Central bankers' speeches on the need for further monetary tightening caused some concern this week, resulting in a mixed close for financial markets. Volatility could resurface at any time as the specter of a global recession still looms and financial markets have risen sharply in recent months.
Weekly variations*
DOW JONES INDUST...
33745.69  -0.01%
Chart DOW JONES INDUST...
NASDAQ 100
11677.02  -1.18%
Chart NASDAQ 100
FTSE 100
7385.52  +0.92%
Chart FTSE 100
GOLD
1749.85$  -0.77%
Chart GOLD
WTI
80.15$  -10.65%
Chart WTI
EURO / US DOLLAR
1.03$  -0.09%
Chart EURO / US DOLLAR
This week's gainers and losers

Gainers:

  • Tencent, which like other Chinese technology stocks, has benefited from a strong buying trend after recent lows in Hong Kong recently. It gained 27.5% over the week.
  • Sea Limited: It rose 18.5% this week following Tuesday’s announcement of its third-quarter financial results, after the company said it will renew its focus on profitability instead of outright, blistering growth.
  • Ross Stores: The retailer's stock rose 14.3% this week after announcing a profit above analysts' expectations in the third quarter.
  • BAE Systems, the British aerospace and defense specialist, reiterated its annual forecast in a favorable environment for companies in the sector. The group is also on the lookout for acquisitions. +7.2%

 

Losers:

  • DLocal Limited, the Uruguayan fintech listed on Nasdaq, is facing headwinds. The well-known short seller Muddy Waters published a study that found the company to have fraudulent characteristics. Immediate punishment -53.7%
  • Research firm Jefferies believes that despite the latest fundraising, Aston Martin will still need to find new money, probably in 2024, to get the company back on track. This potential source of dilution does not sit well with the market. -17.1%
  • Zoominfo Technologies, the U.S. sales and marketing information specialist, stalled after management revealed signs of slowing and a weaker-than-expected conservative outlook for 2023. -19.6%
  • And unsurprisingly, Coinbase, the Nasdaq-listed cryptocurrency trading platform, is caught up in the industry shockwave caused by the FTX bankruptcy. It gave up 15.1% on the week.
Chart Commodities
Commodities
Energy: Oil prices gave up some ground this week. The rise in geopolitical tensions in Ukraine, which are usually accompanied by a rise in oil prices, was only short-lived as the United States quickly dismissed the theory of a Russian bombing on the other side of the Ukrainian border, in Polish territory. Prices were thus more oriented by the forecasts of OPEC, which lowered its oil demand forecasts once again due to the slow reopening of China, still penalized by its zero-Covid policy. The cartel, which painted a bleak picture of the global economy, has weighed on investor sentiment. The barrel of Brent and WTI are trading at USD 86 and USD 79 respectively. In Europe, falling temperatures come with central heating. However, this is not enough to see pressure on natural gas prices as European storage levels are almost full. The Rotterdam TTF, which is the benchmark for gas prices in Europe, is trading around EUR 110/MWh. 

Metals: Base metal prices are catching their breath after their strong rally since the beginning of the month. All eyes are on China and its new measures to stimulate demand for metals. Nickel jumped mid-week to the USD 30,000 mark. One of the largest deposits, which is located in New Caledonia and owned by Trafigura, had to reduce production as heavy rainfall caused a leak in a tailings dam. On the LME, a ton of nickel is now bought for around USD 26,000, compared with USD 8,150 for copper. In precious metals, the barbarian relic is also pausing at USD 1760.

Agricultural products: In soft commodities, wheat and corn prices declined this week in Chicago to 800 and 660 cents per bushel respectively. Russia agreed to renew the Ukrainian grain deal for another four months. 
Chart Commodities
Macroeconomics
Atmosphere: Does anyone understand anything? Investors thought the U.S. central bank would be pleased with the first signs of easing on the inflation front. But the Fed was not born yesterday and prefers to make sure that everything is under control before comforting investors. Its members have been Debbie Downers throughout the week, stressing that a return to a more accommodative policy is not imminent. It must be said that the contradictory signals are multiplying: the labor market and retail sales are defying the economic slowdown in the US. German investor confidence is robust despite the energy crisis...

Rates: The yield curve is still inverted in the US, a sign that the market is anticipating a recession, but this is not new. What has changed a bit is that the 10-year has seen its yield stay around 3.78% after its sharp decline the week before. If our interpretation is correct, it is that investors believe the Fed, despite its recent warnings, is approaching a pivot. In parallel, the Bund yield fell back to just below 2% on 10 years, while the French OAT is at 2.46%. 

Currencies: After its recent sharp decline, the dollar seems to have found a support zone. In particular against the euro at USD 1.0337. Meanwhile, the British pound has improved its positions. The Cable is at USD 1.1895. The euro also regained some ground against the Swiss franc, at CHF 0.9863.

Cryptocurrencies: After taking a -22% drop last week, bitcoin has stabilized this week around the 16500 dollar mark at the time of writing. FTX's fall last week continues to worry economic agents exposed to the crypto-currency market, as evidenced by liquidity withdrawals on exchange platforms. In addition, the domino effect caused by the FTX collapse continues to spread, with international players showing significant signs of feverishness. This is mainly materialized by a worrying suspension of withdrawals. Bitcoin aficionados will have to be patient before the sky clears on the cryptosphere. 

Calendar: Investors will be able to take the temperature of the major economies on Wednesday 23, when the November PMI indicators for manufacturing and services are released. On the same day, they will learn about the US durable goods orders and the minutes of the last Fed meeting. On Thursday 24, while Americans celebrate Thanksgiving, the European markets will monitor the Ifo business climate index in Germany. 
Historical Chart
What comes around
This week, the market is once again doubting central bank policy after a nice rise last week. Have we already passed the inflation peak? They hoped that central banks could start considering easing their monetary policy, but Fed officials crushed their hopes. We should not forget that the US two-year/ten-year yield spread is in free fall and in negative territory. Historically, this scenario is always followed by a recession. But for how long and how deep? The duration of this spread in negative territory is usually a good indicator of the depth of the recession that follows. We remain attentive to this data. However, investors are still hopeful for an end-of-year bullish rally, especially after the strong rebound we have seen in the last few weeks, but there is no guarantee. What's next?
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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.