The most important week of the year?

Four years ago to the day, I was sitting at the same desk, busy reading the American press to try to find out who the 46 was.^e president of the United States. The predicted blue wave had not happened at all and the media were even beginning to imagine that a second term for Donald Trump was looming. For those who read the column instead of listening to it, I will provide you with the link to the one from November 4, 2020 here. Ultimately, it was necessary to wait two days after the vote, which took place on November 3, for Joe Biden to emerge as the winner. And again, not as an official winner, since it was only during the following weekend that the electoral commission had dubbed the Democrat, whose victory was immediately contested by his opponent and his close guard, with the consequences that we know .

Four years later, Donald Trump, who is not the type to give up, is once again in the race for a second term. The vote takes place tomorrow, Tuesday, November 5, and no one knows who will win, or even if the two candidates will be decided on Wednesday.

Financial professionals see financial markets progressing regardless of the color of the White House, that is to say decorated with the blue of the Democrats or the red of the Republicans. But the driving forces could be very different in different market segments. Some examples? Green finance and renewable energies would take a big hit in the event of a Trump presidency. The Republican leader’s isolationist and punitive policy is likely to strengthen inflation, and therefore limit the Fed’s room for maneuver on rates. Remember this: overall, Wall Street’s preference is always for a presidency counterbalanced by at least one of the two chambers of Congress. Moreover, statistics prove it: the best performances of the stock markets occur when power is divided.

On Friday, stock markets rebounded after a purge in the United States on Thursday. The day of 1^is November was a public holiday in several countries but not a public holiday on the stock market. The CAC40 took the opportunity to recover by 0.8% and return to the 7,400 point mark. Despite everything, the Parisian index remains in the red in 2024, lagging behind its peers since the Chinese middle class is buying fewer Vuitton bags, which has sent the powerful luxury sector reeling (for this reason, read this paper not very reassuring from Bloomberg published this morning). The rest of the old continent is doing better, like the 2024 gains of around 15% posted by Frankfurt, Brussels, Madrid and Milan. For a reminder of what happened in the morning of Friday’s session, click here.

Information you need to know to start the week:

• The dollar has weakened in recent hours with the rise in Kamala Harris’s rating. The yield on the US 10-year bond jumped to 4.38%.
• The corporate earnings season in the United States is a little less favorable than average, after 70% of S&P500 companies published their figures.
• The prime minister and the Spanish royal couple were jeered and threatened during a visit to flood-stricken southern Spain.
• OPEC+ postponed its production increase by one month to the end of December. Black gold prices reacted weakly upward to the announcement.
• China calls on France to push EU towards deal in electric vehicle dispute. Furthermore, Beijing has slightly relaxed its stock market regulations on foreign investments, to attract more capital.
• The Fed will meet on November 7 and will likely decide to cut rates by a quarter point regardless of the outcome of the presidential vote. The Bank of Australia and the Bank of England will also deliver their verdicts on their respective rates this week.
• Berkshire Hathaway released its results over the weekend, revealing a bloated cash pile of $325 billion. Why is Warren Buffett’s investment vehicle so conservative? Some answers here with a paper from my colleague Tommy Douziech, whose passion for the guru of Omaha is legendary.
• The week will still be very busy with quarterly company results. Notably Vertex, Palantir, Qualcomm, ARM and Airbnb in the United States and Novo Nordisk, Unicredit, BMW, Zurich Insurance and Compagnie Financière Richemont in Europe.

In Asia Pacific, the Japanese market is closed for a public holiday. Tokyo will launch its new hours extended by half an hour tomorrow: the market will close in the future at 3:30 p.m. local time instead of 3:00 p.m. (7:30 a.m. Paris time instead of 7:00 a.m.). Chinese indices continue to rise, modestly for the Hang Seng (+0.1%) and more vigorously for the CSI300 (+0.8%). South Korea replicates the jump in the Nasdaq and gains 1.8%. The trend is positive in Australia (+0.5%) and Taiwan (+0.8%). Big air hole on the other hand in India with a rare plunge of 1.8% for the BSE100.

Today’s economic highlights

The day begins with the manufacturing PMIs of France (9:50 a.m.), Germany (9:55 a.m.) and the euro zone (10:00 a.m.). Later, in the United States, it’s time for orders for durable goods and industrial orders (4 p.m.). The whole agenda here.

