Missed takeoff

I take this opportunity to apologize in advance to Marc A, who kindly tackled me yesterday: today’s column is still a little too serious, but I promise the return of nonsense, scandalous music (by the way, do you know the relationship between Joe Dassin and Marie Drucker?) and pitiful puns by the end of August.

The equity markets continue to move like a crab as we approach mid-August, after seven very favorable first months on the stock market. Yesterday, Europe confirmed the positive dispositions seen the day before, progressing in a sometimes pronounced way. This was the case for the French market, boosted by the rebound in the luxury sector. Beijing has lifted restrictions on group travel for its flock to 70 destinations. Tourism to France had already been reauthorized in March, but the increased flow of Chinese travelers around the world is positive news for brands like LVMH et Hermes, which are sold in transit areas around the world. Same topo for spirits, with positive progress yesterday for Diageo, Remy Cointreau or Pernod Ricard. The announcement also, a fortiori, benefited tourism and air transport operators.

The rapid start of the European indices in the morning was validated at 2:30 p.m. by the publication of inflation that was a little more moderate than expected in the United States in July. The statistics confirmed the market in its forecast of a status quo of the American central bank on its rates in September. Despite everything, the strong initial rise of Wall Street, with for example a Nasdaq which gained 1.7%, evaporated thereafter. The technology index ended at +0.18% and the S&P500 at +0.03%. Instead of falling as logic would have it after the inflation figures, the yield on US government bonds rebounded, rising to 4.11% for the 10-year. This rally was not so much caused by the always hawkish comments of the president of the Fed of San Francisco Mary Daly as by a sluggish auction of US 30-year debt by the US Treasury. Investors have indeed asked for the highest rate since 2011 to absorb the paper, a sign that they are not very comfortable with the current context, in particular this recession that everyone announces but which never comes.

Friday’s session is devoid of big corporate earnings announcements. The events most likely to influence the session are the July US Producer Price releases at 2:30 p.m. and the University of Michigan Consumer Confidence Index at 4:00 p.m. A key cog in the economy across the Atlantic, the American household is under pressure from rising interest rates, but maintains a high level of spending. Economists think that confidence should crumble slightly but remain close to the levels of the previous month (71.6 points).

Since not much is happening in Western markets, a kind of less dramatic remake of “There’s Nothing New in the West”, it’s on the side of China that you have to look for animation. Local indices are struggling as we approach the end of the week’s final session. The CSI300 lost around 1.3% and the Hang Seng 0.6%. Two compartments weigh. Technology stocks on the one hand, after the new investment restrictions announced by Washington. The real estate sector on the other hand, in the wake of the fallen angel Country Garden. The late China’s biggest promoter has warned of colossal losses in the first half, equivalent to 7.6 billion US dollars. He had missed two bond coupon deadlines earlier in the week. The action, which has already lost a third of its value in 5 days, has just fallen below the threshold of 1 HKD in Hong Kong. The real estate sector remains a major source of concern for Chinese economic stability, but not the only one: there are quite a few papers this morning in the financial press on the pressure exerted by the central government on the provinces to refinance their colossal debts. For his part, Joe Biden continues to wield the carrot and the stick vis-à-vis Beijing. In a speech a few hours ago, the President of the United States said that China is a ticking time bomb, that the country is in trouble and that the situation is worrying, because “when poor people have problems, they do poor things”. South Korea, Australia and India fell more slightly. As for the Japanese market, it is closed for the mountain holiday. Europe is expected in the red at the open, after the late moderation of the rise on Wall Street last night. The CAC40 lost 0.6% to 7389 points shortly after opening.

Economic highlights of the day

After the second reading of French inflation for July at 8:45 a.m., heading to the United States with July producer prices (2:30 p.m.) and the consumer confidence index from the University of Michigan in August (4:00 p.m.) . Full schedule here.

L’euro is trading at 1.0985 USD. L’once d’or is trading at 1914 USD. Oil consolidated its gains, with a Brent from the North Sea at 86.29 USD per barrel and an American light crude oil WTI at $82.36. The performance of the american debt over 10 years rose to 4.11%. THE bitcoin is trading around 29,400 USD.

