When will the music stop?

It’s one of those Tuesday mornings after a long weekend in the US. One of those Tuesday mornings where we’re still wondering why we showed up yesterday, given that Europe is STILL slightly ahead of the US, looking to increase CAC by 0.28% and DAX by 0.31%. Since the beginning of the year, this theme has also been “2023 is the year of Europe. The answer, we will get to that later, but in addition, if the war in Ukraine stops and Zelensky replaces Van der Machin Truc in Europe, there is hope that Europe will become a new power in the global economy. In short, Europe rose without volume yesterday and today is another day.

January 17, 2023 vote

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We wouldn’t come

As always, the day after a long weekend in the US, you wonder why you came to the office on Monday. Well, I wasn’t there, but I still watched everything with one eye to say that I was right not to go. So we won’t bother to wrap up the day without much to talk about. It should be noted that Europe has paid a lot of attention to gas prices. Indeed, the latter have again lost more than 27% since the start of the year, and are light years away from where Putin decided to expand Mother Russia. Almost all investment experts welcome this situation and encourage each other about the future of the local economy. We are almost satisfied with the inflation figures even in Europe and everything is coming back as if nothing happened.

Meanwhile, let’s note that Switzerland ended its session with a bang and reached its highest level in a long time. Symbolically, the SMI crossed the 11,400 barrier for no particular reason, other than the fact that everything in the index is up… It inevitably helps. Nestlé was holding off on coffee, Novartis was up 2% and even Roche was up 1%, which is now rare enough to report. On the other hand, there was Temenos, which received almost 10% after a huge blow to management and rotten results. Clearly, investors are now inclined to look beyond the last quarter. And then there’s Credit Suisse, which raised Ypsomed’s target to 235 francs from 165 francs. Took 10% to mention the title.

let’s start the week

Now that this Monday is behind us, we can start asking ourselves questions about the week ahead. European indexes are in “unstoppable” mode, we understand that, but on the other hand, we still have to ask questions about American indexes. If we are to remain hopeful, the S&P500 will definitely need to break the 4,000 mark. As for the Nasdaq, it’s still a long way from its 12,000 target and overbought to find enough “niak” to get there on the first try. Unless Apple buys Alphabet and Microsoft merges with Amazon and Pfizer.

Therefore, we find ourselves dependent on the numbers for the next quarter. Starting this Tuesday, we’ll be dealing with Goldman Sachs and Morgan Stanley, then putting all our energy into the avalanche of economic numbers that will hit us between today and Thursday evening. Not forgetting the Bank of Japan, which will announce its plan to combat inflation tomorrow.

Heavy on the macro

Granted, there’s a lot of talk about the quarterly numbers – I’m talking about that a lot now – but there’s going to be some heavy macro stuff in the coming days. If we ignore the BOJ tomorrow, we’ll have to keep an eye on the NY Empire State Manufacturing Index, which will be released later this evening and may give some small indication of the health of businesses in New York State. And then we must not forget that this morning China published a mountain of economic numbers.

Broadly speaking, the yuan fell slightly after GDP, industrial production and retail sales data showed China’s economy growing significantly slower in 2022 than a year earlier. It’s not a surprise “monster” given the COVID episode they just went through. Anyway, the surprised economist must have been on vacation in Tahiti for quite some time and his Wi-Fi connected to data from the 80s. But all is not lost, because the economy has grown rapidly. December had a faster-than-expected pace in the fourth quarter, as industrial production and retail sales data also beat expectations. It’s just that the anti-COVID policy away from Xi is paying off and there is a glimmer of hope. China is currently expecting a BOJ sanction of 0.25%, Hong Kong 1% and Japan 1.3%.


Have I said enough, the BOJ will be there tomorrow and announce the anti-inflation plan??? yes?? Well, we can move on to the events of the week. In Europe tomorrow, we will face an avalanche of inflation numbers across the board, and given the drop in gas prices and the French government’s new relief measures for the most vulnerable households, eurozone inflation should be like its American cousin: it will melt like snow in the sun and then turtle up as Macron’s acting finance minister. will come to apply ointment to the TV.

And then it will be Thursday. Thursday should be an interesting day, as we start the day with Procter and Gamble’s numbers and end with Netflix’s numbers. Procter isn’t supposed to change the face of the world, but Netflix has this uncanny ability to move 20% in one direction or another every quarterly release. But above all, it will be Madame Brainard who will speak between the numbers of the Pampers manufacturer and the numbers of the series broadcaster who left one of the two series along the way without knowing how it ended.

Two numbers of the Fed

So yes, we generally like it better when Powell speaks because he’s still the boss, but if nothing else, we’ll be paying attention to the Fed’s second number, which boosts sentiment every time it talks about interest rates. anti-inflation policy. It’s unlikely he’ll come out next week to say he’s cutting rates and considering an armed coup to oust Jerome Powell, but it’s clear his speech could spice up the weekend. And especially to see if we can break the resistances with all this.

As you can see, the week will be interrupted by Martin Luther King, but the rest of the days will be busy and full of emotions. Oil is currently at $79.59, gold is celebrating a little while but remains very high, currently at $1,914 an ounce and bitcoin at $21,161, everyone is wondering if we are on the brink of an explosion and who will buy it. For $250,000 or this is the last run before the final collapse. Yes, because there aren’t many half measures when we look at 2023 predictions for Bitcoin. But at least it keeps us busy and we can talk about it over aperitifs on Thursday evening. And other days too, for that matter.

News of the day

There’s not a ton of news this morning, we’re focusing on China’s numbers and everyone’s thoughts are there. Meanwhile, the “Davos elites” tell us what they know better than us and what they should do in the future. They have already started making predictions, one of Citi’s top staff has already announced a recession in Europe. You can immediately see that risk taking is at its peak. But we also know that they are historically quite wrong in their predictions, but it’s fun to show them off in ski suits and moon boots.

For the rest, and in a series of “we like it when we joke”, the founders of Crypto Hedge Fund Three Arrows Capital, who have been on the run for a year – although they say they are not on the run and they are cooperating with the authorities, although the authorities are not aware of their cooperation or where they stand on the matter . Well, this team is launching a new platform where they plan to buy back the debts of investors who have been ripped off in cryptocurrencies at cheap prices… Simply put, if you have a $100,000 block in FTX because you generously participated in the payment. From the SBF bond, you can sell your claim for 10% of its value to the guys from bankrupt Three Arrows Capital and they will try to negotiate a little more recovery. The best thing is that everything in this world is moving so fast that we no longer know who is a former cheater and who is a future cheater, even though sometimes it is the same.

Numbers of the day

As for this morning’s numbers, there will be CPI in Germany, unemployment in the UK and ZEW in Germany. Europe will also have ZEW and tonight, as already announced, we will have figures from the New York Empire State Manufacturing index, as well as Goldman Sachs and Morgan Stanley. Right now futures are next to nothing and tomorrow will be another day.

All I have to do is wish you a very nice day, stay strong and see you tomorrow!!!

Thomas Veillet

“Life is really simple, but we insist on making it complicated. – Confucius

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