Aktionnaire Newsletter

Hello. 

It's going to be a hectic week in terms of news, so we're off to a gentle start with a 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 senior executives on mergers & acquisitions, private equity and asset restructuring, and has worked on the sale of LOSC and the IPO of OVHcloud.

As usual, for those who want a quick update, we've put it in the doggy bag reko.

- Shaheel MS, Romain Juy, Dylan Le Corronc

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On the brink of a miracle
Markets: Airbus is in seventh heaven
Shot: The AI Act is coming
On the horizon this week: A look back at an eventful week
Doggy-bag: Google publishes fake video

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Markets

*Data at the close of the US equity market on Friday and midnight Sunday for cryptos. Here's what these numbers mean.

The session: Markets ended a 5th consecutive week of gains on hopes of faster rate cuts in 2024. In France, the CAC 40 is within 60 points of its all-time record, helped by a rebound in luxury goods stocks which could benefit from a stimulus plan in China. In the United States, the employment report shows an unexpected drop in unemployment to 3.7% and higher job creation than in October. More on this below.

On the value side: Airbus shares are at an all-time high thanks to Deutsche Bank, which still sees potential. The investment bank believes that supply chain issues, which are preventing the delivery of aircraft, are being resolved. The Group will therefore be in a position to deliver more aircraft in 2024, to take advantage of the exponential recovery in the airline sector after two difficult years. 

Crypto: The entire crypto market is now worth over $1,500 billion, thanks to a strong start to December. Bitcoin is benefiting greatly from the euphoria in the equity markets and the hope of SEC approval for Bitcoin ETFs. In the meantime, many analysts are expecting short squeezes to propel Bitcoin back up again if it manages to exceed $44,000. As a reminder, a "short squeeze" is the forced sale of positions on the downside, and to avoid it, investors must buy back their position, i.e. Bitcoin.

- Dylan Le Corronc

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Economy - United States
Ready for a soft landing

Giphy

The US economy created 199,000 jobs in November, slightly above the forecast of 190,000.

Why are we talking about it? Jerome Powell, Chairman of the US Federal Reserve (Fed), is on the verge of pulling off a miracle: a soft landing for the economy. And, as always, the economic situation of the world's leading power also has an impact on the global economy: if the USA is doing well, so is everything else.

Reminder: A soft landing is when a country's economic growth slows gradually and in a controlled manner, without a sudden crash or recession (a drop in economic activity over two consecutive quarters). Finding the right mix of rate hikes to cool down the economy without drowning it in cold water is quite an art for central banks.

If it doesn't slow down enough, inflation can get out of control and lead to hyperinflation. The Argentinians can tell you all about it...
If it slows down too much, it's recession: companies lay off workers ⟹ lower purchasing power ⟹ lower consumption ⟹ lower investment ⟹ lower asset values (real estate, stocks, etc.)... In short, drowning.

Where do we stand? Job growth is weaker than at the start 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 fell against all expectations for the first time since July, to 3.7% (-0.2% over one month). In other words, we have a drop in job creation and a drop in unemployment at the same time, a magic cocktail that could move a central banker to tears.

A little hindsight: Despite the positive report, investors fear a delayed impact. delayed impact of rate hikes, especially as job creation has been uneven: of the 199,000 jobs created, the healthcare sector and the government have created two-thirds, with the remainder coming from the return of auto sector strikers and the actors' union.

What's more, after weeks of data showing a clear slowdown in inflation, we now have not only more jobs than expected, but also a rise in hourly wages. Clearly, the rate cut expected in early 2024 can be forgotten...

In a nutshell. We're close to a miracle, but let's not get carried away. US central bankers are meeting this week to make their monetary policy decisions, and they're unlikely to touch rates after all. The question now is how they will communicate about the likelihood of further rate hikes next year, and how open the door would be to rate cuts. We'll keep you posted.

