Of inflation, banks and barriers

Are we at a tipping point with the US inflation figures for December which will be published this afternoon? It's not impossible, because it's been a long time since the financial markets found themselves facing two very distinct paths. On the one hand, a relatively benign economic environment made up of reduction in overheating prices, falling interest rates and euphoria linked to the rise of artificial intelligence and the return of Donald Trump. And on the other, an inflationary context which prevents rates from falling, a generalized trade war and rising geopolitical tensions.

As always, the reality will be less binary, but the recent multiplication of negative signals has increased the pessimists' rating, while making the next macro deadlines to come more risky.

This is therefore the case with this afternoon's publication of American inflation for the month of December. Economists on average expect annual inflation to accelerate, to 2.9% after 2.7% in November. inflation corewhich does not include the most volatile elements, should remain stable, but at a high level: 3.3%. But the birds of ill omen are not always right: yesterday, the producer price index in the United States in December came out a little weaker than expected, even if it remains high at 3.3%. Investors concluded that there had been no uncontrolled slide. It didn't trigger euphoria either: Wall Street attempted a vigorous rebound but struggled to go the distance, because technology stocks suffered and the health sector was crushed by the fall in 6.6% of its big star, Eli Lilly, guilty of having made little impression on the sales prospects of its anti-obesity treatment. In Europe, the indices rebounded slowly, penalized in particular by the Eli Lilly shock wave, which spread to Novo Nordisk, which remains the largest capitalization on the old continent despite its current serious fatigue.

Investors were hoping for a relatively calm transition at the start of 2025 until the inauguration of Donald Trump, but they must deal with this chopping inflation figure. This has not prevented a certain wait-and-see attitude since yesterday, which is reflected in the planplan bet on a strong dollar, a neutral level of risk and a bearish bias on US bonds. The president-elect's inauguration is scheduled for next Monday, January 20, with the crowd of his fans, hand-picked guests and the clan of techno-billionaires coming to rub his leg, all to the sound of YMCA, who lost in the battle his status as a gay title of the 70s. Donald Trump should arrive with a big package of measures that he hopes to be able to deploy as quickly as possible.

To wait until 2:30 p.m., the market will be able to count on the first burst of results on the 4th^e quarter 2024, provided by major American banks. JPMorgan Chase, Wells Fargo, Goldman Sachs, BlackRock, Citigroup and Bank of New York all publish between 12:30 p.m. and 2 p.m. The news is also dominated by new trade restrictions that are looming. Bloomberg revealed that the United States is pressuring South Korea and Taiwan to reduce chip exports from Samsung and TSMC to China. For its part, Europe plans to gradually ban purchases of Russian LNG and aluminum.

In Asia Pacific, the routes are hesitant this morning. The Japanese Nikkei 225 lost 0.25% and the Australian ASX 0.2%. The indices are rather stable in South Korea and Hong Kong. India manages to gain 0.3%. It is Taiwan which suffers the most, weighed down by its star TSMC after the rumor cited above. European leading indicators are slightly bullish.

Today's economic highlights

Inflation data will be available for the United Kingdom (8:00 a.m.), France (8:45 a.m.) and especially the United States (2:30 p.m.), where the market will also take note of the Empire State index and oil stocks. The whole agenda here.

