The crossover of stock market indices therefore continued yesterday, with a European rebound followed by a rather disjointed session in the United States. The Dow Jones was pulled higher by IBM’s 7.8% jump after its results and by the rise of its two heavyweights, UnitedHealth and The Home Depot. The oldest stock market index in the world is quite unique since the influence of the stocks that make it up is a function of their price, and not of their stock market weight. Thus the insurer UnitedHealth, whose action is worth 546 USD, has three times more influence than that of Apple, which quotes 167 USD, even though the capitalization of the apple brand is more than five times higher. This is a legacy of the past, whereas the so-called modern indices are calculated from the capitalization of the companies that make it up, more generally even from the floating capitalization, that is to say from the share of capital actually available at the sale. This is the case of the S&P500, which lost 0.06%, weighed down by Amazon (-2.6%), Meta Platforms (-7.8%) and Tesla (-5%), even if the results published by the automaker after the close sent the stock bouncing off-trail.
And then of course there’s Netflix’s -35% after the cold shower on the streaming service’s subscriber decline, which I was talking about yesterday. The title debacle swept away the group that is now seen as rival Walt Disney, whose stock fell 5%. Investors seem to be wondering if the sector is falling into line like a good old traditional television business, which makes them dream much less than the bluette of the almost virgin growth field. streaming that had fueled the Netflix craze for ten years. Even seasoned investors like famed financier Bill Ackman got caught: his Pershing Square fund, which had invested heavily in Netflix’s promise of a return to better fortunes earlier this year, yesterday sold its positions in urgency, like a common small carrier who has fallen in love with the latest fashionable biotech. With a capital loss estimated at $ 430 million, in an operation that will surely join those on Valeant or Herbalife among the pans that Ackman drags.
In Europe, the broad STOXX Europe 600 index, which works like the S&P500 on a free-float basis, rebounded yesterday, buoyed by the strong reception of results from Dutch semiconductor machinery giant ASML. The stock, the second most influential in the index behind Nestlé, gained 5.3% at the close. The good performance of cyclical stocks such as LVMH and L’Oréal also helped.
We remain in the world of corporate publications today in Western markets. After Carrefour or Tesla last night, it will be the turn of Nestlé, BHP Group, Danaher, Philip Morris or Kering to compete today. The Zonebourse agenda lists 16 companies worth more than $50 billion and 40 capitalizing between $10 and $50 billion. The reassuring quarterly numbers are undoubtedly a powerful driver for equity markets in recent days, all the more important as there aren’t many other bullish catalysts out there.
On the economic-political scale, the debate between Emmanuel Macron and Marine Le Pen in France did not allow the swordsmen to move the lines. In Eastern Europe, while Russia is testing a ballistic missile, fighting continues in Mariupol. The Beige Book published yesterday by the Fed did not reveal anything that we do not already know. The small outbreak of fever on US debt yields seems to have subsided and the cap of 3% in remuneration over ten years has not been crossed. There are nine trading sessions left before the US central bank draws its next rate hike, with an outcome less uncertain than a second round of the French presidential election: the CME’s FedWatch prediction tool gives 95.4% of probability of a rate hike of half a point.
This morning, the mood is chasing the rebound in Europe, with the latest wave of publications. Asia Pacific stocks are up, with the exception of China where more marked economic support measures were expected from Beijing amid caution over the measures taken to fight the coronavirus.
Economic highlights of the day
European inflation in March (11:00 am) will precede the Philly Fed index in April and the statistics for weekly jobless claims in the United States (2:30 pm). The whole macro diary here.
The euro and the dollar neutralize each other at 1.0827 USD. An ounce of gold trades at 1951 USD. Oil is not far from its prices the day before with Brent from the North Sea at 107.47 USD per barrel and American light crude WTI at 103.03 USD. The yield on the US 10-year debt fell again to 2.86%. Bitcoin is straddling 42,000 USD.
The main changes in recommendations
- Air Liquide: Stifel goes from holding to buying, targeting EUR 197.
- Aviva: Jefferies remains to be kept with a price target raised from 435 to 460 GBp.
- ASML: Credit Suisse remains outperforming with a target raised from 945 to 960 EUR.
