This week will be very eventful in terms of news, so we'll start gently with a little reminder: we spoke with Jérémie Jeausserand, partner and founder of the business law firm Jeausserand Audouard, and the interview is available on our YouTube channel .
Reminder: Jeausserand Audouard advises managers in particular on mergers and acquisitions, private equity or asset restructuring operations, and the firm notably worked on the sale of LOSC and the IPO of OVHcloud.
As usual, for those who first want to take stock of the news, we'll put it in the doggy bag reko :) |
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- Shaheel MS, Romain Juy, Dylan Le Corronc
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- On the verge of a miracle
- Markets: Airbus is in seventh heaven
- Shot: The AI Act is coming
- On the horizon this week: An update on the eventful week
- Doggy-bag: Google published a fake video
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*Data at the close of the US stock market Friday and Sunday midnight for cryptos. Here's what these numbers mean.
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The session: The markets completed a 5th consecutive week of increases thanks to hopes of faster rate cuts in 2024. In France, the CAC 40 is less than 60 points from its historic record, helped by a rebound in luxury values who could benefit from a recovery plan in China. In the United States, the employment report shows an unexpected drop in unemployment to 3.7% and higher job creation in October. We talk about it below.
On the value side: Airbus shares are propelled to an all-time high thanks to Deutsche Bank which still sees potential. The investment bank believes that the problems in supply chains, which prevent the delivery of devices, are being resolved. The group will therefore be able to deliver more aircraft in 2024 to benefit from the exponential recovery of the airline sector after two difficult years.
Crypto: The entire crypto market now weighs more than $1,500 billion thanks to the start of the month of December hitting the ground running. Bitcoin is benefiting greatly from the euphoria of the stock markets and the hope of approval by the SEC (American financial markets policeman) of Bitcoin ETFs. In the meantime, many analysts expect short squeezes to propel Bitcoin again if it manages to surpass $44,000. Reminder, a “short squeeze” is the forced sale of positions downwards and to avoid it, investors must buy back their position, therefore Bitcoin. |
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Economy - United States
Prepared for a soft landing
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The American economy created 199,000 jobs in November, slightly above forecasts of 190,000.
Why are we talking about this? Jerome Powell, President of the American Central Bank (Fed) is on the verge of achieving a miracle: a soft landing for the economy. And as always, the economic situation of the world's leading power also impacts the global economy: if the USA is doing well, everything is fine.
Reminder: We speak of a soft landing when a country's economic growth slows gradually and in a controlled manner, without a sudden crash or recession (decline in economic activity over two quarters in a row). And finding the right mix to cool the economy with rate increases without drowning it in cold water is quite an art for Central Banks.
- If it does not slow enough , inflation can spiral out of control and lead to hyperinflation. The Argentinians will be able to tell you about it…
- If it slows down too much, it's a recession: companies lay off workers ⟹ drop in purchasing power ⟹ drop in consumption ⟹ drop in investments ⟹ drop in the value of assets (real estate, shares, etc.)… In short, the drowning.
Where are we? Employment growth is weaker than at the start of the year, but 1) it is still there. 2) The pace of job creation is below the average monthly gain of 240,000 per month this year – a sign of cooling in the economy.
- The icing on the cake: The unemployment rate fell against all expectations for the first time since July, to 3.7% (-0.2% over one month). Clearly, we have a drop in job creation while having a drop in unemployment, a magic cocktail that could move a central banker to tears.
A little perspective: Despite the positive report, investors fear a delayed impact of rate increases, especially since job creation is uneven : of the 199,000 job creations, the health sector and the government created two thirds, the rest comes from the return of strikers from the auto sector and the actors' union.
Even more: After weeks of data which showed the clear slowdown in inflation, we now have more jobs than expected, but also an increase in hourly wages. In short, we can forget about the expected drop in rates at the start of 2024…
In short. We are very close to a miracle, but let's not get carried away. American central bankers are meeting this week to make their monetary policy decision, and they will probably not touch rates despite everything. The question now is how they will communicate the likelihood of further rate hikes next year and to what extent the door would be open to rate cuts. We'll keep you informed.
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Justin Sullivan/Getty Images
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🤖 The anti-Terminator weapon: The European Parliament and the European Council have completed 35 hours of negotiations to find an agreement on the basis of the AI Act , the European law which must regulate artificial intelligence by 2025. It now remains to translate this agreement in a more technical way to finalize the text. In particular, we will find stronger constraints for “high risk” subjects (such as education, human resources, maintaining order, etc.) and prohibitions (such as on citizen rating systems, manipulation of behavior or mass surveillance). But the CCIA, one of the main tech lobbies, judged this agreement too rapid and risking weighing on the European economy.