- Shaheel 

Transfer

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World
The Shot

Justin Sullivan/Getty Images

The anti-Terminator weapon: The European Parliament and the European Council have completed 35 hours of negotiations to reach an agreement on the basis of the AI Act. agreement on the foundations of the AI Actthe European law that will regulate artificial intelligence by 2025. All that remains now is to translate this agreement into more technical terms to finalize the text. In particular, there will be stronger constraints on "high-risk" subjects (such as education, human resources, law enforcement, etc.) and prohibitions (such as on citizen rating systems, behavior manipulation or mass surveillance). However, the CCIA, one of the main tech lobbies, judged the agreement to be too rapid and likely to have a negative impact on the European economy.

Microsoft holds the strings: The British 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: although Microsoft claims that OpenAI remains an independent company, UK regulators are concerned about the potential impact on competition. As a reminder, Microsoft is already facing accusations of anti-competitive practices in the cloud sector, and in video games with its takeover of Activision Blizzard, the video game studio that produces Call of Duty, among others.

Landing in Paris: The government is preparing a new plan to boost Paris' competitiveness as a European financial center. Specifically, regulatory changes will be made to attract more financial institutions. As a reminder, after the Brexit, major American banks and investment funds, such as JPMorgan and Millennium Management, set up shop in Paris, and the aim of this plan would be to continue this momentum.

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Commercial collaboration with STIF
Explosive IPO in sight

STIF

STIF, the French industrial company specializing in explosion protection equipment for industrial environments, is set to go public on the Euronext Growth Paris market 39 years after its creation. 

The aim: to raise around 9 million euros to kick-start an accelerated growth phase with its brand-new series of products designed to protect battery energy storage systems (BESS) against explosions.

As part of this IPO, each individual shareholder has the option of subscribe to one or more shares until December 14, at a price of €6.50 per share. From December 20, STIF will be officially listed on the stock exchange.

Click here to find out more

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On the horizon this week

Jose Luis Magana/AP

Celebrating an anniversary: E. Macron will be in Toulouse this Monday, visiting the Airbus site to mark the two-year anniversary 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 mentioned in the article, the Fed will give its monetary policy decision on Wednesday, but there's no real suspense: the Fed is unlikely to raise rates given the slowdown in inflation. The ECB will also give its decision on Thursday, leaving rates unchanged as in the USA, but we'll have to pay close attention to the words of President C. Lagarde. Lagarde: some foreign exchange specialists believe that rates could be cut as early as March (even before the US), due to the slowdown in inflation and growth in Europe. 

U.S. inflation: The November U.S. inflation report is due out this Tuesday, and is likely to show inflationary pressures slowing further. Inflation is forecast at 3.1% year-on-year, following October's 3.2%. On a month-on-month basis, 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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Aktionnaire's Doggy-Bag

Bloomberg

Fun fact: last week, Google presented Gemini, its new AI model, which the company claims outperforms ChatGPT. In the demonstration, you could see the AI recognize a magic trick, understand an imitation, suggest a game based on a map of the world... Impressive. But it's it's not true the video has been accelerated and cut, and the AI is not yet capable of interacting to that extent. Quite a bluff.

The number: Since the Covid period, Apple has been gradually turning 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 in the country per year over the next 2-3 years, and tens of millions more units later. In concrete terms, this means that almost a quarter of iPhone production would be Indian. Designed in California, made in India...

The quote: "The defendant has enormous wealth and assets overseas, and has no ties to the United States."

Changpeng Zhao, the former CEO of Binance, the world's largest crypto exchange platform, is not allowed to leave the United States before his criminal conviction, although he should normally have been able to travel to his home in the United Arab Emirates before his sentencing on February 23. In practical terms, the weight of fortune and the fact that he has no ties with the United States could mean that he would not return for his sentence. As a reminder, he pleaded guilty last month to violating federal money-laundering rules. Binance also pleaded guilty and agreed to pay more than $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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And apart from that

ThreadsMeta's Twitter clone, is due to arrive in Europe before Christmas.
Vivendi returns to the CAC 40 index six months after leaving and replaces Worldline, which saw its market value plummet.
Nadia CalviñoSpain's Minister of the Economy, has been appointed head of the European Investment Bank, the financial arm of the European Union.
Minister Aurore Bergé announces community service for "defaulting parents".
45% of French people consider that the RN is not a danger to democracy for the first time since 1984.
The Louvre increases its ticket prices by 30% from January 15, eight months ahead of the Olympic Games.

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