The manufacturing and services ISMs, as well as job creations, disappoint in April. In the euro zone, GDP growth in the first quarter pleasantly surprised.
Economy
The statistics published in the United States were disappointing. The manufacturing ISM fell more than expected in April, from 50.3 to 49.2. Even more disappointing, his services counterpart joined him below the threshold of 50, going from 51.4 to 49.4 when an improvement was expected. Likewise, the American economy created fewer jobs than expected in April (175,000 vs. 240,000 expected). In the euro zone, GDP growth in Q1 pleasantly surprised (+0.3% q/q vs. +0.1% q/q expected), general inflation is in line with expectations in April (+2. 4% y/y) even if underlying inflation (excluding energy and food) slows (from +2.9% to +2.7% y/y) a little slower than expected (+2.6 % a/a). In China, the manufacturing PMI held up slightly better than expected in April (down from 50.8 to 50.4 vs. 50.3 expected), but not that of services (from 53 to 51.2 vs. 52.3 expected) .
Planetary boundaries
According to an article by Stanford University professor Mark Jacobson for Scientific American, California (equivalent to the world’s fifth-largest economy) experienced, over a 47-day period through April 23, 39 days in which more than 100% of electricity demand was covered by renewable sources: hydraulic, solar, wind and associated storage systems.
Obligations
In the US, the Fed paused for the ninth consecutive month by maintaining its rates at 5.25%-5.50%. During his speech, J. Powell indicated that further rate hikes were unlikely, partly invalidating market expectations. This announcement as well as several disappointing economic data, particularly on employment, led to a sharp drop in US rates (2Y -18bp/10Y -16bp) and this downward trend should continue until the next inflation figure (May 15). ). On credit, HY spreads continued to tighten (EU -18bp/US -13bp).
Trader sentiment
Sotck exchange
Bright weekend on Wall Street thanks in particular to J.Powell, employment and Apple. On the macro front, we will have the BOE meeting (no change expected), University of Michigan sentiment in the US, PPI and retail sales in the Eurozone. On the corporate side, the flow of results is drying up, but we will still have Disney, BP, UBS. The markets are once again “risk on”.
Currencies
The US dollar is under strong pressure: between the Fed ruling out a rate hike this year, the BOJ’s interventions and disappointing US employment figures, the greenback has weakened against the CHF by $/CHF 0.9220 to 0.9053 and against € from €/$ 1.0650 to 1.0768. We anticipate the following ranges: €/$ 1.0650-1.0885, $/CHF 0.8990-0.9224. The CHF strengthens to €/CHF 0.9750, higher. 0.9676 res. 0.9880. The £ consolidates at £/$ 1.2568, sup. 1.2466 res. 1.2709. Gold is trading at $2,315/oz, sup. 2265 res. 2417.
Markets
A less restrictive Fed than the market feared and disappointments on the economic front pushed 10-year sovereign rates down (USD: -16bp; EUR: -8bp). Equities are moving in a dispersed order (US: +0.6%; Europe: -0.5%; emerging countries: +1.9%). The dollar (dollar index: -0.9%) is suffering from the greater decline in American rates. Gold did not benefit from this (-1.7%), penalized by hopes of a truce in the Middle East which also caused oil prices to fall (-6.8%). To be monitored this week: household confidence (University of Michigan), in the United States; Sentix investor confidence index, producer price index and retail sales in the euro area; foreign exchange reserves, trade balance and new credits in China.
Swiss market
To be monitored this week: March accommodation statistics (OFS), economic survey (KOF), April unemployment (Seco) and currency reserves at the end of April (BNS). The following companies will publish figures: Oerlikon, PSP Swiss Property, Adecco, UBS, Geberit, Sandoz, Landis+Gyr and Montana Aerospace.
Actions
ANGLO AMERICAN PLC (Satellites): according to Reuters, Glencore is evaluating the possibility of making an offer for Anglo American. Note that Glencore and Rio Tinto are identified by the market as potential buyers for a counter-offer, with a strong strategic rationale.
APPLE (Core Holdings) announces $110 billion stock buyback as it reports disappointing quarterly sales. The group could create a new iPhone sales cycle in 2025 with the integration of new AI functionalities (first information expected at WWDC in June 2024).
BYD (Satellites): the Chinese company, world leader in NEVs (New Energy Vehicles) sold 313,245 vehicles in April (+50% y/y) and is continuing its international development with the launch of the brand in Colombia and Chile.
DISNEY (Core Holdings) will release its Q2-FY2024 on May 7, ahead of the opening. We still expect a positive trajectory for the group’s margins (the “Direct to consumer” segment should achieve operational profitability in Q4-FY2024).
EPIROC (Core Holdings) has completed the acquisition of Weco Proprietary Limited, a South African manufacturer of drilling equipment, employing c.80 people for approximately SEK 90 million in turnover.
Chart of the day
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