Financial markets rose again this week, welcoming the further deceleration in inflation on both sides of the Atlantic, which fuels hopes of a fall in the cost of money by the end of the first quarter of 2024. As the holiday season approaches, risk appetite appears to be intact for the time being, with Wall Street moving a little closer to its all-time highs after a fiery November.
Weekly variations*
36245.50  +2.42%
15997.58  +0.10%
Chart NASDAQ 100
FTSE 100
7529.35  +0.55%
Chart FTSE 100
2071.39$  +3.45%
Chart GOLD
74.33$  -1.75%
Chart WTI
1.09$  -0.55%
This week's gainers and losers
  • ImmunoGen (+83%): Consolidation in the pharmaceutical sector continues! US drugmaker ImmunoGen has agreed to be acquired by research-based pharmaceutical specialist AbbVie for $10.1 billion. AbbVie has thus strengthened its portfolio of cancer treatments, notably by acquiring Elahere, a blockbuster drug approved for ovarian cancer. The transaction is expected to close in mid-2024.
  • Affirm (+31%): The US specialist in deferred payment and e-commerce solutions is riding on the momentum generated by the Black Friday and Cyber Monday shopping holidays. The use of BNPL (Buy Now, Pay Later) systems in the US hit a record high on Monday, with $940 million spent online, up 42.5% on the previous year. In the wake of this, Jefferies raised its recommendation on the stock. 
  • PDD Holdings (+24%): The parent company of Pinduoduo, the US-listed Chinese e-commerce giant, is doing much better than expected. Quarterly revenues were up 94%, exceeding analysts' forecasts by over $2 billion, and net income was up 37%. These results were underpinned, among other things, by the recovery of the Chinese economy and the fine performance of Temu, an international marketplace that is a big hit on app stores. 
  • Rolls-Royce (+14%): The British aircraft engine manufacturer maintained its forecasts for fiscal 2023, expecting operating profit of between 1.2 and 1.4 billion pounds, and presented its medium-term financial objectives (2027-2028). These include an increase in operating margin to 13%-15% and the disposal of 1 to 1.5 billion pounds worth of assets. Among other things, the Group plans to withdraw from Rolls-Royce Electric, its flying cab and electric aircraft business.
  • Salesforce (+12%): The American software company is doing well. Last quarter, revenues (up 11%) and profits exceeded expectations, driven by the services division. The company also published an encouraging outlook for the fourth quarter (forecasting 10% revenue growth) and raised its full-year targets for the second time this year. Many analysts, including Morgan Stanley, Evercore, Wells Fargo and Deutsche Bank, have raised their price target on the stock.
  • General Motors (+12%): Four pieces of good news for investors in the American carmaker. Firstly, the group has decided to pamper its shareholders by increasing its dividend by 33% in 2024 and by carrying out an accelerated share buyback of $10 billion. Secondly, it has announced that it is halting the activities of Cruise, its autonomous driving and robot-taxi subsidiary, in the United States after a series of accidents. This will save money and finance the wage increases promised after strikes in the sector. The group is also expecting solid profits this year, and has announced that it has won a 10-year production contract from the US State Department for the delivery of an armored SUV.
  • Snap (+10%): Shares in social network Snapchat surged on the back of a change in recommendation by Jefferies, which raised its rating on the stock from neutral to buy and its price target from $12 to $16. The analyst praised the platform's efforts to improve profitability and advertising revenues, as well as its partnership with Amazon. As a reminder, last month the group unveiled a surprise adjusted quarterly profit and an increase in daily active users. The share price has risen by 54% since the start of the year.
  • Dr. Martens (-13%): The British brand of leather boots is struggling. Sales in the United States and Asia are down sharply (-18% and 10%), despite new store openings, which cannot be offset by the brand's good health in Europe. As a result, this week the Group issued its fourth profit warning in 12 months, and cancelled its revenue forecasts for fiscal 2025. 
  • Jabil (-12%): The US electronics manufacturing solutions provider has lowered its revenue outlook for the current quarter and financial year, due to lower demand. It now expects sales of $8.3 to $8.4 billion for the first quarter and $31 billion for the full year, below analysts' expectations. 
  • Pure storage (-10%): The US technology company specializing in data storage disappointed. Quarterly sales rose by 12.8%, but fell short of analysts' expectations, who also deplored the company's timid forecasts for the next quarter and the full year. As a result, several analysts have revised their recommendations downwards.
