Equity markets decided to play this patchwork yesterday, at the end of a session that did not provide much information to investors in search of visibility. France and Belgium dropped some points while Germany, Italy and Switzerland gained some points. London rests to bury the Queen of England, whose absence has sparked a wave of emotion even in my municipal council, where debate raged last night about the flag at half-mast on the pediment of the town hall. Rebellious Albion, he who soaped the imperial table for us and who removed Joan of Arc. That topic also seems controversial in the United States, because the war of independence was not fought against the Zapotecs, as far as I know. Beyond the symbol of the monarchy, one can only rejoice that a transnational event still evokes emotion.
But back to our financial sheep. In the United States, indices ended in the green. The gains were about 0.7% for the S&P500, the Dow Jones and the Nasdaq, helped by a buying trend in large stocks such as Apple or Microsoft. The market is still waiting for the decision that the central bank of America should give tomorrow its rates. Futures contracts indicate that the most likely scenario is a 75 basis point increase, which would take the main US policy rate from the “2.25 to 2.50%” range to “3 to 3 , 25%”. This level is the highest reached since the financial crisis of 2008.
But surely you’re beginning to know the song: more than the decision itself, it’s the level that rates are likely to reach at the peak of the recovery cycle that matters to financiers. That’s what they’ll be looking to find out in Jerome Powell’s decision presentation speech tomorrow night. Equity markets can relax if this bold Jay suggests that the fight against inflation is on. Or be sad if he dons his Paul Volcker disguise and suggests it’s too long, explained “I have no idea when all this nonsense will stop“.
Unless it’s a bit wobbly in the middle, which will contribute to the financiers to keep pedaling the fondue, as we say at home (it’s a lie, no one says that because a fondue is not harmful). Ah, I forgot another assumption, which is the great possibility of the week: the hog guard directly raises its rates by 100 basis points (note: futures contract only to provide this situation in a 18 % probability of date Tuesday morning). If that’s the case, there’s likely to be a significant increase in volatility tomorrow night, as markets don’t really like surprises. But even with this assumption, this is the way in which Jerome Powell will argue the decision to make the trend.
The macroeconomic news is pretty bad right now. Oil seems to have calmed down, while the euro-dollar pair continues to be close to parity. On the statistical side, the construction numbers of the United States in August are scheduled for 2:30 pm The big ball of central banks started today with the Swedish Riksbank and therefore continues tomorrow with the Bank of Brazil and the Fed. It will continue on Thursday with the Bank of Japan, the Swiss National Bank and particularly the Bank of England. On the part of the company, the main information of the evening was the decline in forecasts of Ford Motor. The automaker was hit by additional supply costs estimated at $1 billion and by a shortage of components that prevented it from completing production vehicles.
In the financial markets, it’s a panty party this morning. No, actually: apparently the slip made its first appearance on September 20, 1913 in L’Illustration magazine, according to a dubious source. In any case, investors look upbeat in Asia Pacific, with Tokyo coming off a long weekend with a gain of 0.4%, while Hong Kong and Sydney recovered by gaining more than 1%. . The main indicators in the west are relatively well anchored in the green. Investors remain optimistic that they are likely to bet on the power of monetary decisions to create strong inflection points. This does not prevent some changes in the nervousness according to rumors and comments in the market. The CAC40 started the session by 0.43% to 6087 points.
Economic highlights of the day
Focus on US real estate with housing starts and building permits in August. The full macro diary here.
The euro rose to 1.0029 USD. The ounce of gold recovered slightly to 1676 USD. Oil was not far from Friday’s levels, with North Sea Brent at $92.05 a barrel and US WTI light crude at $85.32. The yield on US 10-year debt gained 2 points to 3.47%. Bitcoin is trading at around $19,300.
The main changes in the recommendations
- Adyen: HSBC from purchase to storage, referring to 1500 EUR.
- Aena: Barclays moved from online weight to underweight by targeting EUR 115.
- Aéroports de Paris: Barclays went from underweight to overweight online, targeting EUR 136.
- Coloplast: Jefferies from buy to hold targeting 880 DKK.
- Dufry: HSBC remains on the buy side with a target reduction from 47.50 to 44 CHF.
- EDP: Barclays moved from underweight to overweight by targeting EUR 5.90.
- Emmi: Vontobel remains on the buy side with a reduced target of CHF 1,100 to 1,000.
- Emova: Kepler Cheuvreux remains high with a target reduction from 2.40 to 2 EUR.
- Endesa: Barclays moved from underweight to overweight by targeting EUR 22.10.
- Euronext: Credit Suisse went from outperformance to neutral, targeting EUR 77.
- Flughafen Zürich: Barclays went from overweight to overweight online by targeting 170 CHF.
- Fraport: Barclays from online weight to overweight by targeting EUR 56.
- HelloFresh: DZ Bank remains conservative with a reduction target from 31 to 28 EUR.
- Helvetia: Berenberg remains on hold with a reduction target from 104 to 100 CHF.
- Medacta: UBS is still buy with a reduction target from 117 to 115 CHF.
- Ocado: HSBC from savings to reductions, targeting 575 GBp.
- Oxford Instruments: Jefferies remains on hold with a target reduced from 2320 to 2010 GBp.
- Pandora: Nordea from holding to sale targeting 300 DKK.
- United Internet: DZ Bank remains high with a reduction target from 35 to 30 EUR.
- Wizz Air: Oddo BHF from underperformance to neutral by targeting 2500 GBp.
Important (and not so important) notices
- Safran has signed two service contracts with Cathay Pacific for its Airbus fleet.
- La Française des Jeux has agreed to acquire a second online horse racing betting operator, Zeturf.
- JCDecaux controls the large format digital network operator in Chicago.
- The British CMA has opened an investigation into LeasePlan’s planned takeover of ALD.
- Wallix and Nozomi Networks sign a technology alliance to strengthen cybersecurity in the industry.
- Metalliance (Gaussin) sold 12 cars for the construction of the metro between Sydney and its airport.
- Global Bioenergies sells bio-isobutene to Repsol for testing in the production of fuel.
- Pharmasimple “formally denied being in a situation of insolvency or filing for bankruptcy”.
- Dolfines signed a new dilutive financing line with Negma.
- The operational phase of the cooperation between BARDA and Crossject started last July.
- Implanet has ended its partnership with Sanyou Medical.
- Hybrigenics trusts Inoviem Scientific to develop its molecule for the treatment of Crohn’s disease.
- GECI International is expanding into Israel and Brazil.
- Groupe Gorgé, ABC Arbitrage, Genoway, AST Groupe, Adocia and Streamwide published their accounts.
In the world
Important (and not so important) notices
- Ford warned of its Q3 results. The stock lost 4.4% during the session.
- Henkel raises organic growth outlook for 2022.
- ThyssenKrupp believes that market conditions do not allow for a rapid IPO of its hydrogen subsidiary Nucera.
- Moderna was among the other vaccine specialists to fall after Joe Biden declared the pandemic over.
- FDA approved Cobas (Roche) laboratory solutions.
- Bachem signed two new peptide supply contracts.
- Main publications of the day: Kingfisher, TUI AG, Formycon, Sthree… The full agenda here.