The Fed’s decision came yesterday without creating any turmoil. The US central bank was exactly where the market expected it to be. It decided to keep its interest rates unchanged, but there were no surprises there. The bank's stance was a little firm, but perfectly in line with the financial community's expectations. The dot plot, which depicts the intimate convictions of each of the bankers on the Monetary Policy Committee, was in line with the previous one, a sign that the Fed considers its central scenario to be under control. It shows that there should be three rate cuts this year in the United States. These three cuts have become the new rallying point between the Federal Reserve and reasonable investors. It is against this matrix that all data will be interpreted in the days, weeks and months to come.

There was even a hint of optimism after the press conference. The market's main fear was that Jerome Powell would dismiss, frankly or subtly, the possibility of a rate cut as early as June. He didn't, probably on purpose, as every word of his speech is weighed up. Investors have concluded that the June 11-12 meeting remains in the running, so much so that futures contracts give a 74.4% probability of a rate cut on this date, whereas the percentage had fallen towards 50% in recent days.

The only adjustments made by the Fed were about macroeconomic forecasts, but here again, the market saw this as a confirmatory sign that the institution is quite comfortable with its current policy. Indeed, the central bank has raised its core inflation and growth assumptions, and lowered those for the unemployment rate. In other words, it believes it will be able to lower rates even if economic conditions are solid. The only downside is that rates are likely to fall more slowly than expected in 2025, as a consequence of this economic strength, but this does not (yet) really worry financiers, who have shorter time horizons.

Against this consensual backdrop, the classic mechanisms were set in motion. The dollar fell, particularly against the euro. US Treasury yields retreated in good order. Gold climbed, even setting a record above USD 2,200 an ounce. Wall Street took note, confirming its gains. The Dow Jones and Nasdaq 100 were up over 1%, while the S&P500 gained 0.9%. Only the healthcare sector lost ground yesterday, probably too defensive for the current configuration. It's worth noting, however, that the technology sector didn't catch fire, and that within this sector, Apple continued to rebound, despite news that remains gloomy for the Cupertino-based group: the US authorities are preparing to launch an antitrust investigation against the group, while some other players in the sector, and not the least (Microsoft, Meta...) are joining Epic Games' grievances against the group's app store.

Staying in the realm of big tech platforms, US-listed Chinese giant PDD Holdings, formerly known as Pinduoduo, managed the tour de force of presenting its quarterly results without once mentioning the word "TEMU", the name of its subsidiary which is sucking the world's low-end trade dry, lining Western websites with programmatic ads promoting ludicrously-low-priced items, half of which are barely recognizable. This incongruity was highlighted by The Information's Martin Peers last night. And indeed, it's also the case in the transcript of the executives' press conference: a CRTL+F shows that there is not a single occurrence of "TEMU" in this 5000+ word text. Is PDD ashamed?

On today's agenda, there are (more) central banks, in Switzerland and the UK, as well as Turkey, Norway and Mexico. A host of March PMI activity indicators are also on the horizon. In the Asia-Pacific region, stock market indices are delighted with the consensus on the US central bank. Japan, which was closed yesterday for a public holiday, recovered 2%. Hong Kong, Taiwan and South Korea even advanced a little faster. India (+0.7%) and Australia (+1.1%) were more measured, but still posted solid gains. European leading indicators are solidly bullish, and so are futures on Wall Street. Exceptionally, there won’t be any Today on Wall Street column tomorrow. We’ll be back on Monday.

Today's economic highlights:

Lots of PMI indicators today, for France, Germany and the Eurozone, followed by the UK. The Bank of England will announce its rate decision. Later, in the United States, new jobless claims and the Philadelphia Fed's business outlook will accompany PMIs and existing home sales. The full agenda is here.

The dollar is up to EUR 0.9178 and GBP 0.7834. The ounce of gold accelerates to USD 2,196. Oil is firm, with North Sea Brent at USD 86.14 a barrel and US light crude WTI at USD 81.37. The yield on 10-year US debt stands at 4.27%. Bitcoin is trading at USD 67,291.

In corporate news:

  • Alimentation Couche-Tard disappointed in Q4 with results below expectations.
  • Aptitude Software improves full-year adjusted operating profit by 29%.
  • DocMorris meets expectations thanks to cost savings.
  • Micron surged 18% in after-hours trading yesterday.
  • Next Plc forecasts full-year profit of £960m.
  • The US Department of Justice is preparing to sue Apple for antitrust violations, according to Bloomberg. In addition, Meta, Microsoft, X and Match join Epic Games' battle against Apple.
  • Apollo Global has submitted an $11 billion bid to acquire Paramount Global film and TV studios.
  • According to Bloomberg, Barclays is preparing a large-scale redundancy campaign in its investment bank.
  • Direct Line Insurance is currently reviewing its strategy.
  • Unilever plans to withdraw from its water purification business in China.
  • KKR buys a majority stake in Avantus.
  • Shell sells its stake in SouthCoast Wind Energy to Ocean Winds North America.
  • Reddit goes public at the high end of the indicated range (USD 34 per share) to raise $748 M.
  • John Wood Group to reduce headcount by 200.

Analyst recommendations:

  • Broadcom Inc.: Cowen upgrades to outperform from market perform and raises the target price from USD 1400 to USD 1500.
  • Chipotle Mexican Grill, Inc.: Guggenheim maintains a neutral recommendation with a price target raised from USD 1900 to USD 2725.
  • Discover Financial Services: HSBC maintains its hold recommendation and raises the target price from USD 107 to USD 144.
  • Micron Technology, Inc.: BNP Paribas Exane maintains its outperform recommendation and raises the target price from USD 100 to USD 140. JP Morgan maintains its overweight recommendation and raises the target price from USD 105 to USD 130.
  • Nvidia Corporation: Cowen maintains its outperform rating and raises the target price from USD 900 to USD 1100.
  • International Consolidated Airlines Group, S.a.: RBC Capital upgrades to outperform from sector perform with a price target raised from GBX 200 to GBX 220.
  • Redrow Plc: RBC Capital downgrades to sector perform from outperform with a target price of GBX 750.
  • Segro Plc: HSBC upgrades to buy from hold with a price target raised from GBP 7.91 to GBP 9.64.
  • Shaftesbury Capi: HSBC upgrades to buy from hold with a price target raised from GBP 1.22 to GBP 1.49.
  • Virgin Money UK: Autonomous Research downgrades to neutral from outperform with a price target raised from GBP 2.15 to GBP 2.20.