Reacting to the Fed minutes and stronger-than-expected US data, financial markets were rocked this week. After their recent record highs, traders opted for some profit-taking, fearing that the Fed would have to wait a little longer before proceeding with monetary easing. Volatility is set to continue as we await further data on inflation and US economic activity.
Weekly variations*
39069.59  -2.33%
18808.35  +1.41%
Chart NASDAQ 100
FTSE 100
8317.59  -1.22%
Chart FTSE 100
2334.26$  -3.55%
Chart GOLD
77.68$  -2.07%
Chart WTI
1.08$  -0.22%
This week's gainers and losers
  • Keywords Studios (+50%): The UK-listed Irish publisher of software for the video game and entertainment industries has received a takeover offer from private equity firm EQT, valuing it at £2.2 billion. The group had already rejected four proposals from the Swedish investor, but this enhanced offer finally seems to delight the board, which is recommending the offer to shareholders.  
  • Grayscale Ethereum Trust (+48%): This week, the SEC, the US financial markets watchdog, approved spot Ethereum ETFs, i.e. funds backed by Ether, four months after authorizing the equivalent for Bitcoin. The announcement boosted the cryptocurrency's capitalization (+27% in 5 days) and that of the sector's players. 
  • First Solar (+35%): The US photovoltaic specialist is rising on the back of favorable recommendations from analysts. BNP Paribas, Piper Sandler, Citigroup and UBS have significantly raised their price targets on the stock, anticipating strong demand for the group's products from utilities and data centers in the US. The stock has gained 45% since the beginning of the year. 
  • Moderna (+25%), BioNtech (+6%): After two cases of human infection by avian flu were confirmed in the United States, US health authorities held talks with laboratories on the development of a possible vaccine for humans, boosting sector stocks. Moderna shares have risen by nearly 65% since January 1. 
  • (+23%): The web development platform is doing well. The company reported solid quarterly results, ahead of expectations, with sales up 12% and net income of $24 million, compared with a loss of $10.4 million a year ago. In the wake of this, several analysts raised their recommendation and price target on the stock. 
  • Hargreaves Lansdown (+22%): The British financial services group received and then rejected a takeover proposal from a consortium including CVC Advisers and the Abu Dhabi Investment Authority, which valued the company at £4.67 billion. However, the main shareholder, Peter Hargreaves, is open to privatization and has held talks with other investors. This should boost the bidding. 
  • Nvidia (+12%): The AI star continues to set one record after another. Buoyed by demand for its data center products, the group reported $26 billion in first-quarter revenues, better than expected, and $14.9 billion in profits, up 628% year-on-year. The chip specialist's stock, which passed the $1,000 mark, has already gained 116% since January. 
  • Polestar (-36%): Last month, the Swedish electric vehicle manufacturer announced a second delay in the publication of its Q4 and 2023 financial results, while it rectified accounting inaccuracies in its 2021 and 2022 financial statements. It had, however, confirmed its intention to publish its Q1 results at the end of May. In the end, this will not be the case, as the Group has once again given the all-clear. Last week, Polestar also received a warning from Nasdaq for failing to file its annual report with the SEC, thereby risking delisting from the index. 
  • XP inc (-12%): This Brazilian brokerage firm, listed in the United States, did not fall short of expectations. It reported higher sales and net income for the quarter, but these results, which missed estimates, failed to convince the markets. The company also announced a $195 million share buyback program.
  • Reddit (-12%): Last week, the social network jumped after unveiling a partnership with OpenAI, enabling Reddit to leverage the start-up's technology, and the ChatGPT platform to use Reddit content to power its AI models. A week later, there was a backlash: it seems that the platform's aficionados didn't appreciate this overture. 
  • Target (-10%): Inflation and economic uncertainty continue to weigh on Americans' discretionary spending and consequently on the results of the retailer, which announced that it expects comparable sales and profits well below Wall Street expectations for the second quarter. However, the company said it was cutting prices again on a wide range of products to reverse the trend. 
