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Technology stocks demonstrate their strength, the advantages of the stock market

Once again, it’s the tech giants that are setting the pace in the stock market. When US streaming giant Netflix returned in force with 13.1 million more paying subscribers in the latest quarter, Wall Street cheered, sending shares 12% higher than before its announcement. As ASML Holding, a major supplier to semiconductor makers, reported better-than-expected fourth-quarter net profit and revenue on strong equipment sales in China, its stock catapulted 9.7%. And even as German software publisher SAP unveils a €2 billion restructuring program in 2024 to better focus on AI-related business areas, even if it means spending on accounts, the market is happy: shares rose 7.6 % to new historical highs. Equity markets as a whole benefited: in Paris, the Cac 40 gained 0.91% to 7,455.64 points on trade volume of 3 billion euros. On Wall Street, the Dow Jones gained 0.4% and the tech-heavy Nasdaq Composite gained 1%.

Tesla is waiting around the corner

Will this state of grace of technical values ​​last? Other big names are expected to turn in the coming hours: Intel, IBM or Tesla. After Wall Street closes tonight, the electric vehicle maker will go on the grill. Analysts expect Elon Musk’s group to sell about 2.2 million cars this year, which would represent an increase of about 22% compared to 2023, according to data compiled by Bloomberg. But achieving that forecast comes with many challenges: automakers, suppliers and even rental companies warn of a decline in interest in electric cars. Tesla has tried to cope with the slowdown in demand by cutting prices… in the process slowing its margins. ” Negative developments in the global electricity market are very important to Tesla and can reasonably be expected to have a short-term negative impact on the stock. », Adam Jonas of Morgan Stanley reports, while emphasizing that Tesla is both an automotive and an energy, artificial intelligence and robotics company. The analyst expects “ clearly cautious forecasts for 2024 “.

Gloominess

On the macroeconomic level, investors noted a January decline in European consumer confidence from already very low levels and a gloomy January flash PMI in the Eurozone. They show the outlook remains bleak, with a composite indicator that summarizes the services and manufacturing sectors remaining in decline at 47.9 points. Specifically, manufacturing output appears to be gradually bottoming out, while activity in the service sector continues to slow. ” We still expect a slight increase in economic activity in the first quarter of 2024, although the January PMI results are consistent with a decline in GDP and pose a downside risk », responded Leo Barincou, from Oxford Economics. ” PMIs confirm our view that weak demand will weigh on the economy for some time to come, but the strength of price pressures will prompt ECB members to wait until the second quarter to cut rates. », continued Bradley Saunders, an economist at Capital Economics. The ECB will decide on the trajectory of interest rates this Thursday. Without any drama, the monetary institution should opt for the status quo, as its president Christine Lagarde suggested during the World Forum in Davos. The first reduction in interest rates in the Eurozone could happen during the summer. That will have to be confirmed tomorrow.

Alstom goes off the rails again

Among French companies, Alstom finished last in the Cac 40: -5.46%. The gap between the rail equipment maker’s business and industrial performance and the health of its balance sheet, which needs to be strengthened to maintain an “investment grade” financial rating that allows access to the credit terms, is causing concern for the stock. market. In one year, the stock lost 57% of its value.

Imerys jumped 13.26% on a buy recommendation from Oddo BHF, which targets a target price raised to €67. The industrial mineral miner, whose lithium mine project in Allier will allow it to gain momentum in the electric car market, had the good idea to invest in a manufacturing plant in the United States more than a decade ago. from the highest quality natural quartz.

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