Yesterday, the US inflation reading for November came in at 3.1% year-on-year, in line with forecasts, thanks in particular to the fall in gasoline prices. Core inflation, which excludes the effects of oil and food, remained at 4%, but this level was expected. There was a slight disappointment, as prices rose by 0.1% between October and November instead of stagnating, but it didn't impact markets much. Overall, the numbers are where we expected them to be.

And today’s producer prices for November confirmed this trend. They rose by 0.9% on an annual basis, while an increase of 1% was expected by economists. On a month-on-month basis, producer prices were unchanged, against estimates of a 0.1% increase.

The long-awaited Fed monetary policy decision is coming in a few hours, along with Jerome Powell comments. He might say that the battle against inflation isn't won, but that things are going in the right direction. He might also, however, reiterate that rate cuts are not on the agenda at the moment. There's no guarantee that he will do so, as his narrative is still somewhat enslaved by the dot plot, which offers an unobstructed view of the innermost convictions of all the FOMC bankers. What's more, his predecessor, Janet Yellen, sort of cut the grass under its foot by explaining that the final stretch to bring inflation back to the 2% target wouldn't be particularly difficult to achieve.

Investors, for their part, are awaiting the meeting with a certain degree of serenity. Wall Street seemed to hesitate a little yesterday, but the session ended higher. Gains flirted with 0.5% for the S&P500 and Dow Jones, while the Nasdaq 100 gained 0.8%. Futures are currently in the green. The Nasdaq 100 is almost 50% up since January 1, the most since the post-financial crisis rebound of 2009 (+53.5%). It looks like the big boss of the stock market cosmos is pulling out all the stops to end the year on a high note, with the US indices at their zenith. The Dow Jones is almost there, and the other two are getting close. European markets generally lost ground yesterday, with the exception of Zurich and Brussels. In all honesty, there's not much to say about yesterday's session.

In Argentina, the country's new strongman, Javier Milei, has instructed his finance minister to announce a 54% devaluation of the peso and spending cuts, to create an initial electroshock. The executive is targeting a monthly devaluation of the peso of 2% in the future, in an attempt to normalize the economy. Before the announcement, it took ARS 366 ARS to obtain USD 1. It is now ARS 800 for USD 1.

As for China, the authorities’ economic measures achieved little, apart from confirming that there will be no large-scale stimulus plan. This was enough to shock Western investors, who are addicted to piling billions on top of billions to infuse their economies. Time will tell whether China's austere approach is healthier. In any case, in the short term, it's not helping to put a smile on the faces of local equity markets.

In Tokyo, the Nikkei 225 continued its recovery, gaining 0.4%. The Japanese index, which has been a favorite of fund managers since the beginning of 2023, had experienced a small air pocket which brought it down to a one-month low last week. The Chinese market is back on its heels, both on the mainland (-1.3% for the CSI300) and in Hong Kong (-1.1% for the Hang Seng). South Korea is suffering, with its KOSPI returning 0.9%, dragged down by the automotive battery sector, which is widely represented. India is down, but to a lesser extent (-0.3%). As for Australia, the ASX200 recorded its fourth consecutive session in the green, gaining 0.3%. Sydney's share price took a few bumps, but returned to its best levels since mid-September. European leading indicators hover around equilibrium.

Economic highlights of the day:

UK's monthly GDP, Eurozone industrial production, the US producer price index, DOE crude inventories and the FOMC rate decision are on the agenda. 

The dollar is trading at EUR 0.9258 and GBP 0.7974. The ounce of gold is down to USD 1984. Oil remains under pressure, with North Sea Brent at USD 73.52 a barrel and US light crude WTI at USD 68.91. The yield on 10-year US debt reached 4.21%. Bitcoin retreats to around USD 41,000.

