There are two ways to analyze the new stock market crash yesterday. The bullish is seeing some easing of selling pressure, which has resulted in limited contractions. Finally limited compared to recent standards, as we will see that the declines are still substantial at times. The pessimist is content to take note of a new low, in particular a close at the lowest since the end of 2020 for the world’s most widely watched index, the US S&P500. This means that Wall Street has wiped out all of the gains accumulated between December 2020 and December 2021. Downside takes the elevator and up the ladder, our most experienced Zonebourse analyst would no doubt say, surely still asleep at this hour. The S&P500 lost 23% in 2022. The tech-weighted Nasdaq was down -31%. I remind you that the so-called growth stocks are more harshly attacked than the others during these phases, because the dynamic of the perpetual economic race that feeds them is broken. The European version of 2022 is not doing much better: -20% for the broad Stoxx Europe 600 index, -19% for the French CAC, -21% for the Swiss SMI and -23% for the German DAX.
Yesterday, the markets lost points again. Except in the UK, where British phlegm tends to turn a little crazy at regular intervals. The FTSE 100 rose 0.03% as the pound burned and the price of Gilts, Britain’s government bonds, plunged. Her Majesty’s 10-year yield rose to 4.24% (bond price and yield move in opposite directions). The fiscal measures announced by the Truss governments have raised many questions and protests in the financial markets. Smarties have noted that the British ads even overshadowed Giorgia Meloni’s rise to power in Italy. “Flies go to skinny horses,” says the proverb. Europe’s sick economy may no longer be what we think it is. Finally if we take into account that the United Kingdom is in Europe geographically if not politically. The panic over the pound was barely mitigated by its rebound yesterday.
A Reuters columnist noted overnight that this situation could become a headache for some gilt-rich Asian central banks. “Our currency, your problemparaphrasing Nixon Treasury Secretary John Connally’s quip to European finance ministers in 1971. It was obviously about the dollar, and it remains as relevant as ever to the dollar. of England to support its currency, although it must be admitted that the leadership taken by the institution in the aggressive rise of its reference rates has not had much impact so far.
When a central banker walks out the door, there is always one who walks in through the window, says another proverb. Or at least, we could think about creating it. Yesterday, it was the head of the ECB, Christine Lagarde, who occupied the media field recalling lots of tricks from central bankers. It basically revolves around “confidence, firmness, we know what we do, but it will burn“. This afternoon, Jerome Powell of the Federal Reserve will come through the window talking central bank stuff. It might sound like “confidence, firmness, we know what we do, but it will burnHe will speak at 1:30 p.m. during an event organized in Paris by the Banque de France, before a series of important indicators: durable goods orders for August (2:30 p.m.), followed at 4:00 p.m. by the figures for August New Real Estate Sales and the US Consumer Confidence Index for September, compiled by the Conference Board.
This morning, equity markets are trying to recover in Japan, Australia and mainland China. On the other hand, South Korea and Hong Kong continue to lose quite a bit of ground. European markets are showing signs of recovery. Leading indicators are moderately bullish, helped by more firmly anchored US green futures. Projections that are likely to vary with the return of nervousness and therefore volatility. The VIX index, which measures this, rose above 32 points yesterday, a level close to mid-June. The CAC40 gained 0.6% and returned to 5,800 points at the open.
The highlights of the economic day
A big banner from the US today: Durable Goods Orders (2:30 p.m.), FHFA Home Price Index (3:00 p.m.), Conference Board Consumer Confidence Index, China Manufacturing Index Richmond Fed and New Housing Figures (4:00 pm). All the macro diary here.
The euro is trading at $0.9642, slightly higher. The ounce of gold remains under pressure at 1631 USD. Oil too, with North Sea Brent at $84.56 a barrel and US WTI light crude at $77.18. The performance of the american debt at 10 years it continues to rise to 3.87%. The 5-year-old is at 4.13% and the 2-year-old at 4.30%. Bitcoin rallied to $20,000.
The main changes in the recommendations.
- 888: Jefferies remains long with a reduced price target of 370 GBp to 280 GBp.
- Adidas: Goldman Sachs goes from buy to neutral.
