It’s fair to say that economic targets announced by China during the Chinese People's Congress are "ambitious". The Chinese Communist Party is aiming for 5% growth this year.  The market is a little confused: the objectives are relatively classic, but observers were disappointed by the maintenance of a public deficit forecast at 3%, a sign that there will be no major fiscal stimulus. The envelope of bond issues dedicated to supporting general and local investment has been increased, but this doesn't seem to be enough to get investors excited, especially in the absence of more specific measures. They think that reaching 5% growth will be complicated this year, since the country faces a deep real estate crisis, deflationary pressures, weak household consumption, and increasing geopolitical and trade tensions with the West. The latest example of these tensions came today, with AMD failing to get an AI chip designed for China past U.S. regulators. It will need to apply for an export license, Bloomberg reported. 

In the US, there’s trouble in the world of the Magnificent Seven. Apple and Tesla are losing ground compared to the rest of tech stars. Apple's stock fell about 2.3% in premarket trading today on the news that iPhone sales in China fell 24% year-on-year in the first six weeks of 2024. This comes after a 3% drop yesterday after the European Union fined it 1.8 billion euros for restricting access to competing music streaming sites on its App Store. The Cupertino-based firm is now down almost 10% since the start of the year.

Tesla's issues are even worse. Its shares plunged more than 7% on Wall Street yesterday, following poor sales figures in China. The group had its worst month since the end of 2022. Fierce competition in the field of electric vehicles and the reluctance of drivers to embrace the technology are weighing on shares. Its stock is now down almost 25% for 2024.

On Wall Street, yesterday's session was marked by what is often call a breathing phase by financial commentators. Basically, things are going down, and there's not much to write about. Financiers were awaiting four deadlines this week: Chinese targets, a speech by Jerome Powell, the ECB's rate decision and March employment data in the US. The first deadline has passed. The second (Powell's hearing before congressmen in Washington) is scheduled for tomorrow. In the meantime, we have "Super Tuesday". Projections show that Donald Trump won the North Dakota Republican presidential caucuses yesterday, and the next contests are likely to strengthen his lead on the GOP's presidential nomination.

While the equity markets are in a breathing phase, the cryptocurrency markets are in the process of returning to their 2020/2021 highs. Yesterday, bitcoin peaked at USD 68,562, very close to its all-time high of November 2021. The crypto-king has now tripled in one year, with a gain of 61% since January 1. BlackRock's bitcoin ETF is apparently the fastest in history to reach $10 billion in assets. It totals $11.1 billion in assets under management, according to the findings of yours truly, two months to the day after its creation.

On Asia-Pacific markets, the Hang Seng is down 2.5%, the Nikkei 225 is flat, still above the symbolic 40,000-point mark. South Korea, India and Australia are slightly down. European leading indicators are bearish, with the Stoxx EU 600 down 0.1% and the FTSE 100 flat. On Wall Street, futures on the main three indices are in the red.

Today's economic highlights:

Services PMI indicators are released throughout the day in the major economies. ISM services and durable goods orders are also on the agenda. 

The dollar is worth EUR 0.9218 and GBP 0.7880. The ounce of gold accelerates to USD 2,129. Oil retreats, with North Sea Brent at USD 82.08 a barrel and US light crude WTI at USD 77.77. The yield on 10-year US debt stands at 4.21%. Bitcoin trades at USD 67,620

In corporate news:

  • Apple fell by 1.6% before the Wall Street opening in reaction to a report by research firm Counterpoint that the group's iPhone sales in China fell by 24% year-on-year in the first six weeks of this year, amid intensifying competition from local players such as Huawei.
  • AMD lost 2.8% in pre-market trading after Bloomberg reported that the U.S. administration wanted to block the company's efforts to develop and market an artificial intelligence chip for the Chinese market.
  • Alphabet on Tuesday introduced changes to search results and new tools for application developers to comply with European regulations.
  • Tesla - The Tesla factory in Grünheide, on the outskirts of Berlin, lost power and had to suspend production on Tuesday morning due to a fire triggered by an alleged attack on a substation by environmental activists, reports the BZ newspaper. Frankfurt-listed shares were down 2.8% at mid-session.
  • Target on Tuesday reported higher profits for the last three months of 2023, thanks to a smaller-than-expected contraction in sales. The retailer said it expected like-for-like sales this year to be well above Wall Street expectations. The share price jumped 6% in pre-market trading.
  • Viavi Solutions - The communications equipment company has agreed to buy British telecom test company Spirent Communications in a deal valued at around 1.01 billion pounds (1.18 billion euros), the two companies said on Tuesday.
  • Albemarle - The lithium mining group was down 8.4% after the close, as the company launched a $1.75 billion share issue.
  • Microstrategy was down 13% before the opening, as the software company sought to raise $600 million via convertible bonds to buy more bitcoins.
  • Gitlab: The software coding platform fell by 20.2% before the opening, following the publication of its fourth-quarter results on Monday. The company expects a loss per share of between 4 and 5 cents in the first quarter of 2025, compared with consensus earnings of 6 cents.

Analyst recommendations:

  • Dell Technologies Inc.: Daiwa Securities maintains its outperform recommendation and raises the target price from USD 88 to USD 144.
  • Domino's Pizza Inc.: Wolfe Research maintains its outperform rating and raises the target price from USD 404 to USD 500.
  • Netapp, Inc.: Citigroup remains neutral recommendation with a price target raised from USD 90 to USD 110.
  • Okta, Inc.: Citigroup remains neutral recommendation with a price target raised from USD 85 to USD 110.
  • Marks & Spencer Group Plc: Redburn Atlantic upgrades to buy from neutral with a price target raised from GBX 260 to GBX 305.
  • Rio Tinto Plc: Liberum downgrades to hold from buy with a price target reduced from GBX 5800 to GBX 4570.
  • National Bank Of Canada : Keefe Bruyette & Woods upgrades to outperform from market perform and raises the target price from CAD 105 to CAD 116.