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| This week's gainers and losers |
| Peloton Interactive (+48%): the US group specializing in connected exercise bikes is going from one extreme to the other at the moment. Amazon and Nike are reportedly considering buying the struggling company, according to rumors that emerged earlier this week. The resignation of the CEO has added to the speculation. Asana (+34.3%), the US project management software group, unveiled strong quarterly results and revealed that BlackRock, the investment giant, holds 6.3% of its shares. This is pushing the stock up. Carnival (+17%): the tourism sector is benefiting from the prospects of reopening with the end of health restrictions. The world's leading cruise company is recovering, as is its rival Royal Caribbean. Seagen (-8.6%): the laboratory that specializes in monoclonal antibodies is facing a downturn after weak quarterly results. The 2022 forecasts are sharply lower than what was expected by analysts. Herm?s International (-8%): the French luxury group has been subject to heavy downgrades this week, due to a very generous valuation. Usually, its status as an ultra-luxury player protects it from too much market turmoil. |
| Commodities |
| Oil prices have stabilized over the past five sessions, but that's enough to end their seven-week streak of consecutive increases. Tensions remain palpable in Ukraine and the surprise drop in U.S. inventories, which have fallen again in two weeks, continue to support oil prices. On the other hand, buyers must now deal with the resumption of negotiations around the Iranian nuclear issue, where Washington seems ready to make concessions in order to reach an agreement with Tehran. The eventual return of Iranian oil would mean an increase in supply of nearly 2 million barrels per day, which represents a real breath of fresh air in a market that is tight due to the dynamics of crude demand. The European benchmark, North Sea Brent, is trading at around USD 92, compared with USD 90.2 for a barrel of WTI. The barbarian relic has gained some ground this week, but has fallen sharply since the release of high inflation figures in the United States. The mechanism at work is simple, rising consumer prices should push the Federal Reserve to act quickly on its key rates, which impacts the yield curve with the T-Bond yield now exceeding the 2% mark. Real yields have also increased, which penalizes gold, which by definition delivers no yield. In terms of price, you will have to pay USD 1,825 to buy an ounce of gold, compared to USD 22.90 for the equivalent in silver. The atmosphere is much more breathable for industrial metals, which continue to advance, thanks in particular to the good Chinese economic statistics, where credit growth accelerated in January. Copper is thus trading above USD 10,000 per metric ton, nickel is up to USD 24,050, tin is moving full steam ahead at USD 44,445, as is aluminum at USD 3,300. In agricultural commodities, soybeans continued to rise in Chicago, supported by the more pessimistic forecasts of the USDA, which revised downwards once again its estimates of world stocks due to poor weather conditions in South America. Corn also gained ground to 646 cents a bushel while wheat stabilized at 776 cents. Note the surge in lumber prices, which gained over 20% in five sessions. The price of lumber remains particularly volatile due to supply disruptions, which are affecting Canadian production sites in particular, as they are having difficulty getting their production to the United States. |
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| Macroeconomics |
| Sometimes we'd like to talk about something other than inflation... but how can we do that when prices in the United States are continually rising and the Fed has to react vigorously? The cost of living rose by an average of 7.5% between January 2021 and January 2022, according to statistics published Thursday afternoon. This higher-than expected reading (economists thought that the surge would "only" go up to 7.2%) reinforced the already strong impression that the Fed will have to work hard to catch up. In other words, it might have to raise rates at a rapid pace, by half a point in March rather than the traditional quarter point. With the risk of causing damage to the real economy, particularly via credit. The CME's FedWatch tool is now predicting a double rate hike on March 16. At the risk of repeating ourselves, let's remember that phases of monetary tightening are rather favorable to stocks if they are well orchestrated. But the market is much less keen on abrupt reactions. In the foreign exchange market, the euro remains firm against the Swiss franc at CHF 1.0555. The single currency is also holding up very well against the dollar, at USD 1.14035, despite the turn of events in the United States. On the other hand, and rather logically, the prospect of an accelerated rate hike caused a decline in bond prices and a mechanical rise in their yield to 2.01% for the 10-year T-Bond. The German Bund rose to 0.26% and the French OAT to 0.73%. As for the Swiss signature, it stands at 0.24%. The cryptocurrency market is resurfacing after long weeks in troubled waters. The price of bitcoin has risen more than 15% in the last seven days and is back above the $43,000 mark at the time of writing. But this does not necessarily mean a quick return to the historical highs reached three months earlier. Let's not forget that it still suffered a 50% drop over this period and the road could still be long and full of pitfalls before seeing bitcoin erase this counter-performance, especially since the macroeconomic context does not necessarily play in its favor. Next week, four events stand out on the macroeconomic calendar: European Q4 2021 GDP and January US producer prices (Tuesday), January US retail sales and the minutes from the latest Fed meeting (Wednesday). |
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