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| This week's gainers and losers |
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UPS (+15%): The logistics company surprised markets with solid quarterly results. Analysts revised their expectations upwards and raised their average price target from $230 to $241. AMD (+14%): The number two American computer processor was also one of the week's pleasant surprises with a significant increase in Q4 profits and a better than expected forecast. PayPal (-24%): The mother of all fintechs is having trouble. Its forecasts have disappointed investors and analysts have had a field day with a very consensual buy. Meta Platforms (-21%): in the world of big American technology, the former Facebook is clearly the ugly duckling of the moment. Its overly cautious forecasts and an increasingly fierce competitive environment have caused the stock to explode, losing $200 billion in capitalization on Thursday alone. Exelon Corp (-23.6%): The U.S. electricity producer and distributor, has spun off Constellation Energy Corp, its competitive energy division, acquired in 2011. The latter is soaring as Exelon plunges. |
| Commodities |
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Oil markets are on their seventh consecutive week of increase and are now up by more than 15% since January 1, 2022. Nothing seems able to bring down this upward pressure, which is now pushing speculators to open long positions on futures contracts with a delivery price of USD 100, or even USD 125 by December 2022. In other words, many investors see oil above USD 100 per barrel this year. On the short-term catalyst side, the event of the week was obviously the OPEC+ meeting, which ultimately offered little respite for investors. The expanded organization did schedule a further 400,000 barrels per day increase for March, but traders are struggling to give credit to this effort due to OPEC+'s difficulties in meeting its commitments for additional production. Brent crude is trading at USD 92.1 compared to USD 91.4 for the U.S. benchmark, WTI. Gold rose a bit this week to USD 1,810, but failed to spark a rally despite rising volatility in equity markets, which could have prompted investors to seek refuge in safe-haven assets. The weekly rise had more to do with the fall in the greenback, which made the ounce of gold more attractive to "international" investors. Silver was flat at USD 22.5 per ounce. In industrial metals, nothing very exciting happened this week due to the absence of Chinese traders who deserted the market for the Lunar New Year. As such, trading volumes and variations remained narrow. However, we note the easing of aluminum prices, which stabilized above USD 3,000, thanks to increased Russian gas deliveries to Europe, which eases the pressure on European smelters. In soft commodities, wheat and corn prices declined in Chicago to 619 and 777 cents per bushel respectively. Cocoa, on the other hand, continued its advance to USD 2,634 per ton, a rise fueled by robust demand while supply remains constrained by the prospect of a modest harvest in Ivory Coast due to abnormally dry weather. |
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| Macroeconomics |
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Investors were expecting movements in the currency and bond markets with the US central bank meeting in the last week of January. But it was the European Central Bank that finally shook things up on February 3. After the release of a rather conventional statement, Christine Lagarde guided markets on a more aggressive approach by the bank in the fight against inflation. In particular, she refused to rule out a rate hike this year, in contradiction with what had been hammered home until then. The euro has logically taken the upward slope, up to 1.1470 USD currently. The same is true of the Swiss franc, at CHF 1.0569. On the government bond side, the 10-year US government bond is yielding 1.91% (vs. 1.84% last week), and the Bund is now at 0.20% (vs. -0.02% a week ago). The French OAT jumps 26 points in the meantime, to -0.65%. The most anticipated statistic of the week, the US employment figures for January, delivered a verdict that is difficult to analyze: job creation was much stronger than expected but the unemployment rate rose slightly. As for hourly wages, they continued to rise by 0.7% over the month and by 5.7% over a year. The markets saw this as confirmation that the Fed would have to act vigorously on rates. For its part, the crypto-currency market is still unable to extricate itself from the slump that began almost three months ago. In the wake of stock market indexes, bitcoin has yet to get its head above water and remains at equilibrium over a week with a price hovering around $37,000, at the time of writing. While historically, the digital currency has been relatively uncorrelated with equity markets, the last few weeks have proven that its resilience to drops in the Nasdaq and S&P 500 is waning by the day. Bitcoin is even reaching all-time highs in positive correlation with Wall Street. Is this a passing trend or a sustainable dynamic? Revelation in the coming weeks. On the macroeconomic agenda next week, there's calm until Thursday and the publication of January inflation in the United States, estimated at 0.5% on the month, as was the case in December. Will the annual decline start, after prices surged by 7% year-on-year in December? |
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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. |