🕵️ Microsoft holds the strings: The UK government is considering an antitrust investigation into Microsoft's investment in OpenAI, the company that produces ChatGPT, following changes in OpenAI's governance involving Microsoft. The reason: Even though Microsoft says OpenAI remains an independent company, British regulators are concerned about the potential impacts on competition. As a reminder, Microsoft is already facing accusations of anti-competitive practices in the field of the cloud, and in video games with its acquisition of Activision Blizzard, the video game studio which notably produces Call of Duty.
🏦 Landing in Paris: The government is preparing a new plan to increase the competitiveness of Paris as a European financial center . Concretely, regulatory changes will be made to attract more financial institutions. As a reminder, after Brexit, large American banks and investment funds, such as JPMorgan and Millennium Management, established themselves in Paris, and the objective of this plan would be to continue this dynamic. |
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Commercial collaboration with STIF
Explosive IPO in sight
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STIF, the French industrial company specializing in protective equipment against the risks of explosions in industrial environments, is preparing to go public on the Euronext Growth Paris market 39 years after its creation.
The objective: Raising approximately €9 million to begin an accelerated growth phase with its brand new series of products designed for explosion protection of battery energy storage systems (BESS).
- As part of this IPO, each individual shareholder has the possibility of subscribing to one or more shares until December 14, for a price of €6.50 per share. From December 20, the STIF company will be officially listed on the stock exchange.
Click here to learn more
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Past performance is no guarantee of future performance. This content is not investment advice. Any investment carries a risk of capital loss.
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🇫🇷 An anniversary is worth celebrating: E. Macron will be traveling this Monday to Toulouse, and more precisely to the Airbus site, on the occasion of the two years of the launch of the France 2030 investment plan which aims to develop technologies, industry and research in France. The president will announce four to eight new challenges.
🏦 The next move, more crucial than ever: As said in the article, the Fed will give its monetary policy decision on Wednesday, but there is no real suspense: the Fed should not raise rates given the slowdown of inflation. The ECB will also give its decision on Thursday and leave rates unchanged as in the USA, but we will have to pay attention to the words of President C. Lagarde: some specialists in foreign exchange operations think that a reduction in rates could take place as early as March (even before the United States) because of the slowdown in inflation and growth in Europe.
📈 US inflation: The US inflation report for November will be released this Tuesday and it is expected to further show the slowing of inflationary pressures. Inflation is expected at 3.1% over one year, after 3.2% in October. From one month to the next, analysts expect no change for the second month in a row, which would be a positive point for the Fed which is targeting 2% inflation. |
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The Doggy-Bag of Aktionnaire
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Fun fact: Google presented Gemini last week, its new AI model, which is more efficient than ChatGPT according to the company. In the demonstration, we could see the AI recognize a magic trick, understand an imitation, propose a game based on a world map... Impressive. Yes, but that's actually false ; the video has been sped up and cut, and the AI is not yet able to interact to this extent. Quite a bluff.
The figure: Since the Covid period, Apple has gradually turned to India for the production of its devices, with the aim of not being 100% dependent on China. The company now wants to produce more than 50 million iPhones domestically per year over the next 2-3 years, and tens of millions more units later. Concretely, this means that almost a quarter of iPhone production would be Indian. Designed in California, made in India…
The quote: “The defendant owns enormous wealth and property overseas, and has no ties to the United States.”
Changpeng Zhao, the former CEO of Binance, the world's largest crypto exchange, is not allowed to leave the United States before his criminal conviction, when he normally should have been able to travel home in the United Arab Emirates before his sentencing on February 23. Concretely, the weight of the accused's fortune and the fact that he has no connection with the United States could mean that he does not return for his conviction. As a reminder, he pleaded guilty last month to violating federal rules on money laundering. Binance also pleaded guilty and agreed to pay more than $4.3 billion in penalties.
Reko: What does the job of a business lawyer specializing in complex and strategic operations involve? ( YouTube - Aktionary )
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- Threads , Meta's Twitter clone, is expected to arrive in Europe before Christmas.
- Vivendi is back in the CAC 40 index six months after leaving and replacing Worldline which saw its stock market value collapse.
- Nadia Calviño , the Spanish Minister of Economy, has been appointed head of the European Investment Bank, the financial arm of the European Union.
- Minister Aurore Bergé announces community service for “failing parents”.
- 45% of French people consider that the RN is not a danger to democracy for the first time since 1984.
- The Louvre is increasing the price of its ticket by 30% from January 15, eight months before the Olympic Games.
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