In corporate news:

  • Pfizer - On Wednesday, the pharmaceutical company posted a sales forecast of between $58.5 and $61.5 billion for 2024, compared with an average analyst estimate of $63.17 billion. It also raised its cost reduction target by $500 million. The share price lost 8.2% in pre-market trading.
  • Mastercard, Visa - The British payments regulator proposed on Wednesday to cap the fees charged by the two American groups to retailers and other businesses on transactions between the UK and the European Union.
  • Tesla will recall just over two million vehicles in the US to install new devices to prevent misuse of its Autopilot driver assistance system.
  • The U.S. road safety agency, NHTSA, has been investigating the electric car manufacturer for over two years to find out whether Tesla vehicles adequately ensure that drivers are paying attention when using the driver assistance system.
  • Tesla also announced on its website that its Model 3 RWD and Long Range vehicles would lose a federal tax credit of up to $7,500 in the US as of December 31, due to new Inflation Reduction Act (IRA) rules. The stock lost 1.4% in pre-market trading.
  • The electric carmaker has also received land-use authorizations from the Mexican Federal Ministry of the Environment to build a "gigafactory" in the northern border state of Nuevo Leon, the state government announced on Tuesday.
  • Uber - The European Parliament and the bloc's member states provisionally agreed Wednesday on a draft law to grant digital platform workers more rights, which, if passed, would be a world first. The new rules will prevent companies from misclassifying workers as self-employed and thus depriving them of benefits.
  • Apollo - The private equity firm is considering a bid for UK insurer Pension Insurance Corporation in a deal that could value the company at around £5 billion ($6.26 billion), Sky News reported on Wednesday.
  • Rocket Lab said on Tuesday that it was ready to launch its Electron rocket as early as December 15, carrying a Japanese satellite, which would be the rocket's first flight since its failed mission in September.

Analyst recommendations:

