I sincerely tried to write something half-hearted without mentioning the term “central bank” this morning, but I had to face the facts: it was a miserable failure. Tell yourself that you still get away with titles like “Powell: this is not the Fed of underpants” or “Fed Up” (fed up in English).
To simplify the story, if you agree, use bunnies, because they are cuter. That’s why the assembly of rabbits hopes that the famous chief rabbit pulls his hat last night (in the world, rabbits don’t pull hats, they take things) a comment that will bring back the Bourse de la Garenne. . But the big chief rabbit explained to them that this is not the time because the price of carrots has not stabilized yet. To make matters worse, he even told them that they might have to accept suffering for longer than they expected. The assembly of rabbits was very disappointed to learn that it had to continue eating clover by the root and the Bourse de la Garenne continued to fall.
Without the rabbits and in short, it goes like this: the Fed has not surprisingly raised its rates by 75 basis points but Jerome Powell is a little more pessimistic than expected on the efforts to do even if he thinks that tight monetary policy is not. lead to an economy in the United States. Consequences ? First, the dollar continues to crush other currencies. Then, the cursor for the level of the expected ceiling rate at the top of the cycle went from 4.5 to 4.6% (against a range of 3 to 3.25% at the moment, taking into account yesterday’s increase). Finally, the yield on 10-year US debt was little changed, remaining at 3.54%, but that of 2-year debt rose to 4.11%. Translation? The bank knows that it needs to drain the liquidity further to restore the price trends within acceptable limits. And the equity markets don’t like it much because it pushes back the time when monetary policy will be more favorable to them again.
As a result, Wall Street lost more ground yesterday, with a decrease of 1.7% for the Dow Jones and the S&P500 and 1.8% for the Nasdaq. In Europe, the most cyclical indices such as the French CAC40 and the German DAX rose yesterday to close, unlike the more defensive ones such as the Swiss SMI. We can’t say that the Fed has changed much in its discourse, but investors have not benefited from the branch they had hoped to hold.
Changing the landscape for the focus of TotalEnergies, one of the only three French CAC40 stocks to post a positive performance in 2022 (along with Thales and Orange). The group’s CEO, Patrick Pouyanné, indicated yesterday that the mechanism for taxing the windfall profits of energy companies being considered in Europe will cost his group more than 1 billion euros, or at least prevent it from cashing them . At the same time, the rebate given by TotalEnergies to French motorists on pump prices has created a deficit of €171 million since its start on 1.er September (TotalEnergies lowers the price of a liter of fuel at its stations by EUR 0.20). But let’s look at the billion euros mentioned above. I enjoyed finding out what the equivalent of 1 billion euros is today in the world. Here are some equivalents:
- 0.4% of Elon Musk’s estimated net worth.
- The equivalent of the capitalization of the specialist in geolocation tool TomTom or the French cool logistician Stef.
- 18.4 tons of gold.
- 0.16% of France’s 2021 budget.
- 3.3% of the net profit after tax expected by analysts 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 in the red at the end of the course. The declines were greater than 1% in Australia, Korea and Hong Kong, and more measured in India and Japan. Japan, where the central bank is running counter to others as it keeps interest rates on the floor. It must be said that after trying in vain to create inflation for years, the increase in prices finally came in the form of an annual increase of 3%, higher than the target of 2% but clearly less than found elsewhere. in the world. The Bank of England, which has more thorny problems to deal with, is on deck at noon. In Europe, the opening of equity markets will be bearish, especially in markets that are largely out of step with the closing of Wall Street. The CAC40 lost 1.6% to 5933 points at the opening.
Economic highlights of the day
More central banks so far: Bank of Japan, then Swiss National Bank (9:30 am) and Bank of England (1:00 pm). The full macro diary here. The Bank of Japan is running counter to its counterparts by remaining ultra-accommodative, with rates on the floor.
The euro retreated to 0.982 USD. The ounce of gold fell below 1660 USD. Oil recovered slightly from its decline, with Brent from the North Sea at 90.22 USD a barrel and US light crude WTI at 83.29 USD. The yield on the 10-year US bond is as low as 3.55% and the 2-year yield is as high as 4.11%. Bitcoin is trading at around $18,700.
The main changes in the recommendations
- ABC Arbitrage: Kepler Cheuvreux remains high with a target reduction from 8.50 to 8 EUR.
