“This decision by the Federal Reserve is a very big stock market meeting.”
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“This decision by the Federal Reserve is a very big stock market meeting.”

Dennis Lantoin: Hello everyone, nice to meet you in this new chat.

A quiet session on Monday. But what could be more normal, in France, the day is stuck between a weekend and a public holiday (the stock exchange is open, beware), no market-moving statistics, not even the new record inflation published this morning for October in the Eurozone. Investors had already made their calculations after figures presented in France and Germany on Friday. They are sure that the European Central Bank will raise key interest rates again by 75 basis points. If you do more than that, it will be an indication to make a decision in a “panic” mode, and if it is less than that, no one will understand given this constantly rising consumer prices.

Let’s start with some questions about the values ​​to change them up a bit if you want to.

samenco: Hi Mr. Lantoine, do you think there is still reason to hope that Ubisoft will improve? It’s a company with great brands/franchises but they seem to be struggling for profitability. With a PRU of €40, I thought I had a margin of safety, but here, at €26, I wonder if I’m in the value trap… (that’s 5% of my wallet). I keep? (I have time…)

Yes, I admit it, it is also a disappointment for me … who would have thought that Ubisoft, at 40 euros, was an excellent buying opportunity …

Since then, with the rise of the Chinese Tencent, the speculative aspect has completely faded and the market for video games and consoles has become very sluggish. New hardware is less than expected due to a lack of console components, which has reduced consumer appetite for games, especially for those with big budgets, whose launch is often being delayed, in part due to new ways of working in the post-Covid stage, which It does not appear to be successful for these industry players.

But if you have time, as you told me at the end of your question, no, now is not the time to sell, I am convinced that the best is yet to come. The annual goals were also confirmed despite the losses recorded in the first half due to the postponement of the game’s launch.

Nicola: Hi Dennis, my question is regarding Vivendi. What can we aim for in the title that after losing more than 30% since the beginning of the year (worst performance on Cac 40) seems to cost around 8 euros. Does getting 12 euros seem possible to you? Or can we hope to get out of the rating with a reassessment? Thanks.

We keep disappointing and finally had to start with the market!!! Yes, here too, we could have expected much better from Vivendi on this note of the sharp decline since the beginning of the year.

Personally, I already think some investors played Vivendi at the time for the dynamics of UMG, which is no longer embedded in the group.

As a result, activity is now largely focused on Canal+, which was disappointed in the third quarter by an organic decline of about 5%, which in operators’ minds was not matched by the good performance of Havas. But the effects of the comparison were unfavorable. We are still buyers of Vivendi, with a target of €10. At the current price, the value of the profit forecast for 2023 is estimated at just over 11 times, which is not much.

Epictète: Hi Denis Lantoine, I’m asking my unanswered question. You advise Mc Phy Energies to buy but based on speculation. There is no doubt that this middle class has become a major player in the hydrogen sector. Can we still invest with confidence even if it means placing a sell order with a -10% stimulus level? To read to you with pleasure.

Hello, yes it is a value that we love in the editorial staff in the sector, just like Neoen for example and Iberdola internationally, I was able to answer a question along the same lines a couple of weeks ago.

It is already one of the French companies that could become standards in the renewable energy sector.

But be careful, as growth stocks, they are all hampered or affected by the tightening of monetary policies of the central bank. So they are not immune to a small bamboo strike associated with a small movement of panic after a decision or suspension from the Federal Reserve or something else. As a result, 10% in the context of a sell order at the stimulus level may be a bit low, unless you are very active in the stock market and prepare for it to come back lower later.

nanou17: Hello Mr. Lantoin. No questions today, just thank Investir for reading it and especially for receiving my newspaper every Saturday morning, very friendly.

It’s beautiful, and therefore no answer for me, but I also thank you for your loyalty to our diverse support.

I will pass it on to the entire editorial staff!

Charles: Hey, do you think the Fed will focus on raising rates by the end of the year if it sees signs of improvement on the inflation front? If so, do you think growth stocks will rise? Is it appropriate to continue to position itself on “growth” stocks while waiting for this scenario? have a good day. Charles.

That’s the whole question these days…Unfortunately, I don’t have the answer to give you. If I could be in Jerome Powell’s head, it would be much easier…

Anyway, one thing is for sure, this Fed decision is a very, very big meeting for the stock market. The reaction could be so strong, as to speculate on this famous hub, that an article in the Wall Street Journal put forward the hypothesis. The markets are only waiting for one thing, for the Fed to start conjuring up the idea that it may soon slow the pace of rate hikes.

For this meeting at the beginning of November, of course, we should be entitled to a 75 basis point increase, but the exchange is hoping that we will then go back to 50 basis point, which means that Fed members are beginning to believe that the action was strong enough to put the brakes on the economy, Even if it means pushing it into recession, but at least to let inflation also subside.

Because of this, the contractions observed in some real estate indices in the US last week were welcome on Wall Street.

I think the information revealed in the Wall Street Journal did not come for nothing. It will only be necessary for the idea to be mentioned simply to please the market, otherwise we will reverse the next day.

As for Cac 40, it’s at 6,270 pips today, roughly in the middle of the 5,800-6,600 pips zone, so it’s not easy, we just have to go one way or the other… I realize I’m not helping you So much on that this week… but at least I’m honest with you…

On the year-end horizon, our central scenario is still with a probability of 30% at Cac 40 between 5,700 and 6,000 points, 25% between 5,400 and 5,700 points, and finally 20% between 6,000 and 6, 300 points, I remove the extreme scenarios.

Moreover, beware of false starts. If the major economies fall into recession as feared (near zero growth at best, especially in the US), that means stock markets haven’t yet reached their peak, and bottomed out before long ahead.

This is what the quarterly data published by US companies began to reflect, with a decrease in their sales. In this case, the penalties were strong, averaging 6% more than the S&P 500 on the day of the announcement (6.7%, the largest in S&P 500 history, according to Bank of America data.

FALLOT: I bought Linde stock in Xetra. What do I do with it because Linde will discontinue its listing in Frankfurt in 2023 to move it entirely to its New York listing. The code is also the same for Frankfurt and NYSE work. What?

I guess you still have time to think about it, the project was just mentioned last week. Keeping a stock of this size listed in New York is not complicated. And if I remember correctly, this is under Irish law (must check anyway), which allows you to keep it in the PEA, unless there is a subsequent change of citizenship.

Purvill: Hello. The UCs invested in China under my life insurance contracts are currently in grey…they are BNP CHINE EQ and JPM CHINE. Do you think we should always be cautious about China or is it time to come back to take advantage of historical lows? Thanks Dennis.

I will remain cautious about the Chinese economy, whose growth is expected to slow even if the latest GDP numbers are in line with expectations when we were expecting a more severe deterioration. Emerging countries like India are enjoying stronger growth but their markets may slow down or be affected by the Fed’s increase in key interest rates. But it is true that the Chinese market is inexpensive, we must bear in mind.

There you go, our chatting hour is over, and it remains for me to thank you and give you an appointment for the next chat. And don’t forget our meeting with the Fed! It’s Wednesday, but it’s 7 p.m.; Due to the change to winter time this weekend in Europe. See you soon.


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