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| This week's gainers and losers |
Gainers: Sarepta Therapeutics (+24%): The laboratory rebounded sharply this week after a reduction in its losses in Q4 2022. Instead, research firms were expecting a widening deficit and lower sales. Several have raised their expectations on the Massachusetts-based company, such as Baird, buyer with a target raised from 125 to 22 USD. Salesforce (+15%): The software company took the market by surprise by announcing better than expected quarterly results. As expectations were low, the stock jumped. "The group announced the trifecta: growth, high margins and share buybacks," said Brent Hill, who follows the company at Jefferies. CRH (+11%): The Irish group specializing in building materials announced, on the sidelines of its results, its ambition to be listed in the United States, where it hopes to do more business in the future, while the North American region already generates three-quarters of its results. Let's hear from Berenberg's Harry Goad, for whom "CRH pulled not one, but two rabbits out of the hat at its fiscal 2022 results: a sharp increase in share buybacks and the announcement of its intention to move its main listing to the US." Rio Tinto (+9%): Strong industrial metals performance benefited the iron, copper and other minerals giant this week. The prospect of an upturn in the Chinese economy is a powerful driver for the sector. While the signals have been rather timid lately, the latest Chinese PMI activity indicators have clearly taken the upward slope, providing fuel for mining stocks. Losers: Ocado (-11%): Bad times for the British group which is both a food distributor and a provider of logistics solutions for this sector. The 2022 pre-tax net loss is just over £500m, which is considerably higher than expected. Some analysts fear that a capital raise will become necessary if the situation does not improve. Dish Networks (-17%): the American satellite TV operator was punished by investors after revealing that a computer breach may have allowed hackers to steal personal information about its customers. A little earlier, Dish had explained that a major outage affecting its networks was caused by a cyber attack. Universal Health Services (-15%): The group specializing in owning and managing health centers posted disappointing results, with EPS below consensus. Pure Storage (-14%):The data storage specialist saw Q4 revenues jump 14 percent year-on-year and reported its biggest ever profit, but this was not enough for analysts, which expected higher revenues and a better guidance. |
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| Commodities |
| Energy: Oil inventories rose in the United States for the tenth consecutive week, an oversupply that tends to penalize the WTI against the Brent. The two benchmarks are trading at 76.80 and 83.5 USD respectively. In other words, the spread between the two global benchmarks is widening. Also in the United States, the U.S. Energy Agency (EIA) revealed in its latest report an acceleration of U.S. oil exports to 5.6 million barrels per day. Again, the weakness of WTI favors this phenomenon. In Europe, nothing to report on natural gas, which continues its long decline, to the delight of European consumers, at 45 EUR/MWh for the Dutch benchmark. Metals: Industrial metal prices have been on a rollercoaster ride this week. While the good economic statistics unveiled by Beijing give cause for optimism about the country's ability to emerge from its torpor, in the short term investors prefer to opt for caution while awaiting the conclusions of the next annual meeting of the Chinese parliament. Copper is trading around USD 8950 on the London Metal Exchange. In precious metals, gold rebounded strongly to USD 1850 as bond yields eased. Agricultural products: The latest report from the US Department of Agriculture (USDA) continues to weigh on grain prices in Chicago. As a reminder, the USDA expects significant growth in U.S. wheat and corn production due to increased acreage for both crops. In Argentina, the situation is quite different, since the numerous dry spells could significantly impact corn crops. In terms of prices, a bushel of wheat is trading lower at 710 cents, as is a bushel of corn at 630 cents. |
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| Macroeconomics |
| Atmosphere: A bit of China, a bit of positive thinking. The latest statistics published in the United States and Europe continue to paint a rather improbable triptych. On the one hand, some economic disorders, especially in the manufacturing industry. On the other hand, inflation is struggling to slow down. And in the middle, entire sectors that seem to be ignoring the more restrictive financial conditions, such as the labor market, real estate and the service industry. In this context, equity markets continue to drink in the words of central bankers who distill forecasts that are not always easy to relate to one another. It should be noted, however, that the bond market has become tense this week, with the US 10-year yield back above 4%. This is a sign that investors no longer believe in a rate peak below 5% in the US, as was the case a month ago. At the same time, Chinese statistics are finally showing some positive signs, which could put some fuel back into the engine of equity markets that seem to be a bit dry. Currencies. Fluctuations have been relatively contained in recent days, compared to those of previous weeks. The U.S. dollar has entered a breathing phase after its rally, but the consolidation is modest. The Dollar Index (DXY), which compares the greenback to a basket of six currencies, is hovering around 104.80, compared to 105.20 a week ago. The Indian rupee (INR) is strengthening against major currencies after the announcement of a larger-than-expected fiscal deficit reduction target. The INR/USD pair is trading at USD 0.0122 per 1 INR. In Europe, EUR/CHF is little changed at CHF 0.9962 per EUR. The EUR/GBP pair is in a similar situation, with a level of GBP 0.8852 for 1 EUR. Rates. And one more! For the fourth week in a row, U.S. rates continued to rise and even approached 4.10% before easing a bit. Next week could prove to be important as economists await more clues on the job market. Remember that February's bullish rally began on the heels of the release of much better than expected nonfarm payrolls. The question now is whether February's data was just a catch-up from the previous months or a real illustration of the strength of the U.S. labor market. The latter would increase the pressure on the Fed to maintain its hawkish stance. On the European side, the latest macroeconomic data show a continuation of inflation that the ECB will also have to try to contain by further increases in its main policy rate. We will watch the 2.80% as intermediate resistance before the 3.01%. Cryptocurrencies. Amid a growing regulatory crackdown in the US on crypto-currencies, and less than optimal macro conditions for risky assets, bitcoin is stalling. The crypto-asset market leader is letting go of 5% of its capitalization this week and is back flirting with $22,000 as of this writing. Without strong positive catalysts, bitcoin, and the crypto-currency market as a whole, may still struggle to regain the hearts and confidence of investors. Timeline. For all of the above reasons, the main event next week is Fed boss Jerome Powell's semi-annual hearing before the U.S. Senate Banking Committee on Tuesday. He will do the same thing the next day in front of the House of Representatives, but we can bet that he will give more or less the same speech. The other big event of the week relates to the US labor market, with the quartet of ADP survey / JOLTS survey on Wednesday, then Challenger survey on Thursday and finally employment data in February on Friday. In Europe, Christine Lagarde is scheduled to speak on Wednesday at an event in Geneva. In Asia, the Bank of Japan will issue a monetary policy decision, the last of the Kuroda era, on Thursday night. Meanwhile in China, authorities are expected to set growth targets for 2023 on Monday. |
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| Things to read this week | ||||||
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*The weekly movements of indexes and stocks displayed on the dashboard are related to the period ranging from the open on Monday to the sending time of this newsletter on Friday. The weekly movements of commodities, precious metals and currencies displayed on the dashboard are related to a 7-day rolling period from Friday to Friday, until the sending time of this newsletter. These assets continue to quote on weekends. |
