2023-08-15 05:56:00
The health of the Chinese patient remains a major source of concern, but Western stock markets remain optimistic after a strong corporate earnings season. The statistics published by Beijing are bad, Donald Trump is indicted and American technology shares are rising: the routine, what!
In the tables of macroeconomic statistics published by professional platforms, the figures appear in green when they are more favorable than expected and in red when they are below the consensus, that is to say the average of forecasters’ expectations. In the case of China, everything has been red or almost for months, as a kind of homage to the official graphic charter of the CCP. Rebelote this morning, with weaker than expected monthly statistics for industrial production, retail sales and investment. Meanwhile, the unemployment rate is on the rise, especially among young people. The Chinese statistics office will also stop publishing data on youth unemployment, officially to review its way of counting this category, which includes a majority of students who should not be retained, justifies Beijing. Nevertheless, this decision triggers a small smile. All that to say that things are still not going very well for the second world economy, which is struggling to restart the machine. The return of fears about the stability of the real estate sector does not help matters.
The situation is considered serious enough for the Chinese central bank to have changed its routine overnight. Economists thought the PBOC would act in September, but it pulled out some easing on August 15: the rates on the medium-term lending facility, known as the MLF, and the short-term facility were cut. It may be a detail for you, but for them it means a lot. Well not that much, as explained by ING’s head of research in Asia-Pacific, Robert Carnell, who regularly saves me by deciphering decisions at a time when everyone is sleeping on this side. of the world. Bob tells us that the PBOC’s decision suggests that the authorities are increasingly worried about the state of the macroeconomy, but that this does not mean that the politicians will bring out the heavy artillery in response. Rate cuts will still improve the debt-servicing capacity of cash-strapped local governments and real estate companies, Bob adds.
The reaction of the Asian markets to this announcement is timid this morning. Seoul is out of play for a public holiday. Australia and Japan, which generally remain quite stoic in the face of Chinese procrastination, are on the rise. On the other hand, Shanghai and Hong Kong are nosediving, because investors feel that this small step forward by the PBOC is not enough to save the faltering real estate giants, nor to revive the economic dynamic. The band-aid strategy continues to disappoint, because the financiers want electric shocks. At the same time, if panic took hold of Chinese decision-makers, or if the beginnings of a chain reaction in real estate / banks / local authorities were set in motion in China, I give you my note that the level of anxiety will begin to rise booming in markets around the world.
But for the moment we don’t give a damn and we prefer to fantasize about a magical recovery plan announced by Xi Jinping if things go really badly. Moreover, the Chinese setbacks did not prevent Western indices from rebounding yesterday. Moderately in Europe and a little stronger on the American tech side, which was once again boosted by their latest star, Nvidia. The new face of artificial intelligence jumped 7% after a very optimistic study by Morgan Stanley, dragging the entire compartment behind it, particularly semiconductors. On the other hand, the rest of the rating struggled to keep pace. Nvidia and consorts always give the impression of being the tree that hides the forest. But it continues to work, as it has since the end of 2022.
In the rest of the news, Donald Trump can add a noodle to his judicial collar. The former president of the United States has been indicted in Georgia for trying to overturn his 2020 loss in that state. This is his fourth indictment in court since the beginning of the year. US rates are tending, with a 10-year at 4.2%, on the verge of its best levels in the current cycle. The bond market seems less convinced than the equity market that the Fed’s rate hike is over. He is more boring so we listen to him less, but he is still often right. Bets remain open.
Meanwhile, Western leading indicators are bullish on August 15th. The CAC40 gleaned 0.1% to 7354 points at the opening.
Economic highlights of the day
The market will take notice of the ZEW confidence index of German financial circles (11:00 am). In the United States a quadruple statistic: Empire Manufacturing index for August and retail sales for July (2:30 p.m.), then business stock for June and real estate price index for August (4:00 p.m.). The whole agenda here.
The Euro is trading at 1.0914 USD. An ounce of gold trades at 1906 USD. Oil was little changed, with North Sea Brent at $86.27 a barrel and US WTI light crude at $82.07. The performance of the american debt over 10 years rose to 4.20%. Bitcoin is trading around 29,360 USD.
The main changes in recommendations
Adecco: Kepler Cheuvreux remains to be kept with a price target raised from 29 to 36 CHF. Adesso: Berenberg remains long with a price target reduced from 196 to 187 EURBeiersdorf: Bernstein goes from market performance to outperformance by targeting 130 EUR.Bellway: Berenberg remains to be retained with a price target reduced from 2,700 to 2,500 GBp.Danone: Bernstein goes from market performance to underperformance by targeting 50 EUR.Deutsche Bank: Berenberg remains to be retained with a price target raised from 11 at EUR 11.50.Eckert & Ziegler: Hauck & Aufhäuser remains long with a price target reduced from EUR 110 to EUR 60.Euronav: JP Morgan starts monitoring to overweight by targeting EUR 19.50.Galenica: UBS passes from neutral to buy, targeting 78 CHF.Henkel: Bernstein goes from market performance to underperformance, targeting 55 EUR.Hidroelectrica: Jefferies starts monitoring long, targeting 127 RON.L’Oréal: Bernstein goes from market performance to outperformance by targeting 440 EUR.Lindt: Bernstein goes from market performance to outperformance by targeting 110,000 CHF.Metall Zug: Kepler Cheuvreux remains long with a price target reduced from 2,400 to 2,100 CHF.MoneySuperMarket: Jefferies remains on the buy with a price target raised from 285 to 305 GBp.OC Oerlikon: Kepler Cheuvreux to be kept with a price target reduced from 5.40 to 4.60 CHF.Persimmon: Berenberg to be kept with a price target reduced from 1400 to 1300 GBp.Pexip: ABG goes from holding to buying, aiming for 26 NOK.Reckitt: Bernstein remains market performance with a reduced price target of 6700 to 6500 GBp.UBS: Vontobel remains long with a target price raised from 19.50 to 22 CHF.
In France
Important (and less important) announcements
Engie and Microsoft are jointly developing community solar projects in the United States. Voltalia has ambitions in Albania.They have published / They must publish: person…
In the world
Company results (comments are given on the spot and do not prejudge the evolution of securities)
Alfen has lowered its fiscal 2023 revenue forecast by around 9%. Marks and Spencer expects profit growth for the current fiscal year. slightly disappointing margin.Straumann publishes online revenues in H1 and announces the departure of its president in 2024, replaced by vice-president Petra Rumpf.Tecan publishes half-year results down and confirms the 2023 objectives set in March.
Important (and less important) announcements
UBS will pay $1.44 billion to settle the RMBS file, inherited from the 2008 crisis, with the United States Department of Justice. Berkshire Hathaway strengthened in residential real estate in Q2, betting on DR Horton, NVR and Lennar.Tesla launches new, cheaper Model S and X in the US.Activist investors pull out of Salesforce after stock price rally.Activist investor Elliott Investment Management sells stake in PayPal .Ryanair expects to hit new passenger record in August, senior executive quoted by Archyde.com quotes Thermo Fisher completes $913m acquisition of CorEvitas.Mutares completes purchase of German dairy producer Emmi .Eylea biosimilar from Sandoz (Novartis) improves visual acuity in late phase study.Implenia takes 41% stake in WindWorks Jelsa more serious on its risk scale. Exor, the Agnelli holding company, takes a 15% stake. Esmark offers to buy United States Steel at 35 USD per share. The main publications of the day: The Home Depot, Alcon, Sea Limited, Straumann, Legal & General, Pandora, Tecan, Seadrill, FLSMidth… The whole agenda here.
Lectures
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