No news, good news. The markets philosophically welcomed Frankfurt's decision which, for the third time in a row, left rates unchanged. Few expected the Central Bank to be ready for the first cut by reversing the policy of increases (ten in a row from 2022). Most economists now expect the first rate cut in June and no longer in March. Here's what Pimco, one of the market leaders, thinks: “Global inflation has already passed its peak and rates can start to fall. For 2024 we expect a rate cut starting from the second half of the year but with action on rates by the central banks lower than market expectations".
The US economy overwhelms China but Tesla and Intel are slowing down
Without major stimulus, European stock markets are expected to open flat. EuroStoxx50 Futures +0,1%. But the European blue chip index closed yesterday up by 0,4%, an extension that sees it remaining at very long-term highs driven by the continuous, impressive increases in the American economy which achieved a rise of 3,3%. 6,3% in the fourth quarter, much more than expected: The USA thus extends the gap with China: +4,6% against XNUMX%. Thus the prediction of an overtaking by Beijing vanishes.
Tesla and Elon Musk's warning
Wall Street applauds. The US stock market closed the sixth positive session in a row, despite not setting a new record. Two elements weigh on the market. The first: the alarm of Tesla which closed lower with stocks losing 12%, in what is the largest drop in a single session in a year. With the downturn, Tesla burns $80 billion in dollar capitalization. The braking afterwards the alarm raised by Elon Musk on electric cars Made in China and the warning of Tesla's "definitely" slower growth in 2024. The billionaire praised Chinese manufacturers and called them the "most competitive in the world." He then warned: “If trade barriers are not imposed, they will demolish most automakers” globally. Musk's reference is in particular to BYD, the giant that sees Warren Buffett among its shareholders and which has taken the scepter of queen of the electric world from his Tesla.
The second element: the double-digit splash of Intel. But the other "Big Seven" continue to sparkle: in the first four sessions Nvidia +8%, Alphabet +6%, Meta +4,5%, Apple +3%, Microsoft +2,8%, Amazon +3%.
Tech record also in Europe, banks are slowing down
Technology also gives a jolt to European stock markets. The EuroStoxx 50 index (yesterday +0,4%, 4.585) accumulated a provisional gain of +3%, a fraction of a point from the high of the last 23 years (4.593). Here too, the main credit goes to the techs. The Stoxx Tech index (yesterday +1,7%) closed at the highest level in over two years, with a nice boost that projects short-term objectives of around 7% above. The best of the week are Asml +20%, Nokia +10%, SAP +97%. Eurostoxx 50 to be monitored with great attention because an upward tear could occur in the event of a breakout.
Milan's FtseMib lost 0,6% Worth noting is the slowdown of Italian banks after the ECB, thanks to a report by Deutsche Bank.
Lvmh drags luxury into Europe
Brilliant start to session for European luxury stocks, driven by +8% of LVMH in Paris after the announcement of record results for 2023. Last year the French giant recorded sales of 86,2 billion, with a organic growth of 13 percent. The group achieved a net profit of 15,2 billion (+8%) and a current operating profit of 22,8 billion (+8%). “All businesses experienced strong organic sales growth over the year, except wines & spirits, which faced a high baseline and high inventory levels,” the company explained, highlighting revenue growth of 10% in the fourth quarter to $23,95 billion. The numbers, Equita analysts underline, are "above expectations thanks to greater organic growth and cost control".
GDP and bonds
On the bond front, little or nothing to report on the European front. Not even the US GDP data disturbed the recovery of the ten-year Treasury Note, whose yield rate fell to 4,09%, from 4,15%. In Europe: Bund 2,29% from 2,34%, BTP 3,82% from 3,89%.
Exor and the French lock down Stellantis
stellantis slightly decreasing in Piazza Affari (-0,13%) after the press reports on Exor (the holding company under Dutch law controlled by the Agnelli-Elkann family) which rises to 25,9% of the votes. Together with Peugeot and at the French state, Exor thus locks down control. In fact, a communication to the SEC shows that the holding company has increased its voting rights while maintaining a 14,9 percent share. The car manufacturer's statute provides a bonus in special voting shares for loyal members for more than three years: the Peugeot family and Bpi will also exercise the option by February by increasing their respective voting rights.
Superstar dollar, drop in US rates at risk
The dollar is moving towards its third positive week in a row (+0,6%) and is moving to its highest level in a month. The exceptional resilience of the United States economy risks postponing the first rate cut: this afternoon's data (14 pm) on the PCE price index, the inflation indicator preferred by the Fed, becomes even more strategic. "core" data, less volatile, should signal a further slowdown for December to +30% from +3,0%, at the lowest level in three years. The general figure may instead have remained unchanged at +3,2%
Asia, final week in red
This morning the downturn prevails in Asia. The series of six positive sessions of the MSCI Asia Pacific index is about to come to an end. Tokyo Nikkei -1,3%. Kospi of Seoul +0,3%. Mumbai's BSE Sensex -0,5%. Hong Kong Hang Seng -1,5%. Csi300 of the Shanghai and Shenzhen stock exchanges -0,2%. Chinese real estate stocks rise again, after starting to rebound during the week.
Oil at its highest since early December
Oil down slightly, from +3% yesterday ($82,20). Price at the highest since the beginning of December. We are about to complete the best week in about four months (+4,5%). Two reasons explain the rebound: 1) the exceptional resilience of the American economy, confirmed by GDP growth in the fourth quarter well above expectations; 2) the hope that the government's new interventions to relaunch the Chinese economy will soon bear fruit. The geostrategic issue plays a little less at this stage because the chances of the Gaza conflict spreading to the entire Middle East have remained unchanged.
Winter ends, gas at risk
The Bloomberg Commodity Index is flat at 98,7 USD, after four increases. EU natural gas (Amsterdam) closed down -4% at 27,80 euros/mwh, -2024% from the beginning of 16. A general increase in temperatures is expected in Southern Europe, while each passing week brings the end of winter, the most critical period for gas supply, closer. If the price remains below the discriminating threshold of 30 euros, there is a high probability of seeing it drop even up to 20 euros.
STM, braking continues. De' Longhi at full speed
New negative signals for STM: Barclays cuts to Equal Weight. Salvatore Ferragamo closed 2023 with revenues down 8,1% at constant exchange rates to 1,157 billion euros, substantially in line with expectations. The luxury company warned last night that the time to achieve its objectives could be longer than expected.
De' Longhi expects 'low to mid single digit' revenue growth at the current scope for 2024, after the robust organic growth recorded in the fourth quarter. In the last quarter of 2023, the revenues of the group active in coffee machines rose by 4,6% to approximately 1,077 billion, says the group active in coffee machines in a note which, in light of the progressive recovery of profitability over the of the year, now sees a 2023 adjusted Ebitda at the high end of the previous guidance. "We believe that the dynamics highlighted in recent quarters allow us to look to 2024 with cautious optimism."
