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| This week's gainers and losers |
| TOPS Xpeng (+39%): German carmaker Volkswagen is to invest $700 million to take a 4.99% stake in its Nyse-listed Chinese electric car counterpart. The two groups announce that they will jointly develop two VW-branded electric models dedicated to the Chinese mid-size car market, for launch in 2026. These models will use Xpeng's "Edward G9" platform, boosting the latter's revenues. Ocado (+38%): A flurry of good news for the British food e-commerce specialist. After reporting good half-year results and improved profitability last week, the group announced that it will receive £200 million from Norway's AutoStore as part of the settlement of a patent dispute. The grocer also announced the departure of CEO Luke Jensen, news that did not seem to displease the market. Rolls-Royce (+24%): buoyed by a fine first-half performance, the British turbine and jet engine manufacturer has raised its full-year forecasts, and is now targeting annual underlying operating profit of between £1.2 and £1.4 billion. It also promises that its half-year results (to be published on August 3) will exceed Wall Street expectations. The Group's turnaround program, as well as sales in civil and defense units, underpinned results. Align Technology (+14%): The US orthodontics specialist reported solid results, with EPS and quarterly sales exceeding expectations. The medical devices group also unveiled an encouraging outlook, also ahead of Wall Street forecasts. Note that the share price has gained over 80% since the start of the year, and that UBS is positive. Boeing (+10%): The U.S. aircraft manufacturer is doing (a little) better and unveils some good news. Quarterly sales were up 18%, better than expected. The quarterly loss amounted to $149 million, but this was less than the markets had expected ($212 million). The Group also generated free cash flow and announced an increase in its 737 production rate to match orders. Finally, it confirmed its full-year forecasts. In the meantime, several analysts have raised their recommendation on the stock. FLOPS Snap (-19%): The parent company of American social network Snapchat fell sharply this week after announcing a 3.8% decline in quarterly sales and a bleak outlook for the coming quarter. The group nevertheless claimed a 14% increase in daily user volume over the last 3 months, reaching 397 million at the end of June. The markets are also said to be taking a dim view of Snap's planned investments in artificial intelligence and machine learning, which would penalize the group's finances. Spotify (-16%): the streaming music giant angered investors by announcing this week that it was raising the price of its premium subscriptions by one dollar in some fifty countries, raising fears of a subscriber drain. The group also widened its operating loss to -247 million euros, and announced a timid outlook for the future. Nevertheless, the service recorded a record 27% year-on-year jump in active monthly users, reaching 551 million at the end of the second quarter. Chipotle Mexican Grill (-10%): The fast-food chain dedicated to Mexican gastronomy reported solid results but disappointed investors: earnings per share reached $12.65 versus $12.31 expected, and sales totaled $2.51 billion versus $2.53 billion anticipated. However, the group did not fall short of expectations: restaurant operating margins rose to 27.5% from 25.2% last year, despite a sharp increase in raw material costs. The company also continued to expand, opening 47 new restaurants during the quarter. |
| Commodities |
| Energy: Oil prices have been rising for five consecutive weeks, with North Sea Brent trading around $83 USD per barrel and its American counterpart, WTI, at $79.60 USD per barrel. Traders are showing renewed confidence in the Federal Reserve, hoping that monetary tightening is coming to an end. Additionally, strong US economic statistics indicate the resilience of the American economy, alleviating concerns about a recession and positively impacting oil demand. China's promises to stimulate its economy are being closely monitored by financiers, as China plays a significant role in global oil demand, accounting for more than half of the growth. These factors combined contribute to a bullish outlook for oil prices. Metals: This week, metal prices experienced a general upward trend, although the changes were relatively small. This suggests that the market is not placing significant importance on China's promises regarding its economy. Specifically, copper is trading at approximately $8580 USD per tonne on the LME, while zinc is at $2480 USD per tonne. Gold had a mixed week, influenced by both a declining dollar and increasing bond yields. Currently, gold is trading around $1955 USD. Agricultural products: The price of wheat in Chicago has slightly declined to 700 cents a bushel. However, the situation in Ukraine remains challenging due to strikes on its port infrastructure, leading the country to export its grain westwards by land and rail. In Europe, the European Commission has lowered its wheat yield forecasts to 5.59 tonnes per hectare, down from the previous projection of 5.7 tonnes per hectare. |
| Macroeconomics |
| Atmosphere: The U.S. Federal Reserve raised interest rates by a quarter-point, as expected, bringing Fed Funds to the range of 5.25% to 5.50%. The European Central Bank (ECB) followed suit the next day, increasing rates by 25 basis points for the ninth time since July 2022. The European refinancing rate is now 4.25%, and the deposit rate is 3.75%. These moves were well-received by the financial markets, as indicated by the positive performance of indices. Meanwhile, the Bank of Japan (BoJ) maintained its ultra-accommodative policy by keeping rates at the floor. However, the BoJ did raise the ceiling from 0.5% to 1%, signaling its preparation for a future normalization of monetary policy without changing its key rate. Currencies: It saw significant developments this week. Interest rates were raised in both the US and Europe. The European PMI indices disappointed, causing the EUR/USD to decline to 1.1036 USD for 1 EUR. Despite this temporary weakness, the consensus view is that the EUR/USD will continue its upward trend seen in recent months. Meanwhile, the Russian ruble continued to weaken against major currencies. Against the euro, the exchange rate reached 1 EUR = 101.798 RUB, and against the British pound, it reached 1 GBP = 118.656 RUB. Cryptocurrencies: Since Monday, the price of bitcoin has dropped by over 3% and is currently hovering around $29,000. On the other hand, ether has experienced a milder decline, falling just over 1% to the $1850 level. The crypto-asset industry has been facing challenges in recent weeks due to lawsuits from the US Securities and Exchange Commission (SEC) against crypto companies within its jurisdiction and the lack of regulatory clarity, which is impacting the industry's participants. Without significant catalysts specific to the cryptocurrency market, it's likely that digital currencies will face difficulties in gaining momentum again during the summer period. |
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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. |