Indices already back on top

May 10 could thus mark the sixth consecutive day of increase in most equity markets in Europe. That said, May 10 is above all a somewhat mythical date, even if those under 20, or even 30, or even older, have forgotten it. It’s 43^e anniversary of Uncle’s election. The children who were born at the beginning of February 1982 may have had left-wing parents (I looked for a song about May 10 to brighten your morning, but I only remember this one).

But let’s chase away this nostalgic impulse to return to base considerations. The stock market indices are approaching their records again, after having digested the small air gap of the month of April. It must be said that the great fear of the American market over the disappearance of any prospect of a reduction in key rates this year has evaporated with the accumulation of weak macroeconomic statistics. If I count since the beginning of the month, more than half of the indicators considered major published in the United States have disappointed. The ISM’s two gauges of the dynamics of economic activity, those of industry and those of services, entered the contraction zone in April. The three components of April employment (hourly wage, unemployment rate and change in the number of jobs) disappointed. Yesterday, weekly unemployment claims increased. This afternoon, we will have to pay close attention to the preliminary figures from the consumer confidence index from the University of Michigan. The sacrosanct American consumer still holds the house. If it is caught up in the gloom, the economic outlook risks darkening… which would not necessarily be a bad thing in the mind of Wall Street. Too many negative indicators = the Fed will abandon its firm stance = key rates could fall = money will become cheaper over a predictable time horizon. It should nevertheless be noted that the divinatory reading of data remains a horribly imperfect science, since certain serious indicators give divergent projections. Thus, the Atlanta Fed’s real-time GDP calculation model gives a growth projection of 4.2% in the second quarter of 2024 in the United States at an annualized rate, accelerating compared to estimates from the previous week.

But in the short term, the market has returned to the mood “anything that does not push the Fed to fear a resumption of inflation is good for stocks”. The three Wall Street indices closed in the green, with a solid performance from the Dow Jones, which continued its rise of 0.85% by once again approaching the symbolic mark of 40,000 points, never crossed to date.

In Europe, the summits are also getting closer. The indices almost all ended with vigorous gains yesterday, with one exception which I will mention shortly afterwards. The Bank of England’s relatively calm comments on price developments reinforced the market’s prognosis for a European Central Bank rate cut in June. The monetary policy decision meeting is set for June 6. Put another way, there could be monetary easing from the ECB in less than a month. Yesterday, the European ugly duckling was called the Bel20, with a fall of 0.75% at the close, going against the trend of the other indices. It suffered the repercussions of the drop in its two largest weightings, UCB (-2%) but especially ArgenX (-5%). The biotech fell after a publication of results rather in line, despite higher than expected costs, which did not overly frighten analysts.

Westerners have a hard time positioning themselves vis-à-vis China. As Xi Jinping visited France, Serbia and Hungary this week, Rishi Sunak is apparently bombarded with demands from HSBC Holdings and Standard Chartered to soften the government line towards Beijing. Meanwhile, the White House is reportedly preparing to strike a major blow against Chinese imports. According to corroborating sources (in journalism, corroborating sources means that the leak was carefully orchestrated), Joe Biden will announce next week new customs duties hitting so-called “strategic” sectors, in particular electric vehicles, semiconductors and photovoltaic equipment. Earlier in the year, Washington launched investigations into dumping in other sectors, such as shipbuilding or logistics. This has not stopped the American president from repeatedly asserting that he does not want a trade war with China. The lying poker therefore continues, especially as politics creates more and more interference as the American presidential election in November draws closer.

France organizes its 7^e “Choose France” investment summit, with expected announcements. Last year, 28 projects were announced, for €13 billion.

The week ended in the green in Japan, where the Nikkei 225 gained 0.4%. There is a strong contrast between Hong Kong and mainland China. The first gained 1.9%, boosted by rumors of tax exemption on dividends for individuals investing within a certain framework, while the second lost 0.2% due to threats of strengthening customs tariffs in the United States. . South Korea, India, Taiwan and Australia finished with a positive final weekly session. European stock markets are (still) expected to rise this morning.

The CAC40 starts the session up 0.5% to 8,234 points. The SMI rose 0.5% to 11,666 points. The Bel20 rebounded by 0.6% to 4009 points.

Today’s economic highlights

Monthly GDP data in the United Kingdom will be published at 8:00 a.m., before the University of Michigan consumer confidence index in the United States at 4:00 p.m. The whole agenda here.

