Honestly, I tried to write something half-heartedly without mentioning the term “central bank” this morning, but I have to face the facts: It was a resounding failure. Tell yourself that titles like “Powell: Not the Fed in Underpants” or “Fed Up” have yet to escape your notice.
To simplify the story, if you allow me, I will use bunnies, because it is cuter. So the assembly of rabbits hoped that last night the great chief rabbit would pull out of his hat (in this world rabbits don’t pull out hats, they pull things out) a comment that would send the Bourse de la Garenne bouncing. But the big rabbit boss explained that no, it was not the time yet because the price of carrots has not yet stabilized. Worse still, he even told them that they will probably have to accept the suffering a little more than they expected. The rabbit assembly was very disappointed to learn that they would have to continue eating root clover and the Bourse de la Garenne continued to fall.
Without the rabbits and in a nutshell, it looks like this: The Fed, unsurprisingly, raised rates by 75 basis points, but Jerome Powell was a little more pessimistic than expected about the efforts to be made, even if he thinks the tight monetary policy will not. lead to a recession in the United States. Impact ? First, the dollar continued to crush other currencies. Then, the cursor for the level of the anticipated ceiling rate at the top of the cycle moved from 4.5 to 4.6% (vs. a range of 3 to 3.25% today, taking into account yesterday’s hike) . Finally, the 10-year US bond yield was little changed, holding around 3.54%, but the 2-year bond soared to 4.11%. Translation ? The Fed knows that it needs to further drain liquidity to bring price trends back within an acceptable bound. And the equity markets don’t like it too much because it delays the moment when monetary policy will be more favorable to them again.
As a result, Wall Street lost ground yesterday, with the Dow Jones and S&P500 falling 1.7% and the Nasdaq falling 1.8%. In Europe, the more cyclical indices such as the French CAC40 and the German DAX rose yesterday at the close, unlike the more defensive ones such as the Swiss SMI. We can’t say that the Fed has changed its tune much, but investors have not benefited from the branch they had hoped to cling to.
Change of scenery to focus on TotalEnergies, one of only three French CAC40 stocks to post a positive performance in 2022 (with Thales and Orange). The CEO of the group, Patrick Pouyanné, indicated yesterday that the mechanism to tax the extraordinary profits of the energy companies that are considered in Europe will cost his group more than 1,000 million euros, or at least will prevent him from collecting them. At the same time, the bonus granted by TotalEnergies to French motorists on prices at pumps has generated a deficit of 171 million euros since its entry into force on 1Ahem September (TotalEnergies lowers the price of a liter of fuel at its stations by 0.20 euros). But let’s take a look at the billions of euros mentioned above. I had fun looking for what corresponds to the 1 billion euros that there are currently in the world. Here are some equivalents:
- 0.4% of Elon Musk’s estimated fortune.
- The equivalent of the capitalization of the specialist in geolocation tools TomTom or the French logistics cold Stef.
- 18.4 tons of gold.
- 0.16% of France’s budget for 2021.
- 3.3% of the net profit after tax that analysts expect on average for TotalEnergies in 2022 (ie $29.55 billion).
If we go back to the stock markets in the early morning European time, the Asian markets are all moving towards the red at the end of the course. Declines are greater than 1% in Australia, Korea and Hong Kong, and more measured in India and Japan. Japan, where the central bank goes against the others as it has kept its rates on the floor. It must be said that after trying in vain to create inflation for years, the price rise has finally come in the form of an annual increase of 3%, certainly above the 2% target but still clearly below what is seen in other places. in the world. The Bank of England, which has much thornier problems to deal with, will be on deck at noon. In Europe, the opening of equity markets will be bearish, especially in markets that were significantly out of step with the Wall Street close. The CAC40 lost 1.6% to 5,933 points at the open.
The highlights of the economic day
Many central banks still today: the Bank of Japan, then the Swiss National Bank (9:30 am) and the Bank of England (1:00 pm). All the macro diary here. The Bank of Japan goes against its counterparts by remaining ultra accommodative, with rates on the floor.
The euro falls to 0.982 USD. The ounce of gold falls below 1660 USD. Oil is slightly recovering from its decline, with North Sea Brent at $90.22 a barrel and US WTI Light Crude at $83.29. The performance of the american debt at 10 years it varies little to 3.55% and that at 2 years it accelerates to 4.11%. Bitcoin is trading around $18,700.
The main changes in the recommendations.
- Arbitrage ABC: Kepler Cheuvreux remains long with a reduced target of 8.50 to 8 EUR.
