scholarship

it goes away and it comes again



Interventions by central bankers on the need for monetary tightening to continue have raised some concerns this week, leading to a patchy shutdown of financial centers. Volatility could resurface at any time as the specter of a global recession lingers and financial markets have made great strides in recent months.

Weekly variations*
Tops/Flops of the week

tops

Tencent (+35%): Like other Chinese tech stocks, the group benefited from a strong buying trend after recent Hong Kong lows. Alibaba, Pinduoduo and Sea Limited also benefited from the movement.

somfy (+22%): The Despature family offers the minority shareholders of the Haute-Savoie company a way out in the form of a takeover bid at €143. The stock has hovered slightly above this level since the announcement, a sign that the market is asking a bit more for a rating exit.

teleperformance (+19%): After the slump following the revelations about working conditions in Colombia, the action recovered after some initial hiccups thanks to fairly well-executed crisis management.

BAE systems (+9%): The group reiterated its annual forecasts in a solid context for companies in the defense sector. The Brit is looking for takeovers.

Infineon (+9%): The German semiconductor specialist has revised its long-term forecasts upwards and detailed its investment plans. Investors were reassured by his confidence in the future.

flops

Local (-53%): Lightning fell on the US-listed Uruguayan company. Noted short seller Muddy Waters has published a study finding that fintech has fraudulent characteristics.

Aston-Martin (-21%): Research firm Jefferies believes that despite the recent fundraising, new money will probably still need to be found in 2024 to get the company back on track. This potential source of dilution doesn’t sit well with the market.

Zoominfo Technologies (-20%): The stock fell after cautious comments from management during the technology conference organized by RBC Capital Markets.

Eutelsat (-18%): Investors remain cautious about the merger with OneWeb, whose definitive agreement was signed this week.

coin base (-15%): The cryptocurrency trading platform is hit by the sectoral shock wave caused by the bankruptcy of FTX.



Nexi (-13%): The Italian company was pressured on the stock market by the placement of 5.1% of the capital by its shareholder Intesa Sanpaolo, which sealed the exit from the round.

Mati Chart
raw material

energy : Oil prices lost ground this week. The rise in geopolitical tensions in Ukraine, which usually coincide with a rise in the price of kegs, was short-lived in that the United States was quick to dismiss the thesis of Russian bombing beyond the Ukrainian border into Polish territory. Prices were therefore further impacted by statements from OPEC, which again lowered its oil demand forecasts due to the slow reopening of China, still penalized by its zero-Covid policy. The cartel’s caution, which paints a bleak picture of the global economy, has therefore weighed on traders’ sentiment. A barrel of Brent and WTI are trading at $86 and $79, respectively. In Europe, the drop in temperature marks the beginning of the heating season. However, this is not enough to observe pressure on natural gas prices as European storage facilities are practically full. The Rotterdam TTF, the benchmark for gas prices in Europe, is trading around EUR 110/MWh.

metals : Base metals prices are taking a breather after the big rally that started earlier this month. All eyes are on China and its new metal demand stimulus measures. Nickel bounced mid-week and neared $30,000. One of the largest deposits, located in New Caledonia and owned by Trafigura, had to reduce production after heavy rains caused a tailings dam to leak. On the LME, a tonne of nickel is now bought for around $26,000 versus $8,150 for copper. In precious metals, the barbaric relic is also marking a break at $1760.

agricultural products : On the soft commodities side, wheat and corn prices fell to 800 and 660 cents a bushel respectively in Chicago this week. Russia has agreed to extend Ukraine’s grain deal by another four months.

Mati Chart
macroeconomics

mood : Does anyone understand something? Investors believed that the US Federal Reserve would welcome the first signs of easing on the inflation front. But the Fed was not born out of the blue, preferring to make sure everything is under control before comforting financial markets. Its members have therefore been working all week to play the spoilsport, just to make it clear that the return to more accommodative policies is not for now. The contradictory signals are multiplying: the labor market and retail sales are defying the economic slowdown in the USA. Confidence in German investors is robust despite the energy crisis…

rate : The yield curve is still inverted in the United States, a sign that the market is anticipating a recession, but that’s nothing new. What has changed a bit is that the 10-year yield has held gains at around 3.78% after its sharp decline the previous week. If our reading is correct, investors believe the Fed is nearing a turning point, despite its recent warnings. At the same time, the 10-year Bund yield fell to just under 2%, while the French OAT rose to 2.46%.

currencies : After its recent sharp decline, the dollar seems to have found a support zone. Specifically against the Euro at $1.0337. Meanwhile, the British pound has improved its positions. The cable is at $1.1895. The euro was also able to make up some ground against the Swiss franc at CHF 0.9863.

Cryptocurrencies: After suffering a -22% decline last week, Bitcoin is stabilizing around $16,500 at the time of writing this week. The drop in FTX over the past week continues to worry economic players exposed to the cryptocurrency market, as evidenced by liquidity withdrawals from exchanges. In addition, the domino effect caused by the collapse of FTX continues to spread, with international players, including in France, showing clear signs of fever. This mainly manifests itself in a worrying suspension of withdrawals. Bitcoin fans will therefore have to patiently strive before the sky clears over the cryptosphere.

Calendar : Financiers can take the temperature of major economies on Wednesday 23rd, the date of the release of November PMI indicators for the month of manufacturing and services. On the same day you will see US durable goods orders and minutes from the last Fed meeting. Thursday 24th, while Americans celebrate Thanksgiving, European markets discover the Ifo index on the business climate in Germany.

price chart
it goes away and it comes back

This week, after a nice rally last week, the market has fresh doubts about central bank policy. Have we already passed the peak of inflation? Central banks may therefore consider slowing the rise in their key interest rates. That’s what the market seems to have played last week. But let’s not forget that the US 2-10 year interest rate range is in free fall and negative territory. Historically, this scenario is always followed by a recession. But for how long and to what extent? The duration of this spread in negative territory is usually a good indicator of the depth of the recession to follow. We carefully keep this data. However, investors are still hoping for a bullish rally towards the end of the year, which is a bit of planning for the country, especially after the strong recovery we have witnessed in recent weeks. What now?

article of the week
Lithium: The sp bubble
Lithium: The White Gold Bubble?
A Booming Market Lithium is the third smallest atom on the periodic table of elements…. Read more
Argenx: Star in the production of antibodies
Argenx: Star in the production of therapeutic antibodies
The history between European biotechnology and investors is a turbulent one. Let’s say it started late that it… Read more
This trend that has been going on for... 700 years!
This trend that has been going on for… 700 years!
A 700 year old trend? And yes, it is possible, and at one of the oldest courses in finance:… Read More
*The weekly fluctuations of the indices and stocks displayed in the dashboard refer to the period from Monday, when the respective markets open, to Friday, when this newsletter is sent out.
The weekly fluctuations in commodities, precious metals and currencies shown in the dashboard relate to a period of 7 rolling days from Friday to Friday up to the time this newsletter was sent. These assets continue to trade over the weekend.

Zonebourse.com 2022

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button