The main changes in recommendations

• Ageas: JP Morgan goes from underweight to neutral with a price target raised from 42 to 55 EUR.
• ArgenX Se: Deutsche Bank maintains its recommendation to hold with a price target raised from 500 to 525 EUR. JP Morgan maintains its recommendation to overweight with a price target raised from 570 to 620 EUR.
• ASM International: JP Morgan maintains its overweight recommendation with a reduced price target of 806 to 716 EUR.
• Ayvens: Mediobanca maintains its outperformance recommendation with a price target reduced from 10.40 to 10 EUR.
• Bachem Holding: JP Morgan starts overweight monitoring with a price target of 86 CHF.
• Carl Zeiss Meditec: RBC Capital downgrades from outperformance to sector performance with a price target reduced from 85 EUR to 70 EUR.
• Erste Group Bank: Patria Finance AS moves from buying to accumulating with a price target raised from 46 to 58 EUR.
• Italgas: Morgan Stanley overweight from underweight with a price target raised from 5.10 to 5.60 EUR.
• Rémy Cointreau: Morgan Stanley maintains its recommendation to be underweight with a price target reduced from 70 to 53 EUR.
• Sandoz Group: Deutsche Bank maintains its recommendation to hold with a price target raised from 33 to 36 CHF.
• Sanofi: Guggenheim maintains its purchase recommendation and reduces the price target from 126 to 125 EUR.
• Schindler Holding: Goldman Sachs maintains its sell recommendation with a price target raised from 208 to 229 CHF.
• SIG Group: Citigroup maintains its buy recommendation with a price target reduced from 24.50 to 24 CHF.
• Standard Chartered: Goldman Sachs downgrades its buy recommendation to neutral with a price target of 937 GBX.
• Stellantis: Nomura maintains its purchase recommendation with a price target reduced from 21 to 17 EUR.
• STMicroelectronics: HSBC maintains its purchase recommendation with a reduced price target of 32 to 31 EUR. Morgan Stanley downgrades market weighting to underweight with a price target reduced from 35 EUR to 20 EUR.
• Technip Energies: Barclays maintains its recommendation to underweight and raises the price target from 26.50 to 28.50 EUR.
• TotalEnergies: Morgan Stanley maintains its overweight recommendation and reduces the price target from 70 to 64 EUR. TD Cowen maintains its recommendation to hold with a reduced price target of 67 to 66 EUR.
• Virbac: Stifel maintains its recommendation to hold with a reduced price target of 420 to 380 EUR.

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)

• Trouble at Schneider: Olivier Blum appointed general manager with immediate effect in place of Peter Herweck.
• Donald Trump will impose 100% customs duties on Stellantis in the event of relocation to Mexico.
• Bureau Veritas will buy the APP group in Asia Pacific.
• Air France-KLM anticipates an increase in taxes on plane tickets.
• The Finance Committee adopts an amendment to the NFP on a possible nationalization of Atos.
• OSE Immunotherapeutics obtains positive phase II results with its Anti-IL7R antibody Lusvertikimab for the treatment of ulcerative colitis.
• Séché brings a CVC subsidiary into the capital of its Eco subsidiary in Singapore.
• Financiere Moncey completes the merger-absorption of Compagnie des Tramways de Rouen.
• Gensight issues €2.8 million in ABSA for the benefit of qualified investors.
• The main publications of the day : Vicat, Cellectis, Solutions 30, Delfingen… The rest here.

In the big world

Important (and not so important) announcements

D’Europe

• Volkswagen’s cost cutting is “necessary after decades of structural problems“, according to the CEO to the press.
• Novartis CEO is “very confident” about the sales target and does not fear the loss of patents.
• J Sainsbury is extending its policy of matching prices with those of Aldi to its convenience stores.
• M&G Plc has acquired a 65% stake in European property investor BauMont.
• Ryanair’s H1 profit fell 18%, but price weakness eased. The company warns of a potential reduction in UK flights if air travel tax rises. It is revising its medium-term traffic projections downwards due to Boeing’s delays.
• The main publications of the day : Ryanair, Kingspan…

From North America

• Nvidia and The Sherwin-Williams drive Intel and Dow Inc out of the Dow Jones starting November 8.
• Striking Boeing workers are once again called to vote on a draft social agreement on Monday.
• Berkshire Hathaway at its zenith, after new sales from Apple and Bank of America.
• KKR is exploring the possibility of investing in Thames Water, according to Sky News.
• ISS recommends that Frontier Communications shareholders refrain from voting on Verizon’s tender offer.
• Walt Disney creates a business unit to coordinate the use of AI and augmented reality.
• Blackstone is in advanced talks to acquire shopping center owner Retail Opportunity, according to Reuters.
• New York rejected its appeal against PepsiCo for plastic pollution.
• The main publications of the day : Vertex Pharmaceuticals, Palantir Technologies, Zoetis, Constellation Energy, Marriott, NXP Semiconductors, Illumina, BioNTech, Brookfield Asset Management, Hologic, Fox Corporation…

From Asia Pacific and beyond

• BYD increases production and hiring amid third-quarter growth.
• The boss of Nvidia asked SK Hynix to bring forward the supply of HBM4 chips by six months.
• The main publications of the day : Westpac, Itau Unibanco…

The rest of the global publications calendar here.

Lectures