  • Accenture Plc: Cowen maintains its market perform recommendation and raises the target price from USD 300 to USD 320.
  • Alphabet Inc.: JP Morgan maintains its overweight rating and raises the target price from USD 150 to USD 160.
  • Anglo American Plc: HSBC downgrades to hold from buy with a price target reduced from GBP 25 to GBP 18.
  • Arista Networks, Inc.: Morgan Stanley maintains its overweight rating with a price target raised from USD 220 to USD 240.
  • Boeing: Goldman Sachs maintains its buy recommendation and raises the target price from USD 258 to USD 280.
  • Builders Firstsource, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 175 to USD 195.
  • Cadence Design Systems, Inc.: Zacks downgrades to neutral from outperform with a price target reduced from USD 311 to USD 282.
  • Capital One Financial Corporation: Wolfe Research maintains its underperform recommendation and raises the target price from USD 88 to USD 113.
  • Cbre Group, Inc.: Keefe Bruyette & Woods maintains its market perform recommendation with a price target raised from USD 78 to USD 93.
  • Celanese Corporation: Citigroup remains neutral recommendation with a price target raised from USD 130 to USD 145.
  • Church & Dwight Co., Inc.: Citi downgrades to sell from neutral with a target price of USD 90.
  • Cintas Corporation: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 441 to USD 491.
  • Costco Wholesale Corporation: Oppenheimer maintains its outperform rating and raises the target price from USD 630 to USD 675.
  • Dr Horton: Keefe Bruyette & Woods upgrades to outperform from market perform with a price target raised from USD 148 to USD 164.
  • Entergy Corporation: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 97 to USD 108.
  • Epam Systems, Inc.: Zacks maintains a neutral recommendation with a price target raised from USD 275 to USD 289.
  • Equifax Inc.: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 196 to USD 207.
  • Estee Lauder: Bernstein maintains its market perform recommendation and reduces the target price from USD 160 to USD 140.
  • Factset Research Systems, Inc.: Morgan Stanley maintains its underweight rating and raises the target price from USD 352 to USD 372.
  • Ferguson Plc: Societe Generale maintains its hold recommendation with a price target raised from GBX 12834 to GBX 14764.
  • Fiserv, Inc.: Zacks maintains a neutral recommendation with a price target raised from USD 133 to USD 145.
  • Ford Motor Company: BNP Paribas Exane downgrades to neutral from outperform with a price target reduced from USD 14 to USD 12.
  • Gartner, Inc.: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 400 to USD 421.
  • L3harris Technologies, Inc.: Morgan Stanley maintains its overweight rating and raises the target price from USD 264 to USD 279.
  • Lennar Corporation: Keefe Bruyette & Woods maintains its outperform rating and raises the target price from USD 145 to USD 168.
  • Lululemon Athletica Inc.: Telsey Advisory Group maintains its outperform recommendation and raises the target price from USD 520 to USD 550.
  • Lyondellbasell Industries N.V.: Citi downgrades to neutral from buy with a price target reduced from USD 105 to USD 98.
  • Marathon Petroleum Corporation: JP Morgan maintains a neutral recommendation with a price target raised from USD 164 to USD 177.
  • Masco Corporation: Barclays maintains its overweight recommendation and raises the target price from USD 63 to USD 75.
  • Moody's Corporation: Morgan Stanley maintains its equalwt recommendation and raises the target price from USD 318 to USD 345.
  • Motorola Solutions, Inc.: Morgan Stanley maintains its equalwt rating with a price target raised from USD 300 to USD 335.
  • Msci, Inc.: Morgan Stanley upgrades to overwt from equalwt with a price target raised from USD 526 to USD 600.
  • Norfolk Southern Corporation: Citigroup maintains its buy recommendation with a price target raised from USD 225 to USD 253.
  • Nucor Corporation: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 165 to USD 180.
  • On Semiconductor Corporation: President Capital Management Corp initiates a Buy recommendation with a target price of USD 95.
  • Oracle Corporation: Mizuho Securities maintains its buy recommendation and reduces the target price from USD 150 to USD 140.
  • Phillips 66: JP Morgan maintains its overweight rating and raises the target price from USD 134 to USD 150.
  • Pultegroup, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 95 to USD 120.
  • Republic Services, Inc.: Morgan Stanley maintains its overweight rating and raises the target price from USD 170 to USD 180.
  • Rightmove Plc: Panmure Gordon & Co. Limited maintains its buy recommendation and raises the target price from GBX 543 to GBX 667.
  • Roblox Corporation: Wells Fargo initiates an Overweight recommendation with a target price of USD 49.
  • S&P Global, Inc.: Morgan Stanley maintains its overweight rating and raises the target price from USD 424 to USD 464.
  • Shopify Inc.: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 66 to USD 88.
  • Synopsys Inc.: Wells Fargo maintains its overweight rating and raises the target price from USD 620 to USD 630.
  • Thomson Reuters Corporation: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 130 to USD 140.
  • Trane Technologies Plc: Zacks maintains a neutral recommendation with a price target raised from USD 235 to USD 256.
  • Tyson Foods, Inc.: Zacks upgrades to neutral from underperform with a price target raised from USD 39 to USD 54.
  • Uber Technologies, Inc.: JP Morgan maintains its overweight recommendation and raises the target price from USD 62 to USD 76.
  • Union Pacific Corporation: Citigroup maintains its buy recommendation with a price target raised from USD 250 to USD 267.
  • Us Bancorp: Zacks upgrades to neutral from underperform with a price target raised from USD 26 to USD 44.
  • Verisk Analytics, Inc.: Morgan Stanley maintains its equalwt recommendation and raises the target price from USD 219 to USD 232.
  • Wpp Plc: JP Morgan downgrades to neutral from overweight with a target price reduced from GBP 11.70 to GBP 8.50.
  • Zoetis Inc.: Zacks maintains a neutral recommendation with a price target raised from USD 188 to USD 199.
  • Zscaler, Inc.: Rosenblatt Securities Inc. maintains its buy recommendation and raises the target price from USD 225 to USD 245.