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| This week's gainers and losers |
| Gainers: Palantir (+33%): The U.S. data analytics software maker is doing better than expected: it unveiled quarterly revenue up 18% and for the first time in its history, it posted an operating profit in the first quarter. These results were supported by the good health of the group's activities in the United States, in particular military contracts, and the popularity of its new generative artificial intelligence platform. The company has therefore raised its annual outlook and assures that it will be profitable every quarter of this year. Alphabet (+10%): Pressed by its competitor Microsoft, the giant Alphabet unveiled several novelties related to artificial intelligence. Among them, Google presented an update to its main search engine that incorporates more AI in its answers, dispelling doubts that it is losing ground to Bing, Microsoft's OpenAI-powered search engine. The group's stock price is also being boosted by favorable analyst comments following the announcements. Losers: THG (-35%): Things are not getting any better for THG (formerly The Hut Group)! Already in great difficulty, the British online sales platform has officially rejected the takeover offer of the investment company Apollo Global Management, because the latter did not value the group sufficiently, thus making its stock price plunge. As a reminder, the company went public in 2020 for 7 billion dollars, it is now worth about 1.21 billion. Catalent (-28%): Difficulties also continue for Catalent, which was bemoaning productivity issues earlier this spring. The American pharmaceutical supplier announced that it is postponing the publication of its quarterly results in order to make adjustments, which should affect the quality of the results. The group also announced that it is lowering its annual outlook for 2023, cutting its full-year revenue and profit forecasts by more than $400 million. Tyson Foods (-19%): The meat giant disappointed investors. For the quarter, the processor reported stable but lower-than-expected revenues, as well as lower earnings and a timid outlook for the rest of the year. High feed costs and lower meat prices weighed heavily on margins, and the group has already announced cost-cutting measures and layoffs. Icahn Enterprises (-18%): Second cut for Icahn Enterprises, the conglomerate founded by billionaire Carl Icahn. Already weakened last week by the allegations of the hedge fund Hindenburg Research, which accuses the group of inflating its assets and using practices similar to a Ponzi scheme, the company plunged again this week, when the New York prosecutor announced to launch an investigation into the governance and finances of the company. PayPal (-14%): The payment group reported higher-than-expected payment volume, quarterly revenue ($7.04 billion) and earnings per share, and raised its revenue and earnings guidance for the year. But management disappointed analysts with an uninspiring operating margin outlook. It was the unbranded payment processing business, called Braintree, with lower margins, that weighed down the party. |
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| Commodities |
| Energy: Oil prices have stabilized this week and are struggling to recover. The strength of the greenback does not help, nor the global atmosphere with concerns about the U.S. debt ceiling, the setbacks of U.S. regional banks, not to mention questions about the Chinese awakening. In short, investors are taking their foot off the pedal in risky assets, including oil. In other news, OPEC maintained its forecast for global oil demand growth in its latest monthly report. As is often the case, the cartel is cautious in its forecasts, pointing to numerous uncertainties that could prompt it to adjust its production if necessary. In terms of prices, North Sea Brent is trading at around USD 75 per barrel, compared to USD 71 for its US counterpart, WTI. Metals: It's not a happy time. Base metal prices extended their downward sequence this week. Copper is trading at USD 8260 per ton on the London Metal Exchange, its lowest level of the year. The latest economic data from Beijing is not very exciting, as it does not really highlight a jump in Chinese industrial production, which has dampened the spirits of traders, who are passing on the industrial metals segment. The buying frenzy has also faded on gold, which is back near USD 2,000 per ounce. Agricultural commodities: Like energy and metal prices, grain prices also fell this week. In Chicago, a bushel of wheat is trading around 630 cents, as is corn, which is down to 580 cents. |
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| Macroeconomics |
| Atmosphere: The latest macroeconomic indicators published in the United States point to less biting inflation and a slowing economy. This adds fuel to the prevailing sentiment that the Fed is at its rate peak. Europe, on the other hand, has not yet been able to let its guard down (note the distressing pun). On the continent, inflation remains high, but not as high as in the UK, where the Bank of England raised its key rate from 4.25% to 4.50% this week, with a good chance of having to aim even higher. On the other side of the world, hopes of a Chinese awakening have taken another beating, after price and import/export statistics that are not very compatible with strong growth. In the short term, the fragility of the US regional banks and the tug-of-war over the US debt ceiling are the two storm clouds that threaten the weather in the markets. Currencies. The dollar held up very well despite news that could have weighed on it. This is illustrated by the fact that the dollar rose to 1.0908 USD for 1 EUR and 1.2519 USD for 1 GBP, while the ECB and especially the BOE are not as far along in the monetary cycle as the Fed. In the G7, only the yen regained some ground against the greenback, at JPY 134.7565. But neither the weakening statistics of the U.S. economy, especially the labor market, nor the weakness of small banks, nor the issue of the debt ceiling have debunked the dollar. To explain this holding, traders put a small piece on the rise of risk aversion on global growth, while China, as we said just before, fails to take the global leadership. The euro lost some ground against the franc to return to CHF 0.9741 at the end of the week. Rates. Despite a week rich in statistics, particularly concerning US inflation, the lines only moved slightly. CPI and PPI came out in line with expectations and even though they are down (slightly), inflation remains well above the Fed's 2% target. However, investors are now anticipating a status quo on the monetary policy front. The yield on the U.S. 10-year remains anchored within a narrow range of 3.31/3.64%, which we will have to wait for to give some color to a very gloomy market. Cryptocurrencies. Bitcoin has stalled this week, shedding 7% of its valuation and returning to hover around $26,500 at the time of writing. Ether, the second largest cryptocurrency in the market in terms of capitalization, is holding up a little better, falling 5% since Monday. Crypto-investors now seem to be watching, waiting for positive catalysts specific to the digital asset market, but also hoping for a clear improvement in economic conditions, which would allow for a potential influx of capital into risky assets. |
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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. |