Chart Commodities
  • Energy: Oil prices are back on a downward trend. The minutes of the Federal Reserve's latest meeting cast a pall over black gold prices, highlighting a relatively high degree of “wait-and-see” attitude from US central bankers towards raising rates. In short, there's nothing very exciting for oil consumption. Against this backdrop, the surprise increase in weekly US inventories weighed on prices. Brent crude is edging ever closer to the USD 80/barrel mark. This weakness could prompt OPEC+ to fully extend its production quotas for the remainder of the year, in order to support prices. US WTI is trading around USD 76.3.
  • Metals: Is the party over? The tonne of copper is catching its breath on the London Metal Exchange. After setting an all-time record above USD 11,000, the barometer of the global economy is set to end the week down at USD 10,417 (spot price). Rising US dollar, mixed data on Chinese demand: the stars are no longer aligned for copper's rally to continue. Copper has risen by around 20% since the beginning of the year. As in the case of industrial metals, the rise in the dollar has weighed on the precious metals segment. The ounce of gold, which is also weighed down by rising bond yields, has lost ground at USD 2,337.
  • Agricultural products: Wheat rallied in Chicago, and not just a little, gaining nearly 7% this week! A bushel of wheat is now back above 700 cents, its July 2023 level. Concerns about crop losses in certain producing regions, particularly in the Black Sea, are supporting this trend. Still in Chicago, corn is treading water at 460 cents. 
Chart Commodities
  • Atmosphere: The USA is not slowing down. Speculation as to the date of the first Fed rate cut has been the subject of much debate in the financial community since the start of the rally last October. Unfortunately, there's a fine line between what the Fed would like to do (cut rates) and what it is actually in a position to do on the basis of macroeconomic data. Indeed, the latest releases from central bankers once again emphasize that rates could remain high for longer than expected. It has to be said that the economy is too resilient to sustain a sufficiently rapid decline in inflation. This is leading some market participants to question whether rates are restrictive enough. We'll have to wait for new data on rising prices and growth to validate or refute this hypothesis. In the meantime, the US 10-year yield remains firm above 4.33%, while a breach of 4.51% would suggest a return to April's highs of 4.74%. May's leading PMI indicators generally portrayed an improving economic situation, particularly in the US where the service sector showed strong acceleration. Durable goods orders published on Friday were in the same vein, reinforcing the assumption that rates will remain high for longer. In the UK, the week was marked by the announcement of early elections on July 4 by Prime Minister Rishi Sunak and by slightly more robust inflation than expected in April. 
  • Crypto: On Thursday evening, the US Securities and Exchange Commission (SEC) gave the go-ahead for the launch of Ethereum Spot ETFs. Specifically, the SEC approved a form (19b-4) for exchanges to list ETFs backed by the ether price (ETH).  But that doesn't mean these exchange products will be marketed just yet. Another form (S-1), which requires ETF issuers to inform investors of the ins and outs of their product, has yet to be approved. On the other hand, there is no longer any doubt that Ethereum Spot ETFs will soon join the Bitcoin Spot ETFs launched on January 11, 2024. Many are hoping that Wall Street's new money will propel the ether price to stratospheric levels, as happened earlier this year with bitcoin, once these products are open for trading. However, this remains a matter of speculation. For the time being, ether is up by over 20% since Monday, approaching 3,700 dollars. The market leader, bitcoin (BTC), is up 1.30% at around $67,000. 
Historical Chart
A week for nothing?
The countdown to the central bank meetings scheduled for June has started. Consequently, price data will be the focus of attention, in particular the first estimate of German inflation for May (as early as Wednesday May 31) and US PCE inflation for April (Friday May 31). A few companies with exotic quarterly closing dates will be releasing their results. These include Salesforce, Costco and Dell Technologies. The week begins with a bank holiday in New York and London on Monday. We wish you an excellent weekend.
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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.