Weekly market update : One record after another

While Wall-Street set yet another record this week, despite tensions on the bond market, Europe appeared more hesitant. Luxury goods and the automotive sector in particular did well there, but financial stocks suffered heavy losses. In the absence of a macroeconomic catalyst, volatility has disappeared somewhat. US inflation data could be crucial next week.

Weekly variations* US 500 5026  +1.37% ENPHASE ENERGY, INC. +20.35% RALPH LAUREN CORPORA... +18.43% MONOLITHIC POWER SYS... +18.31% EXPEDIA GROUP, INC. -13.20% AIR PRODUCTS & CHEMI... -14.85% FMC CORPORATION -15.76% DOW JONES INDUST... 38671.69  +0.04% NASDAQ 100 17962.41  +1.81% FTSE 100 7572.58  -0.56% GOLD 2024.32$  -0.74% WTI 76.47$  +5.07% EURO / US DOLLAR 1.08$  +0.06%

This week's gainers and losers

Up: ARM Holdings (+60%): The British chip designer, which went public on Wall Street last year without making too much of a splash, has just received its little "AI" label, after surprisingly robust results propelled by, you guessed it, artificial intelligence. The market thinks it has found its new golden goose. The stock rose by a probably unreasonable 48% on Thursday alone. Palantir (+44%): The US consulting firm is something of a UFO on the landscape. Already courted by investors, the stock surged with the announcement of its first earnings in 2023. The market may well be wondering about the discrepancy between a stratospheric operating margin and a minuscule net margin. But for the time being, investors don't really care about the bottle, as long as they can get drunk. Confluent (+31%): The designer of data infrastructure saw its stock price jump as analysts raised their price targets on the stock in response to the company's Q4 results, which exceeded expectations. The company reported non-GAAP earnings of $0.09 per diluted share, a significant improvement from a loss of $0.09 a year earlier. Revenue also increased to $213.2 million from $168.7 million. The positive financial performance and the optimistic outlook provided by analysts contributed to the surge in Confluent's share price. Monolithic Power(+18%): Monolithic Power Systems' shares rose following the company's forecast for current-quarter revenue that exceeded estimates. The company is benefiting from increased demand for its power control modules used in artificial intelligence applications. Monolithic Power expects first-quarter revenue between $437 million and $457 million, surpassing the estimated $430.8 million. The company's Q4 revenue was $454 million, slightly above the expected $452.1 million, with significant growth in its enterprise data segment. Walt Disney (+14%): The group nailed the critics by publishing solid results and multiplying its initiatives. Disney invested in Epic Games, launched a sports platform with Fox and Warner, and reassured on the prospects of Disney+. The dividend was raised and the share buyback program was strengthened. A good week for the Group. Down: Snap (-35%): The stock fell by 35% in Wednesday's session alone, after fourth-quarter sales fell short of Wall Street expectations. Snap is suffering from comparisons with big platforms like Meta and Alphabet on the advertising front. Figures released by Pinterest on Thursday evening seem to confirm that the industry giants are capturing more budgets than their smaller rivals. PayPal (-10%): The mother of all fintechs is struggling to get back on track in the face of fierce competition. Performance and outlook are disappointing. Morgan Stanley believes that the group is moving too slowly on its transformation initiatives. Everest group (-8%): Shares fell as the company's Q4 revenue failed to meet analysts' expectations. Despite reporting a significant increase in earnings per diluted share, from $12.66 to $18.53, the revenue of $3.66 billion for the quarter was below the anticipated $3.73 billion. This revenue miss has led to a decline in the company's stock price.

Commodities

Energy: Oil continues to yo-yo as crude prices alternate between rising and falling. This week, it rose. The context remains uncertain in the Middle East, with Israel's rejection of a ceasefire offer in Gaza and the US elimination of pro-Tehran groups in Iraq. At the same time, the US Energy Agency revised its production outlook for 2024 and expects it to peak below 13.3 million barrels per day. On the price front, Brent crude oil climbed back above the USD 80 mark, to USD  81.7, while US WTI is trading at around USD 76.50. As for natural gas, the European benchmark continues to lateralize at 27 EUR/MWh for the Rotterdam TTF. Metals: Industrial metals ended the week in mixed order. Aluminum and tin gained ground, while copper, zinc and lead retreated. In London, a tonne of copper traded at around USD 8,200, penalized by the rise in the US dollar, but also by the increase in production in Peru, the world's second-largest producer. In precious metals, gold is treading water at USD 2025, silver is losing ground at USD 22.50 and palladium continues its decline to USD 870. Agricultural products: Chicago remains depressed, with grain prices continuing to fall. The latest report from the US Department of Agriculture doesn't change the situation, on the contrary, as the USDA has revised upwards its stock forecasts for wheat and corn due to weaker domestic demand. A bushel of corn is trading at around 435 cents. Wheat is trading at around 600 cents.

Macroeconomics

Atmosphere: Move along, there's nothing to see. In the absence of major events, and after the central banks, investors had little in the way of juicy statistics to sink their teeth into. We'll just dwell on the US activity indices, the S&P Global US Services PMI and the ISM services index, which came out above the 50 contraction zone. In other words, all is well, and the narrative of a soft landing for the US economy still holds sway. As a result, the US 10-year yield remained relatively stable within a horizontal consolidation channel of 3.85% and 4.23/25%. Elsewhere in the world, Chinese consumer prices fell by 0.8% in January, a sign that the world's second-largest economy is still convalescing. So far, initiatives by local authorities to kick-start the economy have proved futile or limited. Crypto: Bitcoin soared by more than 11% this week and is now in contact with 47,500 at the time of writing. Ether is following the same trend, up almost 10% since Monday, and back above the $2,500 mark. This rise of crypto-assets is part of a return of investors' appetite for risk, as evidenced by the all-time highs on US stock indices. The Bitcoin Spot ETFs, launched on January 11, continues to attract large numbers of investors. The BlackRock ETF (IBIT) raised almost $3.5 billion and the Fidelity ETF (FBTC) around $2.81 billion since their introduction to the market. February 8 was particularly successful for these funds, with BlackRock recording $204.1 million in inflows and Fidelity a $128.3 million inflow into its ETF. These figures testify to the interest and speculation shown by investors in recent days.

One record after another Next week's earnings calendar includes a number of high-profile names, such as Coca-Cola, Shopify, Michelin, Heineken, Airbus, Capgemini, Schneider, Deere, EssilorLuxottica, ENI, Safran and Stellantis. After a relatively quiet period, macroeconomic data also resurfaced, including January inflation and producer prices in the US and various confidence indices (Empire State, Philly Fed, University of Michigan). In Asia, the Lunar New Year will disrupt the trading calendar. Shanghai will not reopen until February 19, and Taiwan on February 15. Hong Kong takes a break for two sessions, then resumes on February 14. In Seoul, only Monday will be off. Resumption on February 13. No trading on Monday in Japan either, which celebrates its founding day. Have a good weekend.

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.