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| This week's gainers and losers |
| Gainers: Immunogen (+138%): The US biotech jumped this week after announcing favourable results from Elahere, its candidate treatment for ovarian cancer, in a phase 3 trial. The drug showed a significant improvement in overall patient survival compared to chemotherapy. Several analysts raised their recommendation on the stock following the announcement. Uber (+21%): All lights are green for the ride-hailing company, which reported better-than-expected results and thus reassures on the viability of its business model. Quarterly revenue was up 29%, gross bookings were up 19%, and trips taken across all segments were up 24%. Profit and EBITDA also exceeded expectations, and the group continued to reduce its debt. The only red light on the dashboard is the freight division, which is down 23%. The group also announced a series of notable partnerships with The Kroger Co, Amazon and Stripe. Shopify (+18%): The Canadian e-commerce specialist has reported robust quarterly results: sales (+25% for Q1), profit, merchandise volume and cash flow are better than expected. But above all, the platform reassured investors by announcing, on the one hand, the elimination of 20% of its workforce, and on the other hand, the sale of its logistics and warehouse automation business. The group says it wants to focus more on its core business: creating tools for online retailers. Royal Caribbean (+10%): The weather is fair for the world's second largest cruise operator. Despite the economic slowdown, the cruise operator, like its counterparts, is benefiting from a renewed interest in travel. It has revealed a turnover higher than expected and a smaller than expected loss for the past quarter. The group, whose share price has risen by half since the beginning of the year, has raised its annual profit forecast. Losers: Chegg (-47%): Times are tough for education players. The US homework help company has warned the markets that the emergence of ChatGPT, the conversational artificial intelligence robot, is jeopardising its growth. In the last quarter, the group reported a 5% decline in subscribers and a 7% decline in revenue, which was worse than expected. In the wake of this, several analysts have revised their recommendations downwards. However, the group announced that it is working with OpenAI (the owner of ChatGPT) to integrate AI into its activities. Icahn (-40%): The short sellers have struck again! Activist hedge fund Hindenburg Research has issued a negative report on Icahn Enterprises, the US conglomerate founded by billionaire Carl Icahn. The paper argues that the investment company artificially inflates the value of its assets and operates a Ponzi scheme, using money from new investors to pay dividends to old ones. This caused an immediate plunge. First Horizon (-42%): Double punishment for First Horizon Corporation. Already weakened by the state of the banking sector in the US, after the failures of SVB, Signature and First Republic, the Tennessee-based lender suffered a setback with TD Bank. The Canadian lender, which was aiming to buy its troubled counterpart for $13.4bn, finally withdrew its offer, citing uncertainty over regulatory approvals. Western Alliance sold 51%, Comerica 28%, Bankunited 22%, East West Bancorp 19.9%, Citizens Financial 19.7%, Truist 19.5% and US Bancorp 15.5%. Estée Lauder (-18%): The cosmetics chain reported disappointing quarterly results, with revenue down 12% and net profit down 72% for the period, after lowering its forecasts three times in six months. The weak recovery in China (which accounts for a third of the company's revenues) and the tepid European market are the main reasons for the beauty products specialist's overall growth. It should be noted, however, that sales were up by 6% in the United States. |
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| Commodities |
| Energy: Oil prices have fallen for the third week in a row, still penalized by fears of recession. The cause has not changed: although observers expect a tense market in the second half of the year, investors continue to see the glass as half empty because of the damage that an economic slowdown could cause to demand. And it is clear that further aftershocks in the US banking system are not helping investor sentiment. As a result, oil prices have fallen in recent sessions by a relatively large amount, with European Brent and US WTI down by approximately 5% on a weekly basis to USD 74 and USD 70 per barrel respectively. Metals: There is not much to report this week in the industrial metals segment. Prices were generally flat, around USD 8500 for copper, USD 2300 for aluminium and USD 2600 for zinc. Gold, on the other hand, was the talk of the town as the dollar-denominated relic reached a new high of USD 2081. The precious metal is popular: it is benefiting from a fall in bond yields, which could continue to fall with the possible end of Fed rate hikes, but also from a rise in risk aversion with the setbacks of US banks. Agricultural products: Kiev and Moscow must once again agree on the extension of the grain agreement, which expires in a fortnight. This is not the first time, so the market is coming to terms with this uncertainty. However, the uncertainty has been ratcheted up a notch as Russia accuses Ukraine of having attacked the Kremlin with a drone. Is this enough to prompt Russia to leave the agreement? We will have the answer soon as talks are underway. In terms of prices, wheat has recovered a bit in Chicago to 650 cents a bushel while corn is stabilizing at 590 cents. |
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| Macroeconomics |
| Atmosphere: Investors were expecting a rate hike followed by a pause from the US central bank, and that is exactly what the Fed announced on May 3. Jerome Powell hinted that it might have to go back to the drawing board later on if inflation continues to bite, but investors are losing faith. For its part, the ECB gave a small turn of the screw to its own rates, but did not mention a pause. Christine Lagarde and her team still fear rising prices. Equity markets would probably be comfortable with the Fed's policy if not for the simmering banking crisis in the US. As soon as one regional bank is forced to fail by a bank run - with customers rushing to recover their assets and place them with a stronger intermediary - another bank is caught in a spiral of suspicion. This threat, combined with fears of recession, creates a rather anxiety-provoking climate. Currencies. Despite a few gaps in a narrow channel, the dollar has not moved much this week, at least on the surface. The Dollar Index (DXY), which measures the strength of the greenback against the euro, sterling, yen, Swiss franc, Swedish krona and Canadian dollar, fell by 0.2% to 101.28. The ECB's firmer stance on rate changes than the Fed has not really supported the single currency this week. On the other hand, the Australian dollar (AUD 1.486 to USD 1) logically gained ground against other currencies after the RBA's surprise decision to raise its key rate by a quarter point. The other winner of the week was the yen, which posted its first positive weekly performance in a month by taking advantage of its safe haven status in the face of the US banking turmoil, at JPY 134.14. The EUR/CHF is at 0.9833. Rates. This week saw many monetary policy decisions. The US Federal Reserve opened the ball last Wednesday with a 25 basis point increase in its key rate, followed closely by the European Central Bank the next day. While this was expected, the outlook expressed by Jerome Powell is nebulous to say the least. We were hoping for some clarification on the planned end of tightening, but we got what we deserved. Fortunately, the publication of the employment report last Friday, which came out well above expectations, brightened up a very gloomy week. Finally, the yield on the US 10 remains in a narrow range of 3.63/3.31%. Crypto. Bitcoin is just about balanced this week, still hovering around $29,000 at the time of writing. For its part, the ether is clearly outperforming the market leader by recovering more than 3% since Monday. However, still lacking strong positive catalysts, digital currencies remain globally dependent on economic conditions and will therefore remain sensitive to upcoming economic statistics. Agenda. On Monday, the London Stock Exchange will be closed for the coronation of King Charles III. The United Kingdom will see another, less rare, highlight on Thursday with the Bank of England's rate decision. In the US, April inflation figures (Wednesday) will dominate the week, along with April producer prices (Thursday) and the University of Michigan's consumer confidence index (Friday). |
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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. |
