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| This week's gainers and losers |
| Gainers: Renewi (+41%): The British group specializing in waste treatment and recycling, active mainly in the Benelux countries where it holds around 30% of the market, exploded this week after turning down a takeover proposal from asset manager Macquarie. The Australian investment bank offered £775 per share, giving Renewi a valuation of £636 million. Jabil (+16%): The US electronics design, production and management subcontractor reported solid quarterly results: adjusted earnings for the last 3 months exceeded expectations and revenues were in line with projections. The company also announced that it had increased its share buyback authorization from $1 billion to $2.5 billion through 2024. The share price has gained over 80% since January 1. Losers: Nextera Energy Partners (-37%): The electricity producer and distributor plunged after drastically revising downwards its prospects for growth in the distribution per share of its limited partners: it is targeting 5% and 8% per year until at least 2026, compared with 12% to 15% previously. The American group is suffering from rising interest rates, which are limiting its investment projects, and dragging its parent company, Nextera Energy, in its wake (-16%). Nextera also announced this week its intention to sell Florida City Gas to Chesapeake Utilities for $923 million in cash. Newmont (-9%) & Barrick Gold (-8%): Gold is losing its lustre, and so are gold miners. Traditionally, the barbaric relic, which offers no yield, suffers when bonds are remunerative. For several months, the ounce had been holding its own. But the surge of the US 10-year to above 4.6% finally brought it down. Gold's lowest level since March, and a complicated week for American Newmont, Canadian Barrick and others. |
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| Commodities |
| Energy: Oil prices rose sharply in September, recording their fourth consecutive month of increases. Brent crude posted a handsome monthly performance of almost 7%, compared with 9.50% for WTI. It will have escaped your notice that the US benchmark is tending to catch up with its European counterpart, a phenomenon largely explained by the fact that WTI is benefiting from an additional bullish factor, namely the level of US inventories, which are well below their 5-year average. As a result, the Brent/WTI spread is tending to narrow. WTI is trading at around USD 91.20, a stone's throw from European Brent's USD 92.60. Still on the subject of energy, natural gas prices have fallen back to 43 EUR/MWh in Europe. The Old Continent is getting ready to enter the heating season with inventories 95% full. Metals: Copper struggles to get its head on straight. The barometer of the global economy is back on a downward path due to concerns over demand for metals, particularly in China. A tonne of copper is trading at around USD 8100 on the London Metal Exchange. As for gold, the barbarian relic, which had proved resilient despite the rise in bond yields, suffered significant sell-offs. The proof is in the pudding: gold has fallen for five consecutive sessions and is now trading at around USD 1,860. Agricultural products: Ukraine is back in the spotlight with the latest report from its Ministry of Agriculture. The report shows a 14% year-on-year increase in the country's grain harvest. However, it's difficult to get wheat, corn and other cereals out of the country without secure Black Sea shipping lanes. As a result, Ukrainian exports suffered, declining by 17% year-on-year. In Chicago, prices were little changed this week. Wheat was down to 576 cents a bushel, while corn edged up to 486 cents. |
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| Macroeconomics |
| Atmosphere: Saved by the bell. Investors are still monitoring any economic statistics that might support one of the pillars of the current narrative, namely the decline in US inflation. On this point, the announcement of a "deflated" Core PCE in line with expectations, i.e. +3.9% year-on-year compared with +4.3% in July, has lifted the spirits of investors shaken by a disastrous September in terms of stock market performance. If disinflation can maintain this pace, it would take another 6 months or so to return to the sacrosanct 2% level, which would take us roughly to March 2024. In the wake of the publication, the US 10-year yield began to ease, after hitting a local peak of 4.68%. At this stage, it is naturally too early to anticipate a trend reversal. As a first step, therefore, we'll be keeping an eye on the 4.33% level, the former peak of October 2022, to confirm a lasting fall in interest rates. Over the past week, macroeconomic data from the United States have been weaker than expected overall (consumer confidence, Q2 GDP, new and existing home sales, etc.), which has slightly eased market fears about the Fed's firmness. In Europe, inflation continues its slow decline. Crypto: Bitcoin is back on track, climbing +2.90% since the start of the week, and is back in contact with the $27,000 mark at the time of writing. In its wake, ether, the second-largest cryptocurrency in terms of capitalization, has soared by +5.8%, and is now close to $1,680. The main reason for this outperformance was the SEC's acceptance of an ether futures ETF issued by Valkyrie. For some, this positive decision could be the first of many for ETFs awaiting SEC approval in the US. |
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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. |