- About you: Deutsche Bank moves from buy to hold targeting €9.
- Accor: JP Morgan moves from neutral to underweight targeting EUR 21.
- ArgenX – Bryan Garnier starts to monitor buying targeting EUR440.
- Cegedim: Société Générale goes from buying to staying, targeting EUR 21.30.
- Ceres Power: RBC starts tracking industry performance by targeting 600 GBp.
- Chargeurs: Berenberg remains on the buy side with a price target reduced from EUR31 to EUR16.
- Compass: AlphaValue changes from sell to hoard with a target of 2054 GBp.
- Dianomi: Liberum remains long with a reduced price target of 460 GBp to 300 GBp.
- Enagas: Société Générale goes from holding to buying, targeting 18.50 euros.
- FirstGroup: JP Morgan resumes overweight monitoring targeting 155 GBp.
- Fortum: Oddo BHF moves from neutral to outperformer targeting EUR18.50.
- Glencore: JP Morgan remains overweight with a high price target of 5,900 to 6,400 GBp.
- McPhy: RBC starts top performance tracking.
- Moncler: Jefferies remains long with a high price target of EUR50-52.
- Nextedia: GreenSome Finance remains long with a high target of EUR1.20 to EUR1.34.
- Orpea: AlphaValue goes from buy to short, targeting EUR13.
- Partners Group: Credit Suisse continues to outperform with a reduced target of CHF 1,275 to 1,175.
- Reworld: GreenSome Finance remains long with a reduced target of EUR11.35 to EUR11.21.
- Ubisoft: Stifel goes from buy to stay, targeting 35 EUR.
Important (and less important) announcements
- Veolia announces an agreement to sell Vigie’s UK waste business to Suez, which has exercised its option to repossess the assets at Macquarie’s expense. The group also plans to make its services self-sufficient in energy in France.
- The British CMA gives the green light to the takeover bid for GCP by Saint-Gobain.
- Vinci is committed to an approach of energy sobriety.
- JCDecaux wins a 10-year contract with ViaQuatro for the operation of advertising space on line 4 of the São Paulo subway.
- Nexans connects the Orsted Eversource offshore wind project to supply electricity to Connecticut and Rhode Island.
- Franprix (Casino) and the Zouari family extend their collaboration.
- Deezer loses subscribers, but confirms its revenue target for 2022.
- Metabolic Explorer is taking temporary measures to reduce its production in Amiens and reports that it has coverage systems for its energy supply.
- Death of Pierre Guénant, president of AdVini.
- Voltalia is starting the construction of 50.6 MW of solar capacity in Portugal.
- Inventiva and Sino Biopharm sign a license and collaboration agreement to develop and commercialize lanifibranor in China.
- Nanobiotix establishes the recommended dose for the registration study evaluating the combination of NBTXR3 + anti-pd-1 in patients with metastatic head and neck cancer resistant to immunotherapy.
- FDA Requests Changes to DBV Technologies VITESSE Clinical Study with Viaskin Peanut in Children 4-7 Years Old with Peanut Allergy. This is bad news that will delay the process.
- Henkel and Prodways collaborate to offer Loctite resins in ProMaker LD printers for the manufacture of industrial parts.
- Europlasma draws a new installment on its convertible.
- Jacques Bogart and Slimane join forces for a first range of hair products.
- Hopium chooses Normandy for its first industrial site.
- Global Bioenergies ends the Rewofuel program, which it describes as a “success”.
- Biosynex acquires the Italian Bigix Pharma.
- Lhyfe, Hexaom, Synergie, Graines Voltz, Hopscotch, Compagnie Lebon, Sensorion, Buy-Loer, Reworld, Infotel, Kalray, Guerbet, Bio-UV and Nextedia have published their accounts.
In the world
Important (and less important) announcements
- Credit Suisse is considering splitting its investment bank into three, according to the FT.
- Novartis today presents its medium-term plan.
- Meta Platforms wants to cut costs by 10% in the coming months, according to the Wall Street Journal. Additionally, the group was ordered to pay $174.5 million to Voxer for patent infringement.
- Holcim finalizes the acquisition of the Belgian company Cantillana.
- JD Sports Fashion remains cautious after falling profits.
- DKSH acquires the American company Terra Firma.
- Cofinimmo will expand its healthcare real estate portfolio in Galicia and Tenerife.
- The Bank of Italy has given the green light to the Atlanta takeover bid by the Benetton family and the US fund Blackstone.
- Main publications of the day: CostCo, Accenture, Fedex, FactSet, JD Sports Fashion, Alten… All the agenda here.