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| This week's gainers and losers |
Gainers: Roblox (+20%): The online gaming platform announced this week that its daily active users grew 24% year-over-year to 59.9 million at the end of August, with revenue taking the same slope. Netflix (+17%): The streaming content provider returned to subscriber growth, even signing up far more new customers than expected. Annual forecasts are more favorable than the market had feared. Intuitive Surgical (+14%): The U.S. specialist in robotic surgical aids jumped this week on the announcement of very strong financial results. Lockheed Martin (+13%): The U.S. defense group is on a roll and its results are strong. The geopolitical context offers a promising backdrop for companies in the sector.
Losers: Generac (-20%): The market was disappointed by the results of the autonomous battery specialist. The third quarter profits have been eroded and fall far short of analysts' forecasts. Growth forecasts have been revised downwards. Snap (-20%): Further disappointment on financial performance. The group warned that the year-end outlook will be less buoyant than expected. M&T Bank (-13%): The Buffalo-based bank reported results down from a year earlier, while analysts were expecting a turnaround. |
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| Commodities |
Energy: Oil prices have stabilized this week. The European benchmark, North Sea Brent, is trading around USD 92 per barrel, compared to USD 84 for US WTI. The Biden administration announced on Wednesday the release of 15 million barrels of their strategic reserves to partially offset the OPEC supply reduction. However, it should be noted that this is rather a non-event since these releases are part of Washington's plan to release a total of about 180 million barrels of their reserves. As for natural gas, prices continue to fall in Europe. The Rotterdam TTF is trading below EUR 130/MWh, after peaking at nearly EUR 350/MWh in late August. The European Commission is reportedly considering imposing limits on daily variations rather than a cap on gas prices. EU leaders also plan to encourage joint purchases between member states to limit competition in supplies. Metals: Base metals traded mixed this week. Lead and tin lost ground at USD 1990 and USD 18,900 respectively, while zinc and nickel stabilized at USD 2940 and USD 21,800. Copper is trading around USD 7560 per metric ton. The International Copper Study Group (ICSG) said in its latest report that the copper market deficit is expected to worsen this year to 328,000 tons, before becoming surplus by 2023. In precious metals, the ounce of gold is again trading at its lowest level of the year at USD 1620. Agricultural products: The UN was optimistic about the renewal of the Ukrainian grain export agreement, which is due to expire in November. As a result, agricultural commodity prices eased in Chicago, with wheat trading around 850 cents a bushel versus 680 cents for corn. |
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| Macroeconomics |
| Atmosphere: Very Bad Trip. The nightmare continues in Great Britain, with the resignation of Liz Truss after only a month and a half in office. This political instability is undermining the credibility of the country's political class at a time when it is facing a major crisis. In the US, macroeconomic data continued to blow hot and cold, which does not improve visibility. Finally, nothing very original came out of the 20th Congress of the Chinese Communist Party: global supremacy, Xi Jinping in the spotlight and little progress on the health strategy punctuated the week. Rates: Bond yields were curiously nonchalant at the beginning of the week, but that didn't last. Especially in the US, where levels not seen since the financial crisis were recorded: 4.28% on the 10-year, 4.40% on the 5-year and 4.55% on the 2-year. Financials are still betting on a recession and are having a hard time agreeing on the rate peak the Fed is considering. Perhaps because the US central bank itself does not know? In Europe, the resignation of Liz Truss has calmed Gilts. The Gilts are still quite high at 4.05%. The Bund is at 2.46% and the OAT at 3.02%. We also note that Greek debt climbed to 5.06% on 10 years on Friday. Currencies: Another complicated week for the yen, which continued to erode against the U.S. dollar. It now takes JPY 151.48 for a single greenback, which means that the Japanese currency has lost almost a third of its value in 2022 against the dollar. The Japanese Central Bank has already spent a lot of money to counter the slide, without success. The dollar continues to take everything in its path, forcing emerging markets to consume their foreign exchange reserves at a faster pace than in previous bouts of currency weakness. The EUR/USD is trading at 0.9774, while CHF 0.9862 is needed for EUR 1. Crypto-currencies: Bitcoin, down -1.50% since Monday, is still showing very low volatility this week, hovering around $19,000 at the time of writing. Its pursuer in terms of market capitalization, Ethereum, can't boast of doing better by shedding 2.30% this week and thus falling below the $1300 mark. Crypto-currencies are struggling to climb back up in a weakened economy that has little to no positive catalysts for risky assets. As a result, crypto aficionados must still wait. Calendar: It's going to get busy next week, with monetary policy decisions in the Eurozone (Thursday 27) and Japan (Friday 28). The first estimates of Q3 GDP for China (probably Wednesday 26) and the US (Thursday 27) will also be on the agenda. Other important statistics include the October PMI indicators (Monday 24th) and US PCE inflation (Friday 28th). To top it all off, the week will see the results of more than 300 companies from the S&P500 and Stoxx Europe 600 indexes (including Apple, Microsoft and Amazon in the US and Novartis, SAP or TotalEnergies in Europe). |
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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. |
