Macro at a glance
Donald Trump recently appointed Elon Musk and Vivek Ramaswamy to lead a newly created "Department of Government Efficiency". This department aims to significantly reduce regulations, bureaucracy, and public spending. The initiative comes as concern grows over the national debt, which has risen to around 120% of GDP, and the budget deficit, which has reached 1.8 trillion for the fiscal year 2024, both of which have reached critical levels. (FT, FRED)
Inflation in the United States increased slightly this month, marking the first time since February 2022 that all three major inflation measures CPI, PPI and PCE have risen at the same time on an annual basis. This synchronised increase reflects a general trend of persistent inflationary pressures in the economy. Federal Reserve Chairman Jerome Powell said that the central bank is in no rush to cut interest rates, highlighting the resilience of the US economy and the importance of a cautious approach to inflation in order to achieve the 2% target. (FT, FRED)
In October 2024, inflation in Argentina fell to 2.7%, its lowest level for almost three years, although annual inflation remains high at 193%. This improvement follows Javier Milei's strict austerity measures, aimed at stabilizing the economy. This is a major political victory for the new president, who had made the fight against inflation one of his campaign promises. However, these policies have exacerbated poverty, which now affects more than half the population, while the country remains in recession, with GDP contracting by 3.4% in the first half of the year. (FT, NY Times)
The ceasefire between Israel and Hezbollah, negotiated by the United States and France, began on 27 November 2024 after months of intense conflict. This temporary agreement provides for the gradual withdrawal of Israeli troops from southern Lebanon and the repositioning of Hezbollah forces north of the Litani river, which is intended to serve as a buffer zone. At the same time, 5,000 Lebanese army soldiers are to be deployed to secure this region. However, Hezbollah, although publicly committed to the process, has already announced that it will reposition fighters near the border with Israel. (FT, RTS)
One Sector, One Insight
Basic Materials and Energy :
The CEO of French mining company Eramet (ERA) highlighted the critical role of Chinese partners in nickel processing, citing their expertise, technology and cost efficiency, particularly for battery grade nickel. Chinese dominance in Indonesia's nickel sector is due to significant investment following the 2020 export ban, with Indonesia now producing 57% of the world's refined nickel and expected to reach 69% by 2030. (FT)
Consumption and General Public Services:
Walmart (WMT) reported better-than-expected financial results for the third quarter of 2024, with net profit of $4.58 billion and sales of $169.59 billion, up 5.5% year-on-year. This solid performance reflects Walmart's ability to attract a diverse customer base, and further demonstrates the resilience of US consumers despite persistent inflation. As a result, the company has raised its full year guidance, anticipating net sales growth of between 4.8% and 5.1%. On the stock market, the shares rose by 4% on 19 November, bringing the year-to-date gain to 75%, significantly outperforming the S&P 500. (FT, Les Echos, Barrons)
Financial Services :
UniCredit (UCG) has made a €10.1 billion bid to acquire its Italian rival Banco BPM (BAMI) , aiming to consolidate its position in the Italian banking sector and create Europe’s third-largest lender by market capitalization. This move marks a shift in UniCredit’s strategy under CEO Andrea Orcel, who had faced political and union resistance in Germany regarding a potential takeover of Commerzbank (CBK). (FT, CNBC)
Healthcare :
Donald Trump's appointment of Robert F. Kennedy Jr, known for his anti-vaccine stance, to the post of Secretary of Health has raised serious concerns. Experts fear an erosion of confidence in vaccines and a weakening of public health policies. In response, shares in pharmaceutical companies specialising in vaccines, such as Moderna (MRNA) and Novavax (NVAX), fell by 5.6% and 7% respectively. Kennedy Jr. made a name for himself by denouncing the pharmaceutical lobby, particularly during the Covid-19 period, and by regularly attacking the consumption of fast food by Americans, going so far as to declare that it was poison. (FT, Le Figaro)
Industrials :
Northvolt's bankruptcy highlights the challenges facing European EV battery manufacturers in competing with dominant Asian players such as CATL and Panasonic. Despite raising over $15 billion from high-profile investors such as Volkswagen, Goldman Sachs and even the German government, production problems and missed targets led to cancelled contracts, including the $2 billion deal with BMW. This raises concerns about Europe's ability to build a localised battery supply chain, which is crucial for the EV industry. (FT, Yahoo Finance)
Technology and Network Equipments :
In August 2024, Hindenburg Research published a report accusing Super Micro Computer Inc (SMCI) of accounting manipulation and undisclosed related party transactions. These allegations led the company to delay the publication of its annual report. On 30 October 2024, Ernst & Young, then Supermicro's auditor, resigned due to concerns about the company's governance and integrity. This led to a 33% fall in Supermicro's share price. The share price continued to fall (-60%) until 18 November, when Super Micro Computer appointed BDO USA as its new auditor and submitted a compliance plan to Nasdaq to avoid delisting. These measures led to a 100% rise in the share price over the rest of November. (FT, Bloomberg)
The stock of the month
In November 2024, MicroStrategy (MSTR) purchased a further 55,500 Bitcoins, bringing the company's holdings to around 386,700 Bitcoins. On 21 November, after reaching an all-time high of $543, the share price fell by 25% after Citron Research published a scathing review, describing the stock as ‘overvalued’ and denouncing the risks associated with its dependence on Bitcoin. The company has a market capitalisation of 89 billion, with sales of just 470 million and losses of more than 400 million. Nevertheless, the share price has risen by 52% this month, boosted by the rise in Bitcoin over the period. (FT)
Key performances
Name | As of Nov 30 | Monthly change | YTD |
S&P500 | 6032.38 | 5.73% | 27.19% |
Dow Jones | 44910.65 | 7.54% | 19.08% |
NASDAQ | 19218.17 | 6.21% | 30.15% |
FTSE100 | 8287.30 | 2.18% | 7.33% |
CAC40 | 7235.11 | -1.57% | -3.93% |
DAX | 19626.45 | 2.88% | 17.04% |
SMI20 | 11764.20 | -0.24% | 5.32% |
MSCI WORLD | 3810.14 | 2.52% | 20.22% |
VIX | 13.51 | -41.67% | 2.35% |
CHF/USD | 1.1339 | -1.67% | -4.54% |
CHF/EUR | 1.0728 | 0.92% | -0.37% |
Brent $/bbl | 72.09 | -1.17% | -6.47% |
Gold Spot $/oz | 2650.35 | -4.44% | 28.47% |
Upcoming events
Dec 11 : US Inflation Rate
Dec 12 : ECB Interest Rate Decision
Dec 17 : German Ifo Business Climate Index
Dec 18 : Fed Interest Rate Decision and FOMC Economic Projections
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Written by Hippolyte Metzger-Otthoffer, Jeremy Kündig and Pierre Siomash
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