By
|
|
| This week's gainers and losers |
| Tops Nikola (+99%): The pause in the Federal Reserve's interest rate hikes allows the electric vehicle manufacturer to breathe a little. The heavily indebted and cash-strapped company is taking advantage of its high leverage, attracting daring traders. Additionally, the company benefits from a short squeeze effect: as the stock price rises, short sellers are forced to liquidate their positions. Thanks to this upturn, Nikola's position on the Nasdaq is no longer under threat, at least for now. Archer Aviation (+37%): The American specialist in electric vertical takeoff and landing (eVTOL) aircraft has appointed a new Director of Safety, Billy Nolen. The profile, expertise, and network of this former FAA (Federal Aviation Administration) administrator and avid eVTOL advocate have impressed investors. The company, which promises to commercialize its first electric aircraft in 2025, is also benefiting from upgrades in recommendations by some analysts. Xpeng (+31%): The Chinese electric vehicle manufacturer listed in New York is regaining momentum. After receiving approval from authorities, it launched its assisted driving technology in four Chinese cities, including Beijing, this week, with plans to expand to 10 more cities within the year. Investors are betting on this service to boost the group's sales, which have been severely impacted by competition from Nio and Li Auto. Xpeng also announced receiving 25,000 pre-orders for its new G6 SUV in just 72 hours. Virgin Galactic (+30%): Richard Branson's British space company soared this Friday after announcing the launch of its first commercial space flight, Galactic 01, between June 27 and 30. Three scientists from the Italian Air Force and the Italian National Research Council will board to conduct research. A second commercial flight is already announced for early August, before the start of monthly flights, at a cost ranging from $200,000 to $450,000. SoftwareOne (+25%): The software solutions provider is being courted by Bain Capital Private Equity. The American asset manager is offering CHF 2.9 billion (USD 3.21 billion) to acquire the Swiss group, representing a 33% premium over the closing price on May 31. The board of directors, considering the offer materially undervalues the company, has declined the advances. Geron Corp (-16%): The California-based biotech specializing in therapeutic products for cancer experienced a sharp decline after announcing that healthcare-focused investor HealthCor Management L.P. has sold 73.7% of its stake in the company, offloading over 1.4 million shares during the fourth quarter. Agilon Health (-17%): The healthcare company that empowers primary care physicians providing comprehensive healthcare services to seniors across various locations in the United States saw its stock drop after Evercore downgraded its opinion from buy to neutral on the stock. John Wiley & Sons (-17%): The American publishing house specializing in scientific journals, technical books, and academic publications revealed its results this week. While the profit showed a slight increase in the last quarter, the revenue declined. The company also unveiled a restructuring plan, including the divestment of non-essential education-related activities, which failed to convince the markets. CTS Eventim (-18%): Shares of the German company specializing in event management and ticket sales for cultural and sporting events declined after a satirical journalist from the ZDF television channel aired a critical investigation into the company's business practices, triggering profit-taking. Subsequently, other voices criticized the company's management, leading some analysts to downgrade their recommendation on the stock. |
|
| Commodities |
Energy: The International Energy Agency (IEA) released its latest monthly report this week. According to the report, the IEA expects slightly higher oil demand this year (with an increase of 0.2 million barrels per day), before tapering off in 2024 as the agency estimates a 0.9 mb/d slowdown in demand next year. Supply is also expected to increase this year, primarily driven by non-OPEC member production, as anticipated. In this regard, OPEC also updated its forecasts this week. The cartel generally maintained its outlook unchanged while highlighting, as usual, various risks to the supply-demand balance, such as geopolitical tensions and global economic slowdown. In terms of prices, Brent crude trades around $75 per barrel, while its American counterpart, WTI, stands at $71. Additionally, there has been a surge in European natural gas prices, with the TTF Rotterdam reaching 40 EUR/MWh this week (currently trading around 35 EUR). Norway, the primary supplier of gas to continental Europe, is facing leak issues and conducting maintenance on certain fields, resulting in decreased supply flows through Norwegian pipelines. Metals: The base metals sector saw a significant increase this week, except for aluminum, which remained around $2,200 at the London Metal Exchange. Despite mixed economic data from China, metals benefited from a renewed risk appetite following the Federal Reserve's decision to maintain interest rates. The sharp decline in the US dollar also contributed to supporting prices. In this context, copper rose to $8,500 per tonne, while nickel reached $22,700 and zinc climbed to $2,460. As for precious metals, gold stabilized around $1,960. Agricultural Products: The US Department of Agriculture (USDA) revised down its estimate for corn production in the United States. The USDA attributed this to the impact of dry weather, which could compromise a portion of the harvest. In Chicago, corn prices rose to 668 cents per bushel, while wheat made slight gains, reaching 630 cents. |
|
| Macroeconomics |
Environment: The stock markets continue to look away when the Fed waves its arms to announce that the inflationary threat has not disappeared. Nevertheless, the U.S. central bank chose to hold off on a rate hike in June while threatening to resume the tightening cycle as early as July, possibly for a second time this year. The bond market is more cautious (see below). The ECB, on the other hand, was less mysterious, making a quarter-turn in its rates to bring them to 4% and proclaiming that austerity is not over. Macroeconomic statistics remain weak on both sides of the Atlantic, but there is no visible rupture, so... Currencies: Central banks are still a topic here. The timing disparity between the Fed and the ECB is clearly evident in the trajectory of the dollar, which has fallen to 0.9140 EUR. The strength of the single currency is even more pronounced against the yen, which has fallen to its lowest level in 15 years. The Bank of Japan's consistently accommodative stance easily explains this. On Friday, the USD was trading at 141.8170 JPY. Rates: At the end of a week that could have been risky, central banks nevertheless played the expected tune, namely a status quo for the U.S. Federal Reserve and a quarter-point increase for the European Central Bank. Investors focused on the glass being half full, propelling the indexes, with Nasdaq leading the way, to new annual highs. However, the underlying message is more nuanced. The Fed and the ECB did not fail to alert the financial community to the persistence of "core" inflation, which could result in 1) a higher terminal rate than anticipated by the institutions themselves, and 2) an extended period of high rates. Similarly, some members of the Fed committee are beginning to believe that real rates (Fed Funds - CPI) should be close to 100 basis points to exert a lasting impact on inflation. While the stock indexes don't seem to care, the yield on the 2-year U.S. Treasury has indeed taken this information into account and continues to move towards its March highs at 5.08, while the U.S. cash 2/10 spread continues to sink into negative territory. Translation: rates continue to worry about a possible upcoming recession while the indexes act like the grasshopper. Crypto: For the third consecutive week, Bitcoin is declining and settling around $25,500, down 1.5% since Monday. Ether is suffering even more, falling nearly 5% over the same period and now hovering around $1,650. As long as the crypto asset industry remains entangled in regulatory issues on the other side of the Atlantic, with the SEC showing no signs of progress on this matter, Bitcoin and its counterparts will struggle to regain a short-term bullish momentum. Agenda: After a rather quiet start to the week, the macroeconomic calendar will intensify starting Wednesday with the release of the UK's annual inflation and speeches by U.S. Federal Reserve officials. Thursday will be a key day as the Swiss National Bank will conduct its monetary policy assessment and announce its interest rate decision. Following that, the Bank of England will follow suit by unveiling the results of the Monetary Policy Committee vote, the summary of monetary policy, and the official benchmark rate. In the U.S., a few statistics will also be released, including those related to jobless claims. Finally, on Friday, flash manufacturing PMI and flash services PMI data will be published in Europe, France, Germany, the UK, and the U.S. |
|
|
| Things to read this week | ||||||
|
|
*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. |
