Halftone Economy in US and Stable in Eurozone – Monday report by Bordier

In China, industrial production, retail sales and investment disappointed in April.


Statistics released in the United States are mixed. While activity remained buoyant in April, with industrial production rising 1.1%m/m and retail sales rising (+0.9%m/m), leading indicators weakened. Empire manufacturing collapsed in May from 24.6 to -11.6, as did the Philadelphia Fed (from 17.6 to 2.6) and the housing sector weakened: consumer confidence fell from 77 to 69 in May and building permits were down 3.2% m/m in April. In the eurozone, household confidence remains weak but did not deteriorate further in May (to -21.1). In China, industrial production (-2.9% yoy), retail sales (-11.1% yoy) and investment (+6.8% yoy) disappointed in April.


Germany, Denmark, the Netherlands and Belgium have announced a partnership to quadruple their offshore wind capacity by 2030 (65 GW) and tenfold by 2050 (150 GW). Irrespective of the question of suspendability, such a power combined with a utilization rate of 35% would – for the example – correspond to 460 TWh of annual electricity production, ie the current consumption of France.


Market attention remains focused on slowing growth rather than inflation. In this context, US interest rates fell for the second straight week (10Y -14bps), mainly due to the decline in inflation expectations (10Y – 15bps), which settled in Ukraine to pre-invasion levels . In Europe, the ECB is perceived as increasingly ‘hawkish’ and government bond yields have risen at the short end (Bund 2Y +11bp). At the credit level, spreads widened on IG (EU +4bps/US +9bps) and HY (EU +7bps/US +27bps).

trader sentiment

stock exchange

Seventh week of the S&P decline and with investors seeing the glass half empty these days, this may not be the last. Especially with a busy agenda: May PMI, durable goods, Nvidia earnings, Q1 GDP, PCE inflation, monkeypox, the risks of bad news are very much present. So there could well be an eighth sad week on the horizon.


ECB nearing the end of negative rates (July/Sep) currently supporting €€/$1.0603, a break above the res. 1.0640 would open the way towards 1.0758 otherwise 1.0370 support stands. The $ took gains at $/CHF 0.9719, sup. 0.9616 resolution 1.0066. Our CHF quickly rose to €/CHF 1.0299, sup. 1.0170 res. 1.0550. An ounce of gold is at $1,854.


Another “low-risk” week, particularly in the US, where equities fell 3% (Europe: -0.5%; EM: +3.1%) and 10-year government bond yields fell 14 basis points. Gold (+1.6%) benefited from this, also supported by the weakness of the dollar (dollar index: -1.4%). Oil prices remain high and are rising slightly (+0.9%). To monitor this week: Manufacturing & Services PMI, New Home Sales, Durable Goods Orders, Chicago & Kansas City Fed Leading Indicators, Fed Minutes, Personal Income & Spending in the United States; Eurozone Manufacturing and Services PMI and EC Confidence Indices (Economy, Industry and Households); Industrial profits in China.

Swiss market

This week shortened by the Ascension will follow: World Economic Forum 2022 and Q1 Employment Barometer (OFS). Lem and Ypsomed will publish results in 2021/22. Otherwise, EPIC will go public after the IPO. Finally, COMET (Swiss persuasion) announces the surprising departure of its CEO for personal reasons. He will be replaced by the head of the X-ray department, who joined the group in 2007.


STELLANTIS (Satellite): During a roadshow, management indicated that H1 results, to be released at the end of July, should show an improvement in margin from the already high level at the end of 2021, as well as better generation of FCF. All this despite production restrictions. The levers are: positive price effect / improvement in product mix / productivity gains / favorable currency effect / improvement in seedling supply.

STRAUMANN (Core Holding) announces the acquisition of PlusDental, a German company specializing in clear aligners, for CHF 135 million. With a large network of clinics across Europe, the transaction will accelerate the group’s expansion in this area, particularly in the Netherlands, Sweden and the UK.

Walmart: If Walmart’s price/product positioning allows it to attract consumers during this period of high inflation (down trading), its first quarter results clearly show that the group does not have effective leverage (pricing power/recognized brands) to target incoming control costs and maintain profitability. We are entering a period of correct volumes / low margins without being able to determine the exit horizon. We’re taking out the title of our Satellites recommendations.

#Halftone #Economy #Stable #Eurozone #Monday #report #Bordier

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