Monday Report


Not many statistics were published in the United States, but they were encouraging. In particular, the ISM services index rose more sharply than expected in January, from 50.5 to 53.4. In the eurozone, investor confidence (Sentix) improved more than expected in February (from -15.8 to -12.9). Producer prices contracted by 0.8% m/m (-10.6% y/y) in December, in line with expectations. Retail sales also fell in the same month (-1.1% m/m; -0.8% y/y), but those for November were revised sharply upwards (from -0.3 to +0.3% m/m). In China, the PMI (Caixin) disappointed slightly in January, falling from 52.9 to 52.7 against expectations of 53. The contraction in consumer prices was more pronounced than expected in January (-0.8% y/y).

Planetary Limits

According to a new study by the Institute for Marine and Atmospheric Research at Utrecht University (Netherlands), the AMOC (Atlantic Meridional Overturning Circulation), i.e. the system of major Atlantic ocean currents, including the Gulf Stream, that regulates the climate on a global scale, is declining - as previous studies have identified - potentially irreversibly, and is likely to collapse within 100 years.


Economic data are pushing back expectations of the Fed’s 1st rate cut and pushing up 10-year sovereign yields (USD & EUR: ~+15bp). Q4 corporate earnings have an overall positive impact on equity performance (US: +1.4%; emerging markets: +0.7%; Europe: +0.2%). The dollar appreciates (dollar index: +0.2%), pushing gold down (-0.7%). The price of oil rebounds by 5.4% over the week. Coming up this week: SME confidence (NFIB index), consumer price index, retail sales, industrial production, homebuilders’ confidence (NAHB index) and household confidence (Univ. of Michigan) in the United States; ZEW confidence indicator, 2nd estimate of Q4 GDP, industrial production and trade balance in the eurozone.

Swiss Market

This week, we have the industrial production and construction statistics for 4Q-2023, the airline figures (Flughafen Zurich), inflation (FSO) and the consumer climate (Seco) for January. The following companies are due to release results: SoftwareOne, Schindler, Bühler, Basilea, DKSH, SwissRe, Phoenix Mecano.


ALPHABET (Core Holdings) has announced Gemini Ultra and a complete overhaul of its range of services (Gemini Ultra, Pro, Nano). Gemini Ultra is the most powerful version of Google’s new model, and is intended as an offensive against OpenAI’s model, ChatGPT 4. The service will be available on a subscription basis at $20 per month.
DISNEY (Core Holdings) is forecasting renewed growth in its streaming division, following the renewal with Charter and higher subscription prices. The group is expected to be close to profitability in terms of EBIT in 2024, with the aim of posting a profit in 2025, after having incurred significant losses (EBIT of $-4 billion in 2022, $-2.5 billion in 2023, $-383 million for 2024th and finally $1.3 billion in 2025th). We remain positive on the stock.
FREEPORT-MCMORAN (Satellite): Kathleen Quirk (with Freeport for 35 years, including 20 years as CFO) will succeed Richard Adkerson as CEO from 11 June. Adkerson will remain Chairman of the Board to ensure the management transition. This change comes as no surprise. K. Quirk is highly regarded both internally and by the financial community.
LONZA (Satellite): our meeting with management was reassuring and removed our doubts about the company. The return to growth has been confirmed for 2025, with the medium-to-long-term outlook intact. We are once again buying the stock.


In the US, the ISM services index was better than expected (53.4 vs 52), while the job market remained resilient, with weekly initial jobless claims remaining low (218k). Against this backdrop, the market continued to pick up on growth and expects less monetary easing this year (now 120bp), pushing rates up (2Y +12bp/10Y +16bp). In Europe, yields followed suit (Bund 10Y +14bp/BTP 10Y +15bp). On the credit front, High Yield spreads benefited from a risk-on week and continued to narrow (EU -8bp/US -14bp).

Sentiment of traders

Stock markets
With a close above 5,000 points, the S&P500 is showing the way, and nothing seems to be holding back the rise in the indices. Many more quarterly results are expected this week (Coca, Cisco, Sony, etc.), while on the macro front we have CPI, retail sales and industrial production in the US, and the ZEW and unemployment figures in the eurozone.
In a market with little volatility, traders will be focusing on the US inflation figures. The €/$ rebounded slightly after testing the 1.0725 high and is now trading at 1.0795. We expect the following ranges: €/$ 1.0656-1.0898. The $/CHF consolidates at 0.8735, sup. 0.8550 res. 0.8833. The CHF is holding steady at €/CHF 0.9426, sup. 0.9303 res. 0.9545. The £/$ at 1.2635 remains down, sup. 1.2500 res. 1.2786. Gold oz consolidates at $2025/oz, sup. 2001 and res. 2135.

Today’s graph


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A brief recap of the market’s past week, by Bordier Singapore
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