Chart Commodities
  • Energy: This week, the focus was on OPEC+, as the enlarged cartel met on Thursday to set production targets for 2024. Initially scheduled for last week, the meeting had been postponed due to disagreements between certain countries over production quotas. So, after lengthy negotiations, the leader of the enlarged organization, Saudi Arabia, succeeded in mobilizing its allies around new production reduction measures. In a press release, OPEC detailed the cuts made by its members: 1 million for Saudi Arabia, 500,000 for Russia, 223,000 for Iraq, 163,000 for the United Arab Emirates, 135,000 for Kuwait, etc. Oil prices have shown little reaction to this additional effort, for the simple reason that these cuts are theoretical and difficult for some countries to implement. Let's not forget that some producers, such as Iraq and Nigeria, produce more than their quotas. In terms of prices, Brent crude is trading at around USD 81.40, while WTI is trading at around USD 76.60.
  • Metals: Copper continues to perform well in London, approaching the USD 8,400 line on supply concerns due to production disruptions in several South American countries, notably Panama and Peru. Precious metals, too, were on the move again this week. Proof of this is the fact that the ounce of gold is trading above the USD 2,000 mark, a level which has proved to be a resilient barrier on several occasions this year. Declining inflation and easing bond yields are making gold more attractive.
  • Agricultural products: Ukraine is back in the spotlight with the latest report from its Ministry of Agriculture. The report shows a 38% year-on-year increase in the country's grain harvests. Corn harvests were the main cause for concern, with year-on-year growth reaching 84%. In Chicago, a bushel of wheat gained a little ground at 600 cents, while corn fell back to 480 cents.
Chart Commodities
  • Atmosphere: Focus on rate cuts. Without a doubt, November will go down in the history books as a banner month. The stock market rallied strongly on the back of a narrative that continues to revolve around falling inflation, a return to more accommodative monetary policy from the end of Q1 2024, and a soft landing for the US economy against a backdrop of AI-generated productivity gains. The latest inflation figures tend to confirm this optimistic scenario: deflated Core PCE came out in line with expectations at 3.5% year-on-year vs. 3.7% the previous month, pushing bond yields down a little further. The US 10-year is heading for 4.10%, while the German bund, after hitting the 3.01% target, has just broken its 200-day moving average at 2.55%, against a backdrop of bearish mathematical indicators pointing to a decline towards 2.18%. The past week has seen European inflation slow more rapidly than expected, reawakening the prospect of a rate cut on the Old Continent, where only the US seemed concerned in the short term. On this subject, don't miss the interview with Christophe Barraud, an excellent forecaster, who believes that the ECB will cut rates as early as April. You'll find the link at the end of this newsletter.
  • Crypto: Bitcoin is on course for its seventh consecutive week of gains, rising from $27,000 to over $38,000 in the process. Since Monday, it has risen by over 2%, while ether, the second most valuable cryptocurrency on the market, is up by less than 1% at the time of writing. The forced departure last week of the CEO of the world's largest cryptocurrency platform, Binance, definitely had no direct impact on the BTC price, which it might have done given the importance and influence Changpeng Zhao had on the crypto ecosystem. In the end, bitcoin closed November at +8%, up more than 130% since the start of the year. The digital currency still needs to rise by 80% before it can reach its all-time highs of $69,000 in 2021.
Historical Chart
Christmas in November
At the risk of sounding like a broken record, December is the best month for investors who want to rely solely on statistics. Over the last 95 years in the United States, nearly 73% of December months have been positive. Will this bias continue this year? In any case, the indices got off to a flying start in November. But the environment remains favorable for equities, which are relying heavily on the switch to lower rates in the relatively near future. The macroeconomic agenda will be dominated by November's US employment figures, on Friday. Chinese indicators (services PMI on Tuesday, credit figures on Wednesday and inflation on Friday) will also be closely scrutinized. The calendar of corporate results is very sparse: chip giant Broadcom and sportswear specialist Lululemon will dominate the news. Until then, we wish you a pleasant weekend.
Things to read this week
A war for AI talent in the banking sectorA war for AI talent in the banking sector
Service automation, operational efficiency, cost reduction and headcount rationalization, customer service and support, investment optimization, identification... Read more
"In the US as in Europe, inflation will converge towards 2.5% in Q3 2024" Christophe Barraud
What should we keep an eye on in terms of geopolitics? In 2024, it's the US elections that will dominate global geopolitics. If Donald Trump is elected, it... Read more
Charlie's with the angelsCharlie's with the angels
Known for his financial wisdom and insightful aphorisms, Munger left an indelible mark on the investment world. Born in 1924, he joined Berkshire Hathaway as... Read more
*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.