Weekly Market Update: Back to Reality

0







Financial markets lost ground again this week amid renewed concerns over central bank policies and a slowing global economy. Jerome Powell’s speech at the Jackson Hole symposium sparked volatility as the Fed Chairman confirmed that monetary tightening would continue in the coming months to rein in inflation, despite the expected slowdown in US growth.

This week’s winners and losers

Top winners:

Micro focus (+83%): the best choice of the week. The British software publisher, which offers a range of business management tools, has agreed to be acquired by the Canadian Open Text for nearly twice its share price.

Snowflake (+27%): One of the rising stars of American technology has published better than expected quarterly results. The cloud data management specialist received an unexpected boost as, meanwhile, figures from Salesforce and Splunk, released on the same day, disappointed.

Aveva (+22%): Schneider Electric was forced to confirm that it was again considering buying out the minority shareholders of the British company, after information leaked to the press. It’s an old story that comes up regularly, but it seems more and more obvious that the French company has no real interest in maintaining its listed subsidiary.

CF Industries (+14.28%): CF Fertilizers, a subsidiary of CF Industries Holdings, has announced plans to temporarily halt ammonia production at its Billingham complex as it is “unprofitable” at current gas prices natural and carbon. It intends to import ammonia in order to keep its ammonium nitrate and nitric acid upgrading plants in operation.

Apa Corporation (+10.53%): The hydrocarbon exploration and production specialist announced a first discovery in Block 53, off Suriname. Investors are delighted with this discovery and the share price is rising.

Top losers:

Padaya (-26%): The Israeli fintech recently listed in the United States has been falling since the beginning of the week, after having soared since the beginning of July. During its young trading life, the company went from $2.42 to $34.50.

ocado (-15.9%): The group’s loss in the first half increases due to the costs of deploying the intelligent platform and the company is underperforming operationally.

Enlarge video (-14%): The American group disappointed investors with its quarterly figures, marked by a churn rate which remains high and conversions to paid versions which are declining.

Advanced auto parts (-13.89%): North America’s largest auto parts distributor announces lower forecast for 2023 and reports below analysts’ expectations.

dollar tree (-11%): The discount chain has revised its annual forecasts downwards, both for sales and for results. The company is affected by the economic downturn and inflation. At the same time, the CFO will step down.

Goods
Energy: OPEC statements paving the way for a possible production cut, as well as the progress of negotiations on the Iranian nuclear agreement, have caused oil prices to rise and then fall. Both of these catalysts are clearly being watched closely as they have a direct impact on the direction of global supply. Brent is currently trading near $100 a barrel, while WTI, the US benchmark, is trading around $93. WTI’s discount to Brent facilitates US crude oil exports as well as petroleum product exports. In Europe, where the Dutch TTF has reached a new high of 320 EUR/MWh, the pressure on natural gas is not easing.

Metals: With the exception of lead which fell back to 1976 USD per ton this week, the prices of industrial metals rose this week. On the LME, copper is trading around USD 8150. According to the latest monthly report from the International Copper Study Group (ICSG), the copper deficit increased from 34,000 to 66,000 tonnes between May and June. Gold has stalled and is currently trading around $1,750 per ounce.

Agricultural production: The drought does not only affect Europe. Heat waves are also affecting the United States and China, potentially reducing yields of water-intensive crops such as wheat and corn. Corn and wheat are trading at 792 and 655 cents a bushel respectively in Chicago.

Commodity Chart
Macroeconomics
Atmosphere: Do not dream. Those expecting the Fed to make pro-market statements in Jackson Hole on Friday will be disappointed. Despite the first signs of easing inflation and somewhat weak macroeconomic data in the United States, Jerome Powell does not relax his guard and continues to emphasize that rate hikes are still necessary to contain prices. We went from whatever it took to keep the economy afloat to whatever it took to slow it down, which is painful. Soaring energy prices constitute a systemic risk for European political and monetary authorities. The PMI indicators published this week indicate that the fall will be difficult.

Rates: In the US, the yield curve is still inverted, with 10-year debt yielding 3.02% versus 3.20% for 6-month debt. The prospect of interest rates remaining high for a longer period than expected, as Powell suggested in Jackson Hole, raises concerns about an extended period of economic downturn. In Europe, the German Bund lost 1.38%, the French OAT lost 2.01% and the Italian BTP lost 3.68%.

