The main threat is not always the one we anticipated. I used the monthly Bank of America survey of a large panel of institutional investors to refresh my memory. At the beginning of November, professionals cited inflation at 33% as the biggest risk weighing on the markets. Rate hikes were in second place (22%), ahead of China (20%) and speculative bubbles on certain assets (16%). Only 5% of investors cited the coronavirus as the major risk at present. Of course, we will have to wait for the dust to settle, but the return of the pandemic to the front of the stage is indeed the determining factor of this end of November on the stock market, and could be that of the end of the year depending on the turn. taken by events.
To summarize, a new very mutated and very contagious version of Covid-19, called B.1.1.529 has been discovered in Botswana and South Africa. It has also reportedly been identified on at least one person in Hong Kong from South Africa. To avoid the disastrous Indian precedent (many countries had been slow to put in place restrictions vis-à-vis India when the epidemic had exploded in the country), some states have already cut ties with South Africa, like the United Kingdom and Singapore. We’ll see if mainland Europe waits weeks to do the same. In the absence of additional information, it is difficult to form an opinion, but the markets have chosen to play it safe, which explains the large releases observed in Asia this morning, and in Europe in turn. For a digest of information on what we know about the variant, check out this excellent summary from Heidi News.
The Financial Times, based on official data, produced this fairly suggestive graph of the rapid development of this new variant (original article here)
Wall Street was closed for Thanksgiving yesterday and will only open for half a session today (closing will be at 1:00 p.m. local time, which is 7:00 p.m. Central European Time). To be honest, I find it hard to see how the US markets could not be washed away with the bathwater. The sanctuaries of the day are elsewhere, in the dollar and in gold in particular, even if the reactions are quite modest for the moment. But that does not mean that the movements will not increase: investors seem a little slow to relax, perhaps because the Americans had a bombing yesterday and they had to sleep their excesses. The two assets that have moved the most this morning excluding Asian equities are oil, which lost all of its gains for the week, and government bonds, whose yield fell sharply (-9 points for the 10-year US) in the The reason is that a further marked deterioration in the health situation could force central banks to slow down the normalization of their policies.
In any case, the return of the pandemic to the front of the stage brings up the specter of restrictive measures and its attendant uncertainties, despite the experience acquired over the past 21 months. It also forces us to think again about allocations, risks and exposures even if I repeat it, one should not draw too hasty conclusions until the scientists have not better understood B.1.1.529.
European leading indicators are clearly bearish this morning, for the aforementioned reason. In Asia, Japan and Hong Kong lost more than 2% to end the week, while Sydney fell just less.
The economic highlights of the day
On the program this morning, the French consumer confidence index for November (8.45 a.m.), Swiss GDP for Q3 (9.00 a.m.) and M3 money supply for October (10.00 a.m.).
The euro stabilizes at $ 1.1221, while an ounce of gold once again approaches $ 1800. Oil slumps heavily to $ 80.20 Brent and $ 76 WTI. The remuneration of sovereign debts fell sharply, to 1.56% for the 10-year US and -0.25% for the German Bund. Bitcoin lost 2% again and fell back below $ 58,000 per unit.
The main changes in recommendations
- Aperam: AlphaValue goes from lightening to accumulating by aiming for 53.70 EUR.
- Bureau Veritas: AlphaValue will remain light with a target price reduced from 26.80 to 26.70 EUR.
- EQT: Jefferies remains to be held with a price target raised from 445 to 530 SEK.
- HomeToGo: Baader Helvea starts buy tracking by targeting EUR 10.50.
- Inchcape: Jefferies remains for the purchase with a price target raised from 1090 to 1140 GBp.
- ING Groep: Goldman Sachs moves from buy to neutral targeting EUR 14.50.
- Johnson Matthey: Morgan Stanley switches from overweighting to online weighting targeting 2400 GBp.
- Medios: Berenberg remains for the purchase with a price target raised from 50 to 56.50 EUR.
- Miliboo: GreenSome Finance remains long with a target lowered from 9.42 to 8.11 EUR.
- Rémy Cointreau: Jefferies remains to be retained with a price target raised from 180 to 205 EUR. Credit suisse is raising its target price from 162 to 185 EUR. Berenberg remains to be held with a price target raised from 158 to 208 EUR.
- SSE: RBC goes from outperformance to sector performance by targeting 1800 GBp.
- Swiss Life: AlphaValue goes from reducing to accumulating by targeting 561 CHF.
- Zalando: LBBW starts buy tracking by targeting 85 EUR.
Important (and less important) announcements
- Saint-Gobain’s board of directors is co-opting Lina Ghotmeh, a Franco-Lebanese architect, as an independent director.
- STMicroelectronics signs an R&D partnership with the Singapore SIM.
- French fishermen plan to block the Channel Tunnel (Getlink) as part of the Franco-British conflict.
- Eiffage Construction & Pradeau Morin win the rehabilitation of 7 historic buildings of the Banque de France.
- Gaussin creates a joint venture with Nexport for the Australian market.
- Mammorisk (Predilife) fully reimbursed for Allianz France employees.
- Antevenio becomes ISPD Network.
- Safe Orthopedics is selling its 20,000th kit and plans to launch its Sycamore treatment in early 2022.
- Carbios receives support from the European Commission through the LIFE program.
- IPA sells its ABC Arbitrage securities to Financière WDD at EUR 7.085 each.
- Quantum Genomics enters into exclusive licensing agreement with Teva Israel.
- The Toques Blanches du Monde go into continuous listing.
- Groupe Parot, Laurent-Perrier and Miliboo have published their accounts.
In the world
Important announcements (and others)
- Infineon appoints Jochen Hanebeck, its COO, to succeed Reinhard Ploss as new CEO on April 1, 2022.
- KKR and CVC Capital are said to be in talks for a joint offer on Telecom Italia, according to Bloomberg.
- Software AG would be for sale for around € 3 billion, according to Bloomberg.
- Vista will buy Blue Prism at 1200 GBp per share.
- Tesla plans to increase the capacity of its Shanghai plant by investing $ 188 million.
- BHP extends expiry of offer to acquire Canadian miner Noront Resources.
- The Chinese government is taking over the football stadium from China Evergrande Group with the aim of reselling it, according to Reuters.
- Sandvik to acquire Canadian company ICAM.
- SGS acquires Canadian company Sulfur Experts.
- China asks Didi to withdraw from the rating in the United States.
- Main results publications : Meituan, Pinduoduo, Elia, Dottikon…