This week will be very eventful in the news, so we're starting off gently with a quick recap: we spoke with Jérémie Jeausserand, partner and founder of the business law firm Jeausserand Audouard, and the interview is available on our YouTube channel .
As a reminder, Jeausserand Audouard advises executives, particularly on mergers and acquisitions, private equity, and wealth restructuring, and the firm notably worked on the sale of LOSC and the IPO of OVHcloud.
As usual, for those who want to catch up on the news first, we've included it in the "doggy bag" section. 🙂 |
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- Shaheel MS, Romain Juy, Dylan Le Corronc
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- One step away from a miracle
- Markets: Airbus is on cloud nine
- Shot: The AI Act is coming
- What's on the horizon this week: A recap of the eventful week
- Doggy bag: Google published a fake video
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*Data at the close of the US stock market on Friday and Sunday at midnight for cryptocurrencies. Here's what these numbers mean.
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The session: Markets ended their fifth consecutive week of gains thanks to hopes for faster interest rate cuts in 2024. In France, the CAC 40 is less than 60 points away from its all-time high, helped by a rebound in luxury stocks that could benefit from a stimulus package in China. In the United States, the jobs report shows an unexpected drop in unemployment to 3.7% and higher job creation in October. More on that below.
Regarding individual stocks: Airbus shares surged to an all-time high thanks to Deutsche Bank, which sees further potential. The investment bank believes that supply chain issues, which have been hindering aircraft deliveries, are being resolved. The group will therefore be able to deliver more aircraft in 2024 to capitalize on the exponential recovery of the aviation sector after two difficult years.
Crypto: The entire crypto market is now worth over $1.5 trillion thanks to a blazing start to December. Bitcoin is benefiting significantly from the euphoria in the stock markets and the hope of SEC (the US financial markets regulator) approval for Bitcoin ETFs. Meanwhile, many analysts expect short squeezes to propel Bitcoin back up if it manages to surpass $44,000. As a reminder, a short squeeze is the forced sale of positions when the market falls, and to avoid it, investors must buy back their positions, i.e., Bitcoin. |
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Economy - United States:
Ready for a soft landing
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The US economy created 199,000 jobs in November, slightly above the forecast of 190,000.
Why is this important? Jerome Powell, chairman of the Federal Reserve (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 US is doing well, everything is doing well.
A reminder: A soft landing occurs when a country's economic growth slows gradually and in a controlled manner, without a sudden crash or recession (a decline in economic activity for two consecutive quarters). Finding the right balance to cool the economy with interest rate hikes without drowning it in cold water is quite an art for central banks.
- If it doesn't slow down enough , inflation can become uncontrollable and lead to hyperinflation. Argentinians can tell you all about it…
- If it slows down too much, it's a recession: companies lay off workers ⟹ decrease in purchasing power ⟹ decrease in consumption ⟹ decrease in investment ⟹ decrease in the value of assets (real estate, shares, etc.)… In short, drowning.
Where do we stand? Job growth is weaker than at the beginning of the year, but 1) it's still there. 2) The pace of job creation is below the average monthly gain of 240,000 this year – a sign of a cooling economy.
- The icing on the cake: The unemployment rate unexpectedly fell for the first time since July, to 3.7% (-0.2% month-on-month). In short, we have a decrease in job creation while unemployment is falling—a magical combination that could bring a central banker to tears.
A bit of perspective: Despite the positive report, investors fear a delayed impact from rate hikes, especially since job creation is uneven : of the 199,000 new jobs, the healthcare sector and the government accounted for two-thirds, while the rest came from the return of striking auto workers and the actors' union.
Furthermore, after weeks of data showing a clear slowdown in inflation, we now have more jobs than expected, as well as an increase in hourly wages. In short, the hoped-for rate cut in early 2024 is out of the question.
In short, we're very close to a miracle, but let's not get carried away. US central bankers are meeting this week to decide on monetary policy, and they will likely leave rates unchanged. 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 updated.
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Justin Sullivan/Getty Images
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🤖 The anti-Terminator weapon: The European Parliament and the European Council have concluded 35 hours of negotiations to reach an agreement on the foundations of the AI Act , the European law that will regulate artificial intelligence by 2025. This agreement now needs to be translated into more technical terms to finalize the text. It will notably include stronger constraints on “high-risk” topics (such as education, human resources, and law enforcement) and prohibitions (such as those concerning citizen rating systems, behavioral manipulation, and mass surveillance). However, the CCIA, one of the leading tech lobbies, deemed this agreement too rushed and likely to weigh on the European economy.