- Danone: Credit Suisse remains neutral with a target raised from 54 to 56 EUR. Bernstein goes from outperformance to market performance by targeting EUR 56.
- Demant: Jefferies resumes long tracking, targeting 360 DKK.
- Deutsche Post: Berenberg remains long with a price target reduced from 67 to 64 EUR.
- Hornbach: Berenberg starts long tracking by targeting EUR 150.
- JCDecaux: JP Morgan remains neutral with a price target reduced from 27.50 to 22.70 EUR.
- Kuehne + Nagel: Berenberg remains long with a reduced price target of 350 to 340 CHF.
- L’Oréal: RBC remains neutral with a price target raised from 260 to 282 EUR.
- National Grid: Berenberg goes from buying to keeping, aiming for 1210 GBp.
- Piaggio: Berenberg starts the follow-up on the purchase by aiming at 3.40 EUR.
- Royal Vopak: Jefferies remains to be kept with a price target reduced from 35 to 32 EUR.
- Sonova: Jefferies takes over the follow-up to keep aiming for 400 CHF.
- ThyssenKrupp: Jefferies resumes long monitoring, targeting EUR 12.65.
- TotalEnergies: HSBC goes from holding to buying, aiming for 53 EUR.
In France
Company results
- Carrefour: quarterly revenues are in line with expectations and forecasts are confirmed.
- Edenred: revenues are up sharply in Q1. The objectives are confirmed.
- Eurofins: 2022 targets are raised after Q1.
- Getlink: turnover jumped 46% in Q1 over one year, with the resumption of cross-Channel exchanges.
- Rexel: the activity of 1er quarter was up 16% like-for-like. The objectives are reiterated.
- Sartorius Stedim Biotech: 2022 targets are confirmed after Q1 up 27.6% like-for-like.
Important (and less important) announcements
- Lactalis would eye all or part of Danone, according to La Lettre A.
- Engie can “do without Russian gas”, said its president in an interview with Le Figaro.
- Sodexo sold its Russian activities.
- OVH acquires Forepaas.
- Gaztransport & Technigaz obtains an order from Hyundai Samho Heavy Industries for the design of the tanks of two new LNG carriers.
- Esker invests in its American partner LSQ.
- Mexican operator Megacable chooses Verimatrix’s Streamkeeper and XTD solutions to strengthen its security.
- 2CRSi signs a distribution partnership with TD Synnex.
- Atari’s AGM validates the transfer on Euronext Growth.
- Kalray’s general meeting approves the acquisition of Arcapix Holdings.
- Medesis obtains a positive result on an animal model with NanoManganese for the optimization of radiotherapy in cancer treatment.
- Biosynex takes 23.3% Primadiag.
- Groupe Crit, Maurel, Voltalia, SergeFerrari, Cabasse, Mercialys, Grolleau, Altheora, Hitechpros, Groupe SFPI, Lisi, Invibes, Diagnostic Medical Systems, Foncière 7 Investissement, Visiativ, Drone Volt, Verallia have published their accounts.
In the world
Company results
- ABB: Q1 results are in line with expectations, while order intake is much higher.
- Nestlé: Q1 organic growth reached 7.6%, against 5.1% expected by the market.
- Tesla: the action recovers 5% out of session after the publication of the Q1 accounts.
- United Airlines: the title rebounded 7% outside sessions after its quarterly.
Important announcements (and others)
- Pershing Square, Bill Ackman’s fund, sells all of its Netflix shares with a loss of $430 million.
- The Boeing Company plans to resume deliveries of the 787 Dreamliner in the second half of the year, according to information from Reuters.
- Shopify would negotiate the takeover of Deliverr.
- CNOOC soars 20% for its listing debut in Shanghai.
- Calida sold Millet to refocus on lingerie.
- Mattel is releasing a Barbie with the image of Elizabeth II for the 70th anniversary of the Queen of England’s reign.
- Leclanché signs a contract with the German Olmatic.
- Main results publications: Nestlé, BHP Group, Danaher, Philip Morris, Kering, Investor AB, Anglo American, ABB, Sartorius Stedim Biotech, Antofagasta, Segro… The full agenda here.
Readings