Tanks, Microsoft and a technical problem

Stock markets marked time yesterday, after two sessions of sharp recovery. In Europe, the indices ended in scattered order, on either side of the balance. Green side for Paris, Milan and Madrid and red side for Frankfurt, London, Brussels and Stockholm. In Zurich, as a good representative of the legendary Swiss neutrality, the SMI ended up perfectly balanced. This apparent calm, however, masks some major sector movements, with marked declines in several defensive sectors, particularly in Healthcare and Consumer Staples. Conversely, cyclical stocks continued to perform well, driven by hopes of a recovery in China. The Chinese economic acceleration is a bit like the Arlesian of the markets: every January, hope is reborn. But in recent years, it was more like a flash in the pan than the sacred fire. We could also comment a little on the paradox of Westerners who are alarmed by Chinese power and who seek to slash its economic and political influence, while stamping their feet like kids waiting for the country to accelerate. Portfolio time is not geopolitical time.

In the United States, the indices took a break after a big rebound. The session had started haphazardly with a problem with the rating of several dozen large stocks that displayed preposterous variations. The NYSE has not yet provided an explanation, but the SEC, the American stock market policeman, has opened an investigation. A priori it is a technical problem and not a “fat finger”, these errors of traders which cause spectacular and often funny imbalances (unless you are one of the aggrieved investors, of course). Things got back to normal afterwards. The end-of-day balance sheet resembles that of Europe, with the Nasdaq 100 down 0.22%, the S&P500 at -0.07% and the Dow Jones at +0.31%, helped by its old guard : UnitedHealth, Honeywell or Caterpillar.

Corporate earnings releases continue with mixed data that is not always easy to interpret. Yesterday evening after the closing, investors initially seemed delighted with Microsoft’s results, before finally deciding that they weren’t. The computer giant is not completely above the turmoil of the world and expects to be caught up in slowing economic momentum. It didn’t crash the stock, but the initial out-of-hours gains turned into a contraction. Overall, the figures of the companies that have published are more fragile than in previous periods. In other words, not as many are now beating systematically undervalued market forecasts. And the overshoots are no longer as high as the market’s systematically undervalued forecasts. Uh, clearly, the numbers are deteriorating without collapsing. To be followed today in Europe, the results of ASML, Alstom, Givaudan or Lonza. In the United States, Abbott, Nextera, AT&T and Boeing before the bell then Tesla and International Business Machines after the session.

Today’s headlines revolve around the United States and Germany agreeing to deliver heavy tanks to Ukraine. The United Kingdom had already promised to send Challengers. No news from France, which prefers to keep its Leclercs just in case, but which is not against supplying a few Carrefours and one or two Auchan. More seriously, there are still strong symbols to see American and Russian combat tanks confronting each other. And I’m not even talking about German tanks against Russian tanks. For those who doubted it, it is indeed the return of History. In addition, classified documents were found at the home of Mike Pence, the former American vice-president. Obviously in the United States, if you don’t have top-secret documents at home, you’ve missed your political life. Ah, and no mass shootings have been reported in California for 24:00.

On the macroeconomic front, the PMI indicators published yesterday have, on average, rather exceeded expectations, particularly in Europe. Today, there will be only the German Ifo confidence index to put in their mouths (at 10:00 am). The serious things resume Thursday with the first estimate of the GDP of the 4e quarter in the United States and durable goods orders in December. The next day will be the turn of US PCE inflation, which will fuel the speculation mill ahead of next week’s crucial meetings for investors, the monetary policy decisions of the Fed, the ECB and the BoE. .

The Asia-Pacific zone is still an orphan of the Chinese markets, closed for the Lunar New Year festivities. Seoul and Singapore, on the other hand, reopened this morning, on big gains since the two places are catching up with the two bullish sessions on Friday and Monday in the United States. Japan is no longer falling, with a Nikkei 225 which closed higher for the fourth consecutive time, on an increase of 0.35%. It’s more complicated in India where the SENSEX lost 1% during the session. European leading indicators are bearish this morning.

Economic highlights of the day

Reduced program, with the morale of German business circles, the Ifo index, at 10:00 a.m. The whole agenda here.

The euro touches 1.09 USD. The ounce of gold stabilizes at 1930 USD. Oil is regaining altitude, with Brent from the North Sea at 86.53 USD a barrel and US light crude WTI at 80.44 USD. The yield on the US 10-year debt fell again to 3.47%. Bitcoin drops slightly below USD 23,000.

