A little nervous stock markets signed a convincing rebound yesterday, fueled by a rebellion of technology stocks. The Nasdaq recovered 1.5%. In Europe, also rebound with gains of around 1% for the French CAC40, the German DAX and the Swiss SMI. The increase was somewhat less pronounced in London, Madrid and Milan. The boss of the US central bank, Jerome Powell, is widely credited by the media for the increase. In fact, Jay brushed the market the wrong way yesterday during a parliamentary hearing. So much so that several commentators have given it the nickname “Goldilocks”, in reference to the famous tale with the three bears. Powell’s statement was neither too hot nor too cold, just perfect, like the little bear bowl in the Grimm Brothers story. “I’ve referred to Powell as Goldilocks in a suit before, and to some extent I think he played that role all over again.“, laughed the strategist of Interactive Brokers, Steve Sosnick. His counterpart at Oanda Jeffrey Halley evokes him a”masterful performance… worthy of Goldilocks“.
In reality, Goldilocks Powell hasn’t said much new. He confirmed that the priority goes to fighting inflation and reducing the Fed’s balance sheet. But he did not seem to want to speed up the process, which goes a little against the recent statements of some of his flock and the tenor of the minutes of the last meeting of the central bank. Investors feared more offensive comments that would have reinforced fears of a rapid interest rate hike and a forced reduction in the support plan. As a result of the races, the head of the institution continues to give the impression that the Fed’s mandate also includes the rise in the equity markets with full employment and inflation control. And that, investors obviously love, as evidenced by the gains of the day before, the beautiful green color of the leading indicators this morning in Europe and the hearty gains seen in Japan or China this morning.
Let us leave the wonderful world of central banks for the equally interesting world of semiconductors. Sometimes it is good to seek inspiration from colleagues. The aftermath of drunkenness, for example, because the excuse is all found. The days of blank page too, since it is part of the panoply of the journalist. Or quite simply because we found a very good article that we ourselves were unable to write. So thank you, Morgan Meaker, for writing this paper for Wired, which allows me to compensate at the same time for my anxiety about the blank page, my glasses of Languedoc white wine the day before and my shortcomings regarding ASML.
For those who don’t know, ASML is a Dutch company that owns what very few European technology companies can claim to have, a “moat” in Warren Buffett’s sense of the word. The nonagenarian of Omaha, known for his stock market vista and his sense of formula, likes companies that have a real advantage over others, which he calls a “moat”. A “moat” in English. The marketers of the 21st century might have advised him a sexier image, but it is the moat that has passed down to posterity. ASML now weighs more than L’Oréal on the stock market. It has become the fourth largest European capitalization, behind LVMH, Nestlé and Roche.
ASML designs and manufactures the machines that produce the chips that equip our cars, our boxes, our televisions, our smartphones, our game consoles, our computers, our speakers, our drones, and so on and the best. We know that the sector has been in constant tension for months and months, which scandalously delays the planned obsolescence of our technological toys. When a Taiwan Semiconductor, a Samsung or an Intel wants to build a fab, there is a four in five chance that they will order machines from ASML, which has over 80% of that market. Megan Meaker even tells me that the Dutchman owns 100% of the market for extreme ultraviolet lithography (known as “EUV”), the one which makes it possible to have the most efficient chips in the world. A technology which has cost several arms but which has given ASML 15 years ahead of the competition. A competition that is organized, especially in China where we are all the more in need as the United States has so far prevented ASML from selling EUV machines, because they contain lasers manufactured by an American company. . Is this a good thing or a bad thing? The future will tell, but the Dutchman is undoubtedly an example for European industry to follow. Investors were not mistaken by allowing the stock to be multiplied by 3.5 from the lows of March 2020. The rest of the story can be read on Wired.
Obviously, Goldilocks did some Powell, or the opposite, which put investors back on their feet after a failed start to the year. Rise in sight therefore, this morning in Europe. Next test meeting for the morale of the troops at 2:30 p.m. with US inflation in December, a major determinant for the pace of the Fed’s rate hike, again.
The economic highlights of the day
European industrial production in November (11:00 a.m.) will precede U.S. inflation in December (2:30 p.m.) and weekly US oil stocks (4:30 p.m.). On the night, China announced lower than expected inflation and producer prices rise in December.
The euro strengthens to $ 1.13723. The ounce of gold climbed back to $ 1,818. Oil fell slightly after yesterday’s gains to $ 83.6 Brent and $ 81.25 WTI. Slight drop in the yield of the 10-year T-Bond, remunerated at 1.73% (-3 points). Bitcoin stabilizes around $ 42,560.
The main changes in recommendations
- FD Technologies: Berenberg switches from keep to sell by targeting 1600 GBp.
- Flutter: Jefferies remains for purchase with a target reduced from 19,300 to 16,500 GBp.
- Holcim: DZ Bank is still buying with an objective raised from 58 to 60 CHF.
- Neoen: AlphaValue remains for sale with a raised target of 27.11 to 28.60 EUR.
- Publicis: Berenberg is still buying with a target raised from 65 to 68 EUR.
- Royal DSM: Bernstein goes from underperformance to market performance, targeting 188 EUR.
- Shop Apotheke: Berenberg remains for purchase with a target reduced from 210 to 175 EUR.
- STMicroelectronics: CFRA moves from buy to hold targeting EUR 46.
- Telekom Austria: Jefferies is still buying with a target raised from 8.49 to 8.82 EUR.
- Tryg: HSBC switches from buy to hold targeting 175 DKK.
- Ubisoft: Berenberg remains to be retained with a target reduced from 48 to 44 EUR.
Important (and less important) announcements
- Carrefour signs a partnership in Greece and extends its partnership with Blackhawk Network for gift cards.
- Eurazeo is investing $ 75 million in the medical clothing brand Jaanuu.
- OVH confirms its annual objectives on the sidelines of the publication of its fiscal Q1.
- Virbac transforms its Carros site.
- Gaztransport & Technigaz receives an order from a Korean shipyard.
- The Société de la Tour Eiffel sells the 7 Collines shopping center in Nîmes.
- The request for postponement of the general assembly of SMCP rejected by the court.
- Inertam (Europlasma) confirms its objectives but advances its scheduled maintenance, due to soaring energy prices.
- Groupe Parot finalizes the sale of the VP division in Ile de France.
- Eurobio launches a self-test to detect HIV infections.
- Miliboo has published its accounts.
In the world
Important announcements (and others)
- The Boeing Company receives 535 net orders and delivers 340 aircraft.
- Philips Q4 revenue is lower than expected.
- Just Eat Takeaway reports weaker than expected order intake in Q4.
- FTC cleared to continue antitrust offensive against Meta Platforms.
- CNOOC raises its production target for 2022 and forecasts peak oil in 2030.
- Exxon Mobil Launches Sale of Its Ohio Shale Gas Properties.
- UniCredit is among creditors interested in Russian bank Otkritie, which is opening its books to suitors.
- Citigroup to pull out of retail banking in Mexico.
- Sony is facing the PlayStation 5 shortage by making more PS4 consoles.
- Pierer Mobility raises its forecasts for the 2021 financial year.
- Swisscom is leaving France by selling the Local.Fr directory service to a consortium.
- Corticeira Amorim buys 50% of SACI’s shares for $ 55 million.
- Main results publications : Tata Consultancy, Infosys, Wipro, Lennar, JD Sports Fashion, Just Eat Takeaway, OVH, DFDS…