The main changes in recommendations

• Adecco: JP Morgan maintains its recommendation to underweight with a price target reduced from 21.20 to 19.60 CHF.
• Air France-KLM: Barclays downgrades its market weighting to underweight with a price target reduced from 8.50 to 7 EUR.
• ArgenX: HC Wainwright & Co maintains its buy recommendation and raises the price target from 617 to 717 USD.
• Belimo: Morgan Stanley maintains its market weighting recommendation with a price target raised from 515 to 523 CHF.
• BioMérieux: Oddo BHF goes from neutral to outperformance by targeting EUR 132.
• Bufab: SEB Bank improves its recommendation from hold to buy with a price target raised from 410 SEK to 460 SEK.
• Bureau Veritas: JP Morgan maintains its neutral recommendation with a price target raised from 31.20 to 31.40 EUR.
• Cargotec: Inderes downgrades its recommendation from sell to light with a price target of 51 EUR.
• Deliveroo: BNP Paribas Exane moves from neutral to outperformance with a price target raised from 135 GBX to 180 GBX.
• Delivery Hero: BNP Paribas Exane downgrades from neutral to underperformance with a price target reduced from 25 EUR to 23 EUR.
• Edenred: JP Morgan maintains its recommendation to overweight with a price target reduced from 56 to 52 EUR.
• Eurofins: BioMérieux moves from buy to hold by targeting EUR 53.
• Geberit: Morgan Stanley maintains its recommendation to underweight with a reduced price target of 455 to 452 CHF.
• Gecina: Goldman Sachs maintains its buy recommendation with a price target raised from 123.40 to 123.70 EUR.
• HelloFresh: BNP Paribas Exane improves its recommendation from underperformance to neutral with a price target raised from 4 EUR to 12 EUR.
• JD Sports Fashion: Goldman Sachs maintains its buy recommendation and reduces the price target from 185 GBX to 165 GBX.
• JCDecaux: JP Morgan goes from underweight to neutral with a price target raised from 13 EUR to 17 EUR.
• Just Eat Takeaway: BNP Paribas Exane improves its recommendation from underperformance to neutral with a price target raised from 10 EUR to 14 EUR.
• L'Oréal: Jefferies remains neutral with a price target reduced from 400 to 360 EUR.
• La Française Des Jeux: HSBC downgrades from keep to lighten with a price target reduced from 36 EUR to 30.70 EUR.
• Michelin: Citigroup maintains its buy recommendation with a price target raised from 37 to 38 EUR.
• Orsted: Arctic Securities upgrades its recommendation from Hold to Buy with a price target reduced from DKK 420 to DKK 360.
• OVH Groupe: Goldman Sachs maintains its recommendation to sell with a price target raised from 8 EUR to 8.50 EUR.
• Partners Group: Citigroup maintains its buy recommendation with a price target reduced from 1480 to 1450 CHF. Goldman Sachs maintains its buy recommendation and reduces the price target from 1510 to 1450 CHF. Jefferies remains to be retained with a reduced price target of 1280 to 1270 CHF.
• SGS: JP Morgan maintains its recommendation to overweight with a price target raised from 100 to 101 CHF.
• Sika: JP Morgan maintains its recommendation to underweight with a price target reduced from 209 to 200 CHF.
• Ströer: JP Morgan goes from neutral to overweight with a price target raised from 57 to 66 EUR.
• Swiss Re: Goldman Sachs maintains its neutral recommendation with a price target raised from 136 to 139 CHF.
• Teleperformance: JP Morgan maintains its neutral recommendation with a price target raised from 90 to 92 EUR.
• Transgene: Oddo BHF maintains its outperformance recommendation with a price target reduced from 2.20 EUR to 1.40 EUR.
• UBS Group: Zacks maintains its neutral recommendation with a price target raised from USD 32 to USD 33.75.
• Vivendi: JP Morgan maintains its overweight recommendation with a price target reduced from 12.90 to 3 EUR.
• Watches Of Switzerland Group: Deutsche Bank downgrades its buy to hold advice with a price target raised from 490 GBX to 510 GBX.

In France

Important announcements (and less important… I should point out that the information is given immediately before the opening and does not prejudge the color of the shares during the session)

• Bureau Veritas and SGS confirm talks for a possible merger, after a rumor spread by Bloomberg.
• 92 Casino franchise convenience stores will come under the Carrefour brand.
• GTT receives an order for tank designs for 6 LNG carriers.
• Hoffmann Green Cement extends its licensing contract to the United States.
• Xilam Animation renews its partnership with Sony Pictures Networks India for the Oggy and the Cockroaches franchise.
• Abeo extends its partnership with FIBA ​​until 2028.
• Verimatrix lance DVB ReAccess, une solution CAS Retrofit over-the-air.
• Proxelia and Energisme will offer joint offers to optimize the energy management of businesses and communities.
• Valbiotis claims positive results in a phase II/III study in cholesterol.
• Drone Volt will refinance itself via a capital increase and a bond which could become convertible.
• The main publications of the day : Esker, Cibox, Implanet, Largo, Fermentalg… The rest here.

In the big world

Important (and not so important) announcements

D’Europe

• Assets managed by Partners Group increased by 7% in fiscal 2024.
• Pfizer to sell 700 million shares of Haleon in accelerated offering.
• Safilo and Under Armor renew global eyewear license until 2031.
• The German government's stake in Uniper is drawing early interest from companies such as Abu Dhabi's Taqa, Bloomberg reported.
• Swiss Steel continues to cut 130 jobs at Emmenbrücke.
• Shell's joint venture has decided to expand a Chinese petrochemical complex.
• Bossard sales declined in 2024.
• Flughafen Zürich records an increase in passenger traffic and turnover for the 2024 financial year.
• Eckert & Ziegler secures €10 million payment through licensing deal with Chinese joint venture.
• The main publications of the day : Rio Tinto, Experian, Bossard, Ashmore, Vistry, Currys, Hays…

From North America

• Boeing delivered 348 commercial aircraft in 2024, half as many as Airbus.
• Eli Lilly is suffering on the stock market due to slowing sales growth of its anti-obesity drug.
• Meta is cutting about 5% of its staff, targeting lower performers.
• Nvidia CEO Jensen Huang is heading to China despite US export restrictions.
• Canada authorizes Bunge-Viterra merger ($34 billion) subject to certain conditions.
• The FTC is set to sue Deere over its equipment repair practices, according to Bloomberg.
• Microsoft is ending hiring at its U.S. consulting unit to cut costs, according to CNBC.
• The main publications of the day : JPMorgan Chase, Wells Fargo, Goldman Sachs, BlackRock, Citigroup, Bank of New York…

From Asia Pacific and beyond

• The United States wants to put pressure on TSMC and Samsung to limit their shipments of chips to China.
• Nippon Steel wants to work with the Trump administration to reach an agreement on the purchase of United States Steel, its CEO told the WSJ.
• Saudi Aramco will increase its investments in lithium to diversify from oil, according to the FT.
• The main publications of the day : nothing…

The rest of the global publications calendar here.

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