The main changes in recommendations

• ABN Amro : Morningstar maintains its buy recommendation with a target price of EUR 17.
• Adidas : Oddo BHF maintains its neutral recommendation with a price target raised from EUR 175 to 181
• antofagasta : Jefferies maintains its buy advice with a price target raised from 1750 to 1900 GBp.
• Beiersdorf : Societe Generale maintains its buying advice with a target price raised from 139 to 140 EUR.
• Continental AG : Landesbank Baden-Württemberg maintains its recommendation to keep with a price target raised from 70 to 75 EUR.
• Covestro AG : Landesbank Baden-Württemberg is maintaining its buy advice with a price target raised from 46 to 53 EUR.
• Engie : Credit Suisse goes from restricted recommendation to outperformance with a price target maintained at EUR 17.50.
• Euronext : Morgan Stanley remains weighted in line with a price target raised from 76.10 to 79.70 EUR.
• GEA Group : Citi maintains its buy advice with a target price reduced from 46.40 to 45.70 EUR. JP Morgan maintains its underweight recommendation with an unchanged price target at EUR 36.
• GSK: Citi maintains its neutral recommendation with a price target reduced from 17 to 15.35 GBP.
• HelloFresh : BNP Paribas Exane maintains its neutral recommendation with a price target reduced from 23 to 22 EUR. Credit Suisse maintains its neutral recommendation with a price target raised from 23 to 24 EUR.
• handle : Credit Suisse maintains its neutral recommendation with a price target raised from 66 to 74 EUR. JP Morgan maintains its neutral recommendation with a price target raised from 70 to 73 EUR.
• Holmen : DNB Markets goes from hold to sell with a reduced price target of 460 to 390 SEK.
• HSBC : Citi maintains its buy advice with a price target raised from 7.70 to 8.30 GBP.
• KBC : RBC Capital maintains its sector performance recommendation with a price target reduced from 78 to 75 EUR.
• Knorr brake : BNP Paribas Exane maintains its neutral recommendation with a target price raised from 64 to 65 EUR.
• Munich Re : Landesbank Baden-Württemberg maintains its recommendation to keep with a target price raised from 330 to 360 EUR.
• NIBE Industry : SEB Bank maintains its recommendation to keep with a target price reduced from 125 to 100 SEK.
• Novo Nordisk : DNB Markets goes buy to hold with a reduced target price of 1380 to 1330 DKK. Morningstar maintains its sell recommendation with a price target raised from 900 to 950 DKK. Societe Generale maintains its recommendation to sell with a target price raised from 820 to 850 DKK.
• Orsted : Nordea Bank maintains its buy advice with a reduced price target of 910 to 900 DKK.
• Persimmon : Citi maintains its neutral recommendation with a reduced target price of 11.33 to 11.15 GBP.
• Qiagen : Morgan Stanley maintains its overweight recommendation with a price target reduced from 50 to 49 EUR.
• Remy Cointreau : Morgan Stanley maintains its underweight recommendation with a price target raised from 133 to 136 EUR.
• RWE : BNP Paribas Exane maintains its Outperformance recommendation with a target price raised from EUR 50.70 to EUR 54.
• Siemens : AlphaValue/Baader Europe is maintaining its buy advice with a price target reduced from 185 to 182 EUR. Morgan maintains its overweight recommendation with a reduced price target of 200 to 190 EUR.
• Swedish Orphan Biovitrum : Morgan Stanley maintains its overweight recommendation with a reduced target price of 275 to 270 SEK.
• Swisscom : Citi maintains its neutral recommendation with a price target reduced from 590 to 585 CHF.
• Taylor Wimpey : Jefferies maintains its buy advice with a price target raised from 141 to 147 GBp.
• Thales : Barclays remains weighted in line with a reduced target price of 154 to 148 EUR.
• Vestas : SEB Bank maintains its buying advice with a reduced price target of 250 to 240 DKK
• Voestalpine : Barclays maintains its overweight recommendation with a target price reduced from 40 to 37 EUR.

In France

Company results (comments are given on the spot and do not prejudge the evolution of securities)

• Coface publishes lower results in H1 and gives an appointment next year for a new strategic plan.

Important (and less important) announcements

• Pernod Ricard signs an agreement for the distribution of FUJI, the group’s super-premium Japanese whiskey Kirin.
• S&P assigns a ‘BB’ credit rating toAtos under surveillance with negative implications.
• Dassault Aviation is confident in its objective of delivering Falcon in 2023.
• 2CRSi postpones the holding of its general meeting.
• Abivax wants to raise funds in the form of ADS in the United States, without specifying the terms at this stage.
• Genfit announces the publication in Hepatology Communications of data on the clinical performance of NIS2+ in elderly patients.
• They have published / They must publish:GIVE…

In the world

Company results (comments are given on the spot and do not prejudge the evolution of securities)

• Metro did less well than expected in the third quarter.

Important (and less important) announcements

• Italy will take up to 20% of the network of Telecom Italia which will be bought by KKRbased on a valuation of €23 billion.
• UBS asked the SNB to terminate the credit facility agreement granted to Credit Suisse.
• Amazon is phasing out dozens of its private labels to avoid antitrust investigations and bolster its profits, according to the Wall Street Journal.
• Rio Tinto will build the biggest solar power plant in northern Canada.
• The British antitrust authority provisionally clears the operation UnitedHealth–EMIS.
• The former number one of the Chinese promotion, Country Garden Holdingscontinues its descent into hell on the stock market while its losses will be colossal.
• The role of Microsoft in the data breach is part of the US cybersecurity investigation.
• Poland is negotiating the purchase of 22 AW101 helicopters from Leonardo.
• The main publications of the day: ENBW, Known, Bechtle, Lotus Bakeries, Fraport, SimCorp… Full schedule here.

Lectures