- About You: Deutsche Bank from buy to target EUR 9.
- Accor: JP Morgan from neutral to underweight by targeting EUR 21.
- ArgenX: Bryan Garnier initiates buy monitoring by targeting EUR 440.
- Cegedim: Societe Generale from buy to hold, targeting EUR 21.30.
- Ceres Power: RBC started tracking the performance of the sector by targeting 600 GBp.
- Chargers: Berenberg remains on the buy side with a price target reduced from 31 to 16 EUR.
- Compass: AlphaValue moves from sell to stock with a target of 2054 GBp.
- Dianomi: Liberum remains high with target price reduced from 460 to 300 GBp.
- Enagas: Societe Generale from hold to buy, targeting EUR 18.50.
- FirstGroup: JP Morgan continues to track overweight by targeting 155 GBp.
- Fortum: Oddo BHF from neutral to outperform by targeting EUR 18.50.
- Glencore: JP Morgan remains overweight with a target price raised from 5,900 to 6,400 GBp.
- McPhy: RBC begins outperformance tracking.
- Moncler: Jefferies remains bullish with target price raised from 50 to 52 EUR.
- Nextedia: GreenSome Finance remains bullish with a target raised from 1.20 to 1.34 EUR.
- Orpea: AlphaValue from buy to decline, targeting EUR 13.
- Partners Group: Credit Suisse remains outperform with a target reduction from 1275 to 1175 CHF.
- Reworld: GreenSome Finance remains high with a target reduction from 11.35 to 11.21 EUR.
- Ubisoft: Stifel from purchase to storage, aiming for 35 EUR.
Important (and not so important) notices
- Veolia has announced an agreement to sell Vigie’s UK waste business to Suez, which is exercising its option to buy back the assets at Macquarie’s expense. The group also plans to make its services self-sufficient in energy in France.
- The British CMA gave the green light to the acquisition of GCP by Saint-Gobain.
- Vinci is committed to an energy efficiency approach.
- JCDecaux won a 10-year contract with ViaQuatro for the operation of advertising space on line 4 of the São Paulo metro.
- Nexans is connecting Orsted Eversource’s offshore wind project to supply electricity to Connecticut and Rhode Island.
- Franprix (Casino) and the Zouari family have extended their partnership.
- Deezer lost subscribers, but confirmed its revenue target for 2022.
- Metabolic Explorer has taken temporary measures to reduce its production in Amiens and reports that it has systems in place to cover its energy supply.
- Death of Pierre Guénant, the president of AdVini.
- Voltalia has launched the construction of 50.6 MW of solar capacity in Portugal.
- Inventiva and Sino Biopharm signed a license and collaboration agreement to develop and commercialize lanifibranor in China.
- Nanobiotix established 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.
- The FDA requested changes to DBV Technologies’ VITESSE clinical study with Viaskin Peanut in children 4-7 years of age with peanut allergy. This is bad news that will delay the process.
- Henkel and Prodways have collaborated to offer Loctite resins in ProMaker LD printers for the production of industrial parts.
- Europlasma drew a new installment of its convertible.
- Jacques Bogart and Slimane join forces for a first line of hair products.
- Hopium chose Normandy for its first industrial site.
- Global Bioenergies has concluded the Rewfuel program, which it calls a “success”.
- Biosynex acquires Italian Bigix Pharma.
- Lhyfe, Hexaom, Synergie, Graines Voltz, Hopscotch, Compagnie Lebon, Sensorion, Buy-Loer, Reworld, Infotel, Kalray, Guerbet, Bio-UV and Nextedia published their accounts.
In the world
Important (and not so important) notices
- Credit Suisse is considering splitting its investment bank into three, according to the FT.
- Novartis today presented its medium-term plan.
- Meta Platforms wants to cut costs by 10% in the coming months, according to the Wall Street Journal. In addition, the group was ordered to pay $174.5 million to Voxer for patent infringement.
- Holcim completes acquisition of Belgian Cantillana.
- JD Sports Fashion remains cautious after falling profits.
- DKSH acquires American Terra Firma.
- Cofinimmo will expand its healthcare real estate portfolio in Galicia and Tenerife.
- The Bank of Italy gave the green light to the acquisition of Atlanta by the Benetton family and the American fund Blackstone.
- Main publications of the day: CostCo, Accenture, Fedex, FactSet, JD Sports Fashion, Alten… The full agenda here.