The main changes in recommendations

  • Amplifon: Jefferies goes from holding to buying, targeting EUR 29.20.
  • Aroundtown: Societe Generale goes from holding to selling, targeting EUR 2.25.
  • Ascom: Research Partners remains long with a price target reduced from 17 to 15 CHF.
  • Azelis: Morgan Stanley starts tracking at online weighting.
  • BigBen: In Extenso remains strong buying with a reduced target of 11.80 to 11.35 EUR.
  • Brenntag: Morgan Stanley starts tracking to overweight.
  • Covivio: Goldman Sachs goes from neutral to buy, targeting EUR 71.10.
  • Dätwyler: Berenberg starts the follow-up to hold aiming for 220 CHF.
  • Demant: Jefferies goes from buy to hold aiming for 205 DKK.
  • Direct Line: Berenberg goes from buy to hold aiming for 160 GBp.
  • Gecina: Societe Generale goes from buying to keeping, targeting EUR 109.50.
  • GN Store: Jefferies goes from underperforming to holding by aiming for 170 DKK.
  • Hexagon: Berenberg switches from buy to hold aiming for 120 SEK.
  • Holcim: Goldman Sachs remains short with a price target raised from 38 to 39 CHF.
  • Icade: Societe Generale goes from buying to keeping, aiming for EUR 43.50.
  • IMCD: Morgan Stanley starts online weighted tracking.
  • InterContinental Hotels: Jefferies remains long with a price target raised from 5,500 to 6,200 GBp.
  • Klépierre: Societe Generale goes from keeping to selling, targeting EUR 16.70.
  • Nacon: In Extenso is still strongly buying with a target reduced from 5.45 to 4.90 EUR.
  • OPAP: Citigroup goes from neutral to buy, targeting EUR 16.
  • Saipem: Citigroup goes from neutral to buy, aiming for 2 EUR.
  • Sonova: Jefferies goes from buying underperforming to targeting CHF 200.
  • Swatch Group: Goldman Sachs remains long with a price target raised from 318 to 360 CHF.

In France

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

  • Alstom: organic growth over nine months reached 6% and order intake 3% (orders/invoices ratio of 1.2). The outlook for 2022/2023 and the medium-term objectives for 2024/2025 are confirmed.
  • ID Logistics: 4.7% increase in revenues in Q4.
  • McPhy: orders up 65% in 2022. Ebitda negative from €37 to €37 million.

Important (and less important) announcements

  • BNP Paribas will reduce the financing of oil projects by 80% and raise the objective of financing renewable energies.
  • Management and three unions at Schneider Electric signed a wage agreement on Tuesday.
  • Airbus will provide satellite communications to the Belgian armed forces.
  • Stellantis is recalling 76,000 hybrid minivans due to an electrical problem.
  • Atos is negotiating the sale of its unified communications and collaboration services business. Unify weighs in at €550 million in annual revenue.
  • Gaztransport & Technigaz retained by Hyundai for the design of the tanks of two new LNG carriers.
  • The government is still hoping for an agreement between Orpéa and Caisse des Dépôts.
  • Vallourec signs a major long-term agreement with Petrobras.
  • The AMF gives the green light to the simplified takeover bid on Union Financière de France.
  • GL Events signs a contract with LOXAM for the 2024 Paris Olympics.
  • MedinCell launches a phase III study on an antipsychotic.
  • 2CRSi strengthens its partnership with Sogitec.
  • They have also published / they are on the agenda: Voltalia, Groupe Crit, Aubay, Witbe, Altheora, Prismaflex, Sidetrade, Somfy, Compagnie des Alpes, Infotel, Sword, Aramis, Focus Entertainment, Exel Industries, Implanet, Groupe Partouche…

In the world

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

  • ASML: Earnings above expectations in Q4. Growth is expected to exceed 25% this year.
  • Givaudan: the flavors and fragrances specialist published results rather in line with expectations. The medium-term objectives are reiterated.
  • Lockheed Martin: outlook is mixed for 2023 after forecast exceeded in Q4. The title is stable post-session.
  • Lonza: the Swiss published results in line with expectations and guided on 10% growth and an EBITDA margin of 30 to 31% this year. The 2024 objectives are confirmed.
  • Microsoft: quarterly results are quite solid, but the title loses 1% out of session after the announcement of a forecast of slower growth of Azure.
  • Texas Instruments: the title is unchanged after the announcement of the last quarterly.

Important (and less important) announcements

  • The United States is suing Google over its dominant position in advertising.
  • Rupert Murdoch withdraws proposed merger between Fox Corp and News Corp.
  • Tesla will invest $3.6 billion to expand its Nevada factory.
  • Walmart will raise the average hourly wage of its American workers to $17.50.
  • ViaSat wins contract to provide satellite communications to US Marines.
  • Nel sells all his shares in Hyon.
  • Main publications of the day: Tesla, ASML, Abbott, Nextera, AT&T, International Business Machines, Boeing, Lonza, Givaudan, Alstom, Fresnillo, Acerinox… The whole agenda here.


  • Will the Fed do too much? (Project Syndicate, in English).
  • The unknown hedge fund that received $400 million from Sam Bankman-Fried (New York Times).
  • Is the Universe infinite? (The Conversation).
  • According to the Bulletin of the Atomic Scientists, humanity has never been closer to its own annihilation (The Verge, in English).
  • Tracking, paranoia and small notes in detention: investigation around the murderous journey of the “HRD killer” (Le Monde).
  • The Earth is begging you to accept smaller EV batteries (Wired).
  • TGV: what is “Le Train”, the private company that buys high-speed trains? (The cross).
  • Crypto’s favorite bank is in trouble (Intelligencer, in English).
  • For humpback whales, bubbles can be tools (Hakai Magazine).

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