- Aurea: Portzamparc resumes monitoring to strengthen pointing to 8 EUR.
- Avantium: Berenberg remains the buy with a reduced price target of €6.60 to €4.40.
- Byggfakta: Jefferies remains long with a price target reduced from SEK 50 to SEK 45.
- Return Digital: Berenberg goes from buy to hold with the target of 80 GBp.
- HelloFresh: Bernstein is still on sale with a reduced target from 27 to 19 EUR.
- Hugo Boss: Deutsche Bank moves from buy to hold, targeting EUR58.
- Huhtamaki: Jefferies remains long with a reduced price target of €45 to €40.
- Inchcape: Berenberg starts a long trail by targeting 1035 GBp.
- Johnson Matthey: Berenberg remains long with a reduced price target of 2,550 GBp to 2,200 GBp.
- Kering: Barclays moves from overweight to online targeting EUR555.
- MCH: Research Partners goes from hold to buy with a target of CHF 7.
- QinetiQ: Jefferies remains long with a reduced price target of 411 GBp to 400 GBp.
- Quadient: Portzamparc remains long with a high target of 34 to 36 EUR.
- Rovi: Kepler Cheuvreux remains long with a high target of 87.60 to 88.30 EUR.
- SGS: RBC moves from outperforming sector to target CHF 2,350.
- SKF: Jefferies goes from retaining to underperforming by targeting 123 SEK.
- Snam: Citigroup moves from sell to neutral, targeting EUR 4.30.
- Solaria: Société Générale goes from holding to buying, with a target of 21 euros.
- Unicredit: JP Morgan moves from neutral to overweight, targeting EUR 15.
- WithSecure: Berenberg starts long trail targeting EUR2.60.
Important (and less important) announcements
- TotalEnergies joins forces with SARIA to develop sustainable aviation fuel production on the Grandpuits platform. In addition, the workers of the oil group today initiate a strike movement in France in support of salary demands.
- ArcelorMittal issues €600 million of 4.875% bonds maturing in 2026.
- Asda chooses Dassault Systèmes planning and optimization solutions to transform its transportation business.
- Two Crédit Agricole subsidiaries receive small fines for violations of US sanctions.
- Arkema is reviewing upwards its global capacity expansion for Pebax elastomers at its Serquigny plant.
- Electricité de France, in consortium with KEPCO and Kyushu Electric, finalizes the financing of the electricity transmission project in the United Arab Emirates. In addition, EDF signs an agreement with EPH to sell its stake in a power plant in the Netherlands.
- Fnac Darty selects SES-imagotag for the digitization of more than 200 stores in Europe.
- JCDecaux Portugal renews its collaboration with Sonae Sierra.
- Technicolor Creative Studios, a Technicolor spin-off, goes public on Euronext.
- Transgene celebrates an R&D day.
- CGG signs a multiclient license agreement with TotalEnergies for carbon dioxide storage.
- Leroy Merlin entrusts Voltalia with the construction of a solar power plant in Centre-Val de Loire.
- Servier lifts the exclusive worldwide licensing option on the Parkinson’s disease treatment program from Oncodesign Precision Medicine, a subsidiary of Oncodesign.
- Guerbet obtains financing of 1 million euros from the BIS.
- Quadient, Cabasse, Marie Brizard, FIPP, Precia and Roctool have published their accounts.
In the world
Important (and less important) announcements
- Sika will sell assets to avoid the wrath of antitrust authorities as part of the takeover of the MBCC group.
- Ford Motor on Monday asked for a new trial in the case in which it was ordered to pay $1.7 billion last month after a fatal accident involving one of its commercial vehicles.
- Biogen will pay 900 million to settle a bribery case.
- Biffa accepts an offer to buy ECP at 410 GBp per share in cash.
- Nexi expects to generate €2.8 billion in excess cash during 2023/2025.
- The CEO of Siemens Gamesa believes that it will restore the onshore wind branch in 2022.
- Generac Holdings enters the portable battery market.
- Georg Fischer confirms his goals for 2025.
- Stanley Black & Decker and TerraCycle are launching a free recycling program for appliances and tools.
- Main publications of the day: Ferguson, Jabil, United Utilities, Verbio, Danieli… All the agenda here.