The U.S. Bureau of Labor Statistics Total nonfarm payroll employment rose by 303,000 in March, while 214,000 was expected. However, the unemployment rate was little changed at 3.8 percent, in line with expectations. The job market remains resilient and the US economy as a whole, and investors might slowly be coming to terms with the fact that rate cuts might come later than expected and in fewer numbers. But as long as indices rise, the pill is easier to swallow. Futures on Wall Street remained steady after the report, even rose a bit, while bonds barely moved. But indices could very well tumble before the end of the day.

This comes after yesterday’s drop during the session, after Minneapolis Fed President Neel Kashkari spoke. He is considered the most hawkish of the FOMC bankers, and although he’s not voting this year or the next under the Fed's rotating regional bank mandate, his voice counts. Yesterday, he explained that if inflation in the US continues to stagnate at too high a level, there will be no need to cut rates in 2024. This theory has already been developed by some economists, as I mentioned last week in these columns. But in the mouth of an FOMC member, it takes on added weight, even if the member in question is known for his ultra-Orthodox positions. The statement was reinforced by the interventions of two other central bankers, who are more inclined to be doves, and who were a little more wary than expected of future rate cuts.

These multiple remarks, combined with the hardening of the US stance towards Israel on the situation in Gaza and Benjamin Netanyahu's bellicose declarations towards his country's enemies, sent the US indices sharply lower. Wall Street finished in the red yesterday, with the Nasdaq 100 losing 1.55%, its worst performance in almost two months. In addition to the American-Israeli conflict, the Hebrew state is also facing a possible retaliation from Iran after one of its buildings in Syria was destroyed by a Tsahal strike. The rise in oil prices to their highest levels since October is a good indicator of risk perception in the region.

In Europe yesterday, indices rose modestly, with a few rare exceptions such as the French CAC 40. In Asia Pacific this morning, the week ended in the red. Tokyo lost -2%, Seoul -1.9%, Taiwan and Sydney 0.6% and Shanghai -0.4%. Bombay survived by remaining at equilibrium. Europe's leading indicators are all in the red, with the Stoxx EU 600 down 1.0%. Futures on the Nasdaq are up 0.4%, while Futures on the Dow Jones and the S&P 500 gained 0.2% and 0.3%, respectively.

Economic highlights of the day:

German factory orders, French industrial production, Eurozone retail sales and the US monthly employment figures are on the agenda today. 

The dollar is up to EUR 0.9247 and GBP 0.7941 The ounce of gold is worth USD 2289.. Oil is firm, with North Sea Brent at USD 90.60 a barrel and US light crude WTI at USD 86.30. The yield on 10-year US debt stands at 4.33%. Bitcoin is trading at USD 68,500.

In corporate news:

  • Alphabet, Microsoft - Artificial intelligence (AI) will enable many companies to hire fewer people over the next five years, says interim recruitment group Adecco Group on Friday, in a new survey of executives at 2,000 major companies worldwide.
  • Meta Platforms announced on Thursday evening that it was opposing a request from the Federal Trade Commission (FTC) to amend a 2020 privacy regulation, the social networking group pointing out that it had voluntarily disclosed two technical errors related to its Messenger Kids application to the agency.
  • Blackrock announced Thursday evening, in a regulatory notice, that its CEO Laurence Fink's total compensation for 2023 had reached $26.9 million, up from $32.7 million a year earlier.
  • Johnson & Johnson said Thursday evening it would recommend that shareholders reject an unsolicited offer from TRC Capital Investment Corporation for approximately 0.04% of its common shares.

Analyst recommendations:

  • Agilent Technologies, Inc.: Stifel upgrades to buy from hold with a price target raised from USD 145 to USD 163.
  • Eaton Corporation Plc: RBC Capital upgrades to outperform from sector perform with a price target raised from USD 286 to USD 371.
  • Synchrony Financial: Oppenheimer drops coverage on the stock previously rated market perform.
  • Citigroup Inc.: Keefe Bruyette & Woods maintains its market perform recommendation with a price target raised from 54 to USD 66.
  • Marathon Petroleum Corporation: Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 159 to USD 204.
  • Newmont Corporation: National Bank Financial maintains its outperform recommendation and raises the target price from CAD 54 to CAD 71.
  • Trane Technologies Plc: TD Cowen maintains its buy recommendation and raises the target price from USD 235 to USD 325. RBC Capital maintains its sector perform recommendation and raises the target price from USD 246 to USD 312.
  • W.r. Berkley Corporation: RBC Capital maintains its sector perform recommendation and raises the target price from USD 73 to USD 88.
  • Royal Bank Of Canada: BMO Capital Markets upgrades to outperform from market perform and raises the target price from CAD 140 to CAD 150.
  • Agnico Eagle Mines Limited: National Bank Financial maintains its outperform rating and raises the target price from CAD 85 to CAD 105.
  • Barrick Gold Corporation: National Bank Financial maintains its sector perform recommendation and raises the target price from CAD 24 to CAD 30.