🕵️ Microsoft pulls the strings: The British government is considering an antitrust investigation into Microsoft's investment in OpenAI, the company behind ChatGPT, following changes in OpenAI's governance involving Microsoft. The reason: even though Microsoft maintains that OpenAI remains an independent company, British regulators are concerned about the potential impact on competition. As a reminder, Microsoft is already facing accusations of anti-competitive practices in the cloud computing sector and in video games following its acquisition of Activision Blizzard, the video game studio that produces Call of Duty.
🏦 Landing in Paris: The government is preparing a new plan to increase Paris's competitiveness as a European financial center . Specifically, regulatory changes will be made to attract more financial institutions. As a reminder, after Brexit, major American banks and investment funds, such as JPMorgan and Millennium Management, established themselves in Paris, and the aim of this plan would be to continue this trend. |
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Commercial collaboration with STIF:
explosive IPO in sight
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STIF, the French industrial company specializing in equipment for protection 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 euros to begin a phase of accelerated growth thanks to 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 opportunity to subscribe to one or more shares until December 14th, at a price of €6.50 per share. From December 20th, STIF will be officially listed on the stock exchange.
Click here to learn more
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Past performance is not indicative of future results. This content is not investment advice. All investments carry a risk of capital loss.
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🇫🇷 An anniversary is something to celebrate: E. Macron will be in Toulouse this Monday, specifically at the Airbus site, to mark the two-year anniversary of the launch of the France 2030 investment plan, which aims to develop technology, industry, and research in France. The president will announce four to eight new challenges.
🏦 The next move, more crucial than ever: As mentioned in the article, the Fed will announce its monetary policy decision on Wednesday, but there's little suspense: the Fed is not expected to raise rates given the slowdown in inflation. The ECB will also announce its decision on Thursday and is leaving rates unchanged, as in the US, but we should pay close attention to the words of President C. Lagarde: some foreign exchange specialists believe that a rate cut could occur as early as March (even before the US) due to the slowdown in inflation and growth in Europe.
📈 US Inflation: The US inflation report for November will be released this Tuesday and is expected to further show a slowdown in inflationary pressures. Inflation is forecast to reach 3.1% year-over-year, after October's 3.2%. On a month-over-month basis, analysts expect no change for the second consecutive month, which would be a positive sign for the Fed, which is targeting 2% inflation. |
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Fun fact: Google unveiled Gemini last week, its new AI model, which the company claims is more powerful than ChatGPT. In the demonstration, the AI could be seen recognizing a magic trick, understanding an imitation, suggesting a game based on a world map… Impressive. Yes, but it's actually fake ; the video was sped up and edited, and the AI isn't yet capable of interacting to that extent. Quite the bluff.
The statistic: Since the Covid period, Apple has been gradually shifting its device production to India, aiming to reduce its dependence on China. The company now wants to produce more than 50 million iPhones in the country annually over the next two to three years, and tens of millions more units later. In practical terms, this means that nearly a quarter of iPhone production would be in India. Designed in California, made in India…
The quote: “The defendant possesses enormous wealth and assets abroad and has no connection to the United States.”
Changpeng Zhao, the former CEO of Binance, the world's largest cryptocurrency exchange, is not allowed to leave the United States before his criminal sentencing, even though he would normally have been able to travel to his home in the United Arab Emirates before his sentencing on February 23. In practical terms, the vast wealth and his lack of ties to the United States could prevent him from returning for his sentencing. As a reminder, he pleaded guilty last month to violating federal money laundering laws. Binance also pleaded guilty and agreed to pay over $4.3 billion in penalties.
Reko: What does it mean to be a business lawyer specializing in complex and strategic transactions? ( YouTube - Aktionnaire )
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- Threads , Meta's Twitter clone, should arrive in Europe before Christmas.
- Vivendi is back in the CAC 40 index six months after leaving and replaces Worldline, whose market value has collapsed.
- Nadia Calviño , the Spanish Minister of Economy, has been appointed to head the European Investment Bank, the financial arm of the European Union.
- Minister Aurore Bergé announces community service for “negligent parents”.
- 45% of French people believe that the RN is not a danger to democracy for the first time since 1984.
- The Louvre is increasing its ticket price by 30% from January 15th, eight months before the Olympic Games.
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