Currencies: The energy crisis in Europe, combined with the Fed’s position, pushed the euro below parity with the dollar at the start of the week. The euro finally recovered around 1 USD. Finally, the Dollar Index, which compares the US currency to six benchmark currencies, lost ground compared to the previous weekend while remaining high. EUR/GBP is at 0.8495, while EUR/CHF is at 0.9633.

Cryptocurrencies: Bitcoin has continued its downward trend since last week, falling more than 3% since Monday and hovering around $21,000 at the time of writing. Risky assets are struggling to regain ground in a persistently tense macroeconomic context, notably orchestrated by central banks and their fight against hyperinflation, especially since crypto-currencies are still very sensitive to macroeconomic announcements. As a result, institutional, professional and retail investors seem hesitant to re-enter the volatile digital asset market.

Calendar: Germany will publish its preliminary inflation rate for August on Tuesday. The following day, France and the euro zone as a whole will be in the spotlight. In the United States, all eyes will be on the August unemployment figures, which will be released on Friday. No, you are not hallucinating; there is no line from the central bank this week. But don’t worry, some members of the Fed will continue to speak out in the coming days.

Historical table
Back to reality

The main European stock indices ended the week on a negative note. Jerome Powell spoke at the Jackson Hole Symposium on Friday. Stock markets were set to listen to the speech of the President of the Central Bank of the United States after a week of frantic anticipation. As the world grapples with mounting inflationary pressures that threaten growth, Powell insisted the Fed would do whatever it takes to regain control of inflation, even if that means pushing interest rates higher. into restrictive territory and thus push the economy into recession. Nothing new per se, but the market, as is often the case, expected more. Good luck to all investors this weekend.

To read this week
Walt Disney Company (The): Light Side of the Force
Walt Disney Company (The): Light Side of the Force
Streaming is the new normal Everyone in the industry has been moving to streaming: Apple, Amazon and now Disney for a few years. It took Disney less than 3… Read More
Outperform in downturns
Outperform in downturns
In times of high inflation like the one we are currently experiencing, supported by rising energy and commodity prices, it is naturally more reassuring to seek… Read more
Paramount: Once Upon a Time in the West
Paramount: Once Upon a Time in the West
A changing market Disney, HBO and Paramount are all gaining market share on Netflix. These companies that were losing… Read more
*The weekly movements of the indices and shares displayed on the dashboard relate to the period from the opening 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 relative to a sliding period of 7 days from Friday to Friday, until the time of sending of this newsletter. These assets continue to trade over the weekend.

MarketScreener.com 2022

5:37 p.m. Mexican airline Volaris fires pilot who recorded near miss

RE

5:36 p.m. Amplify Energy Reaches Settlement with U.S. Attorney’s Office to Address Issues Related to Southern California Pipeline Incident

QA

5:35 p.m. Danavation Announces Closing of Second Tranche of Private Placement of Units and Conversion of Promissory Note

NOT

5:34 p.m. JUPITER WELLNESS, INC. : Entering into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Financial Statements and Supporting Documents (Form 8-K)

QA

5:34 p.m. INMED PHARMACEUTICALS INC. : Material Change in Rights of Security Holders, Disclosure of Regulation FD, Financial Statements and Supporting Documents (Form 8-K)

QA

5:33 p.m. WISA TECHNOLOGIES, INC. : entering into a material definitive agreement, termination of a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, unregistered sale of equity securities , Change of Directors or Principal Officers, Financial Statements and Exhibits (Form 8-K)

QA

5:33 p.m. XPERI HOLDING CORP : Regulation FD Disclosure, Financial Statements and Exhibits (Form 8-K)

QA

5:31 p.m. HAL TRUST : Review of the first half of 2022

COULD

5:31 p.m. Prodigy Ventures Inc. Reports Impairmented Second Quarter 2022 Results

QA

5:30 p.m. Dogecoin was down 5.19% to $0.066 as of 5 p.m. ET – Data Talk

dj

Share.

About Author

Comments are closed.