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| This week's gainers and losers |
| Gainers: Prometheus BioSciences (+70%): The biotech company specializing in immunology saw its share price explode on the stock market after the announcement of its takeover by Merck for the modest sum of 10.8 billion dollars. This deal is part of a wave of transactions in the sector, a sign that the medical M&A market is waking up. Legend Biotech (+27%): Its shares jumped after a European medical association published results from a much-awaited bone marrow cancer drug study conducted in partnership with Johnson & Johnson. Intuitive Surgical (+11%): The share price shone this week, contrary to the US indices, after the announcement of higher than expected adjusted quarterly profits. Morgan Stanley said the company had resolved its margin issues. The company's business growth target for this year was also raised. Losers: Tesla (-11%): The electric vehicle manufacturer posted a gross margin of 19.3%, while analysts were expecting a little more than three points. Elon Musk's group has implemented a strategy of lowering prices in order to gain market share. Profitability is therefore sacrificed in the short term. The price war is particularly acute in China, where the group wants to differentiate itself from local competitors, who currently offer cheaper vehicles. AT&T (-11%): The telecoms operator saw its turnover increase slightly, to $30.1bn, but by less than analysts had expected. Net profit fell quite sharply to $4.23bn from $4.81bn in Q1 2022. Coinbase (-14%): The CEO of Coinbase told CNBC that the cryptocurrency exchange is “going to have to actually end up going to court” with the U.S. Securities and Exchange Commission. Last month, Coinbase received a Wells notice from the SEC, which warns of enforcement actions. |
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| Commodities |
| Energy: Oil prices have been in reverse gear this week, beginning a sequence of sideways movement that seems quite legitimate given the meteoric rise in prices between mid-March and mid-April, during which time Brent crude oil rose from USD 72 to 87. The latest data from the US Energy Agency has weighed on the trend as the EIA points to weakening gasoline demand, which is an excellent barometer of the ongoing economic slowdown in the US. US WTI and European Brent crude have thus lost ground this week, at USD 77.30 and USD 80.80 respectively for the two global references. In European natural gas, there is nothing to report, with the Rotterdam TTF still trading at around EUR 41/MWh. Metals: The industrial metals segment has declined overall this week, weighed down by a strong dollar and mixed economic statistics on industrial production in China. Copper is trading at USD 8875 per tonne on the LME. Some mining companies have released their quarterly accounts, such as Brazilian giant Vale, whose iron ore production rose by 5.8% year-on-year in the first quarter. Rio Tinto reported that its iron ore production jumped by 11% in the first quarter, still year-on-year. Finally, Antofagasta also reported an increase in mining production, with copper production up by around 5%. In precious metals, the ounce of gold is hovering around USD 2000. Agricultural products: Like energy and metal prices, grain prices also fell this week. In Chicago, the bushel of wheat is still showing some resistance by stabilizing around 680 cents. Corn, on the other hand, is losing ground at 620 cents. |
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| Macroeconomics |
| Atmosphere: Welcome to a non-binary world. In economics, more than anywhere else, nothing is totally black or totally white. Shades of grey come and go. Thursday's US economic data (housing sales and employment) were downgraded? But the activity indicators published on Friday (services and manufacturing PMI) largely exceeded expectations. As a result, investors are still guessing: is it better to have a strong economy and high interest rates, or an economy under pressure and a more flexible monetary policy? Currencies. There is still a hint of concern about US regional banks after a slight increase in the use of the Fed's liquidity line. The dollar fell to around 1.10 against the euro. This move is all the more important as the latest data from the US economy shows increased fragility in activity. Fears of recession are also reflected in the decline in oil, which has lost all the gains it made since the announcement of an OPEC+ production cut. The FOREX market looks uncertain in the days ahead, "due to a busy macroeconomic agenda and because investors are unlikely to take a clear direction until key Fed and ECB meetings in early May," Unicredit said. The euro is trading at GBp 0.8857 and CHF 0.9795. The dollar weakened against the yen to JPY 133.8678 ahead of the next BoJ meeting on April 27-28. Rates. According to a study carried out by Bank of America, the main concern of asset managers is now the risk of a credit crunch and a possible recession, particularly as a result of the crisis in the US regional banks. The pursuit of a restrictive ("hawkish") monetary policy to curb inflation is only in the background. As a logical consequence, the share of bonds in asset allocations is now 9%, the highest level recorded since 2009. For its part, the US 10-year yield also seems to be wavering. After recovering above 3.35%, it failed to break through its 144-day moving average, which has accompanied the rise since 2021 and now stands below 3.70%. As a reminder, since last year, yields have moved in the opposite direction to the S&P 500, with any rise in rates translating into weakness in the equity market and vice versa. A further rise should therefore further weigh on the performance of the US stock market's flagship index. Conversely, a sharp decline in bonds could also be interpreted by the smart money as a sign of a coming recession. Between heads I win and tails you lose, the path of the S&P 500 is likely to be more like a parkour course than a long, quiet river. To be continued. Cryptocurrencies. Bitcoin has lost everything it gained in the last week, falling -6.8% since Monday and hovering around $28,200 at the time of writing. Still not knowing in which direction to frame crypto-currencies, US regulators' position is still unclear, which contributes to the lack of visibility for market players. Meanwhile, the European Parliament has passed the MiCA regulation, which provides more clarity and a much-needed framework for companies in the industry wanting to expand in Europe. |
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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. |
