Weekly market update by MarketScreener.com

• Cannabis: Shares in the sector soared over the weekend. The U.S. Department of Health has recommended a reclassification of cannabis as a low-risk substance following an 11-month review. Marijuana remains illegal at federal level, although nearly 40 US states have legalized its use in some form, and the reclassification is seen as the first step towards wider legalization. Cronos, Canopy Growth, Aurora Cannabis and consorts, which have been rather sluggish in recent quarters, are taking advantage of this to recover.
• Shopify (+20%): The stock got a big boost on Thursday, after the company announced that Amazon would be launching a solution within the Shopify application ecosystem, enabling US-based merchants to access the e-commerce giant’s “Buy with Prime” option. Canacord Genuity raised its recommendation from hold to buy, targeting USD 60.
• Ciena (+20%): After causing some concern this year, the American group took its revenge on Thursday by announcing quarterly results that were much more robust than expected. The outlook is in line with expectations. Management was very confident about the future. At the presentation conference, the CEO said he was “still comfortable” with the three-year targets and with fiscal 2024, which will enable faster-than-market growth, synonymous with market share gains.
• Johnson Matthey (+19%): The British chemical company’s shares surged after the investment arm of New York-based industrial company Standard Industries almost doubled its stake. Standard Latitude Master Fund had taken a 5.2% stake in April 2022, prompting speculation of a takeover. The American company revealed this week that it held 10% of the capital, making it the company’s largest shareholder.

Losers:

• Vinfast (-50%): The Vietnamese manufacturer of electric vehicles, whose valuation soared to absurd heights after its IPO in New York at the beginning of August, has fallen back. Vinfast is a symbol that unbridled, mindless speculation has not disappeared from the American market.
• Dollar General (-14%): The specialist in reduced-price distribution of mass consumption products fell after lowering its annual sales and earnings forecasts, due to lower store traffic and the decision to sell more low-margin staples rather than discretionary products.
• Orsted (-21%): The Danish company is the world’s leading developer of offshore wind farms. It announced that it could suffer write-downs of up to $2.3 billion in the US due to supply chain problems, soaring interest rates and the absence of new tax credits. Very bad news, which precipitated the share’s fall.
• World Wrestling Entertainment (-15%): The company that reigns over North American wrestling took a few hits this week, after the Saudi sovereign wealth fund invested over $100 million for a minority stake in a rival league, the Professional Fighters League. The aim is to launch new fights and promote events in the Middle East.

• Energy: This was a week of gains for oil prices, which are benefiting from several positive factors: a falling dollar, a decline in US inventories, US supply disrupted by a hurricane in the Gulf of Mexico, and the coup d’état in OPEC member Gabon.  This cocktail enabled Brent crude oil prices to rise to USD 87.70 a barrel, while US WTI traded at around USD 84.5. In the natural gas sector, industrial unrest continues in Australia between unions and gas companies. Strikes could begin in early September and disrupt liquefied natural gas production. In Europe, the Dutch TTF rose to 36 EUR/MWh.
• Metals: Industrial metal prices generally followed an upward trajectory this week on the London Metal Exchange. This suggests that traders are welcoming Beijing’s latest salvo of measures aimed at bolstering its economy, particularly its distressed real estate sector. Copper is trading at around USD 8,400 per metric ton, zinc is up to USD 2,430 and aluminum at around USD 2,140. Gold is also gaining ground, at USD 1945. The golden metal thus posted a second consecutive week of gains, thanks to easing bond yields.
• Agricultural products: In contrast to the energy and metals compartments, grain prices retreated this week in Chicago, with a bushel of corn trading at around 460 cents versus 605 cents for a bushel of wheat.

• Atmosphere: Investors continue to favor a central scenario based on three pillars: the end of the monetary tightening cycle followed by a rate cut as early as 2024, a soft landing for the US economy and inflation under control. So far, the latest macroeconomic statistics from the US are proving them right: the PCE Core price index came in at +3.7% vs. +3.8% expected, while non-farm payrolls stabilized month-on-month at 187k vs. an estimated 170k, for an unemployment rate of 3.8%. As an immediate consequence, the yield on the US 10-yr bond fell back sharply after stumbling on its 2022 highs of around 4.33%. Unfortunately, the die is not yet cast. However, we’ll need to break through the 4.00% zone to bet on a more pronounced downturn. The euro/dollar pair is still in a relatively narrow channel. At around 1.0870, however, it does not seem to fully reflect the difference in pace now being established between the ECB and the Fed.
• Crypto: Bitcoin has been very volatile this week, frantically climbing more than 6% in the space of a few hours on Tuesday, before losing all of its gains over the following two days. This rise in bitcoin’s price is explained by a US appeals court’s criticism of the Securities and Exchange Commission (SEC) for its unjustified explanations for refusing to approve a bitcoin spot ETF in the Grayscale case. Although this does not imply acceptance of such an ETF anytime soon, the decision was enough to reignite speculation on the cryptocurrency market leader. But yesterday, 48 hours later, as the SEC announced the postponement of its decisions on all pending ETF applications, bitcoin fell back to Monday’s level of around $26,000 at the time of writing.