Monday Report


In the United States, the statistics published were mixed. Business confidence (NFIB index) recovered slightly (from 91 to 91.9) in July, more than expected (91.3), and household confidence (Univ. of Michigan) eased (from 71.6 to 71.2) in August. Consumer prices rose by 0.2% m/m (+3.2% y/y), with underlying inflation marginally better than expected (+0.2% m/m, +4.7% y/y) in July. In the same month, producer prices rose (+0.3% m/m) more than expected (+0.2% m/m). In the eurozone, Sentix investor confidence improved (from -22.5 to -18.9) in August, whereas a deterioration to -24.5 had been anticipated. In China, disappointments pile up: exports (-14.5% y/y) and imports (-12.4% y/y) were low in July, and new loans (CNY 345.9bn) were well below expectations (CNY 780bn).

Planetary Limits

According to a study by Allianz, the heatwave of 2023 that affected the United States, Southern Europe and China could have cost 0.6 points of global GDP (between 0.1 points for France and 1.3 points for China). The study estimates that one day of extreme heat (over 32 degrees) is equivalent to half a day on strike, and believes that adapting economies over the longer term (adapting buildings, infrastructures and working hours) will be key to limiting the effects on productivity.


The pause in equities continues (US: -0.4%; Europe: 0%; emerging markets: -2%), also due to the rise in 10-year sovereign rates (US: ~+12bp; EUR: +6bp; CHF: +7bp). Gold (-1.1%) is also suffering from the appreciation of the US dollar (dollar index: +0.8%). Oil prices continue to rise (+0.7%; +10% in one month), fuelled by OPEC production cuts and the upward revision of consumption by the IEA. Coming up this week: retail sales, property developers’ confidence (NAHB index), housing starts, building permits, industrial production and Fed minutes in the United States; 2nd estimate of Q2 GDP, industrial production and trade balance in the eurozone; retail sales, industrial production, investment and house prices in China.

Swiss Market

This week, we will keep an eye on industrial production, as the leading indicators deteriorate, the OFS producer-import price index, Flughafen Zürich’s flight statistics for July, and the results of Straumann, Alcon and Siegfried, which are among our recommendations, as well as Geberit, Feintool, Komax and Implenia.


Removal of ELI LILLY from the Core Holdings list: the company reports excellent Q2 results. Turnover and EPS came in 9% and 6% above expectations. Sales were driven in particular by the ramp-up of Mounjaro (type 2 diabetes, obesity/+22% vs. consensus). Since the recommendation on 17.11.20, Eli Lilly’s performance has been exceptional (+288.5% including dividends compared with +26.7% for S&P Healthcare). The cardiovascular benefit was a key element that we expected for Mounjaro (and the therapeutic class). The stock is starting to be valued for perfection (P/VF=1.11), with an extremely positive scenario for Mounjaro. This is why we recommend taking profits on the stock and why it has been de facto removed from our recommendation list.
ROPER TECHNOLOGIES (Satellite) has announced the acquisition for $1.25 billion in cash of Syntellis Performance Solutions, which specializes in cloud-based data and performance management solutions for healthcare, financial institutions and higher education. Roper expects Syntellis to generate $185m in revenues and $85m in EBITDA in 2024, representing c. 4% of its 2022 EBITDA.
TENCENT (Satellite) will publish its quarterly results this Wednesday against a backdrop of economic recovery in China that is struggling to fully take off. We expect revenues to improve sequentially.


In the US, rates continued to rise for the 4th week in a row (2Y +13bp/10Y +12bp), despite confirmation of the disinflationary trend (CPI 0.2% m/m-3M annualized vs. 2%) and fears of deflation in China coupled with the continuing woes of property developers. In Europe, rates have also risen (Bund 10Y +6bp/BTP 10Y +4bp). For the time being, we see no weakness in credit, with HY spreads narrowing (EU -6bp/US -16bp) and HY indices outperforming in the US (HY +0.3%/IG -0.7%) and Europe (HY +0.2%/IG-0.2%).

Sentiment of traders

Stock markets
The markets continued their consolidation last week and opened in the red, following Asia. Quarterly results are drawing to a close, but we still have Cisco, Deere and Walmart to look forward to. On the macro front, in the US, we have the housing figures and retail sales, while in the eurozone, the ZEW, GDP and unemployment figures will set the pace for the week. We remain on a wait-and-see basis.
Investor concerns about China are underpinning the short-term uptrend in the $ and CHF: €/$ 1.0940, €/CHF 0.9584, $/JPY 144.80. The € is still falling and a break of the €/$ 1.0912 and €/CHF 0.9522 highs would accelerate this movement, while the €/$ 1.1050 and €/CHF 0.9688 highs remain valid. The $/CHF is consolidating at 0.876, up 0.8700 from 0.8872. The pound is down at £/$ 1.2680 sup. 1.2487 res. 1.2806. Gold oz corrects to $/oz 1912, sup. 1893 and res. 1946.

Today’s graph


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