The euro rises to 1.078 USD. An ounce of gold rebounds to 2,351 USD. Oil too, with North Sea Brent at 84.33 USD per barrel and American light WTI crude at 79.46 USD. The yield on US debt over 10 years drops to 4.46%. Bitcoin is trading at $62,900.

The main changes in recommendations

• Ahold Delhaize: AlphaValue/Baader Europe maintains its accumulate recommendation with a price target raised from 34.10 to 34.40 EUR.
• Amundi: Jefferies remains a buy with a price target raised from 71 to 80 EUR.
• Anheuser-Busch Inbev: Morgan Stanley maintains its overweight recommendation and raises the price target from 63.50 to 65 EUR. TD Cowen maintains its buy recommendation with a price target raised from 60 to 63 EUR.
• Antin Infrastructure Partners: Jefferies remains a buy with a price target reduced from 19 to 18 EUR.
• Aperam: AlphaValue/Baader Europe maintains its accumulate recommendation with a price target reduced from 33.50 to 29 EUR.
• ArgenX: Goldman Sachs maintains its buy recommendation and raises the price target from 438 to 449 EUR.
• Axa: BNP Paribas Exane maintains its outperformance recommendation with a price target reduced from 38.50 to 38 EUR.
• Castellum: Barclays downgrades from overweight to underweight with a price target reduced from 135 SEK to 110 SEK.
• Deutsche Pfandbriefbank: Citi goes from sell to neutral with a price target raised from 3.60 EUR to 5 EUR.
• DWS Group: Jefferies goes from buy to hold with a price target of 41 EUR.
• Equinor: Zacks goes from underperform to neutral with a price target raised from 23 to 30 USD.
• Fluidra: JP Morgan goes from neutral to overweight with a price target raised from 22 to 24 EUR.
• Formycon: RBC Capital starts monitoring for outperformance with a price target of 63 EUR.
• Icade: Goldman Sachs maintains its neutral recommendation with a price target raised from 27.60 to 27.70 EUR.
• KBC Group: Barclays maintains its market weighting recommendation with a price target raised from 63 to 67 EUR.
• Legrand: Citi goes from selling to buying with a price target raised from 85 EUR to 125 EUR.
• Partners Group: Jefferies remains to be retained with a price target raised from 1050 to 1170 CHF.
• Schneider Electric: Citigroup remains neutral (maintained) with a price target raised from 210 to 235 EUR.
• Teleperformance: Goldman Sachs maintains its neutral recommendation with a price target raised from 114 to 130 EUR.

In France

Important (and not so important) announcements

• Sanofi has entered into a licensing agreement with Novavax to sell a standalone COVID-19 vaccine and develop new combination influenza-COVID-19 vaccines.
• Moody’s has upgraded the credit outlook of Renault’s Ba1 rating from “stable” to “positive”.
• The main publications of the day: Viel… The rest here.

In the big world

Company results (comments are given directly and do not prejudge the evolution of securities, except for post-session exchanges in the United States, which normally reflect the trend well)

• Akamai falls 11% post-closing after its Q1.
• Enel increases Q1 profits thanks to strong renewable energy production.
• Honda multiplies its operating profit sixfold in the fourth quarter.
• International Consolidated Airlines exceeds expectations in Q1.
• Mediobanca pays an interim dividend of €421 million after better than expected results.
• Pirelli confirms its forecast after first quarter operating profit beat estimates.
• Salvatore Ferragamo shows a 17% drop in revenues in Q1.

Important (and not so important) announcements

From Europe

From the Americas

• T-Mobile US and Verizon Communications are negotiating the acquisition of the assets of US Cellular, one of the last major American regional mobile operators.
• OpenAI plans to announce a Google Search competitor on Monday, according to Reuters.
• SEC Investigating Boeing’s Statements About Its Safety Practices, Bloomberg Reports
• Calpers plans to vote against re-election of Exxon Mobil CEO as board chairman, FT reports
• Meta has just had seven consecutive sessions of increase, a first in six months.
• Ford plans to offer gasoline and hybrid vehicles in Europe beyond 2030.
• Apple will use its own chips to strengthen its AI capabilities, according to Bloomberg. Furthermore, the group apologizes for the poorly received advertising of the iPad Pro.
• The main publications of the day : Enbridge, Suzano…

From Asia Pacific and beyond

The rest of the global publications calendar here.

Readings