CEO of KLM (Air France-KLM) Pieter Elbers, “landed” by Ben Smith.
- Wendel issues €300 million in bonds.
- Rémy Cointreau is canceling treasury shares representing 1.45% of the capital.
- Eurazeo acquires Ikaros Solar.
- Adthink, renamed NFTY, signs a €3 million dilutive financing contract in the form of OCAAs.
- Obiz enters into exclusive negotiations for the acquisition of Adelya, publisher of customer loyalty and animation solutions leader in NFC technologies.
- La Française de l’Energie’s certified reserves are on the rise.
- Thermador, Lucibel, Theranexus, Safe, Mauna Kea and Esker have published their accounts or announced forecasts.
In the world
Important announcements (and others)
- Alphabet, Meta Platforms, Twitter and Reddit will be heard in the investigation into the January 6, 2020 White House riots.
- SAP has published its forecasts and results.
- Tesla pushes back initial Cybertruck production to early 2023.
- Porsche (Volkswagen) will invest more than one billion euros in sustainable energy sources.
- Royal Dutch Shell will hand over the Deer Park refinery to Pemex next week.
- Delta Air Lines makes money in Q4 2021 but expects to lose money in Q1 2022.
- Microsoft joins a new coalition for the adoption of artificial intelligence in the health sector.
- Sonova acquires the American Alpaca Audiology for 285 MCHF.
- Monster Beverage buys CANarchy for $330 million.
- Partners Group exceeds 2021 expectations.
- Wisekey launches two IoT connectivity satellites on a SpaceX mission.
- LG Energy’s IPO is expected to take place at the high end of the range.
- Main results publications : JPMorgan Chase, Wells Fargo, BlackRock, Citigroup, Experian…
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