On Thursday, the stock market was on alternating current, as it had been on Wednesday. The indexes explored several bullish and bearish configurations before opting for gains in France and Germany and losses in the United States. The Paris index was dragged down by luxury stocks after Hermès followed LVMH in reporting quarterly sales that defied current economic fears. On Wall Street, there was little to report on the session, which saw the S&P500 slide 0.8%. The broad index is still posting a positive balance sheet for the week, thanks to Monday and Tuesday's sessions, but it's in about the same place as last Thursday. Futures on Wall Street indexes were in the red today.

Stocks are caught in the crossfire right now. On the one hand, corporate results that, without being flamboyant, are relatively reassuring because sales figures are being driven by price increases. On the other hand, the bond market is waking up in a rather curious way. Not in terms of direction, since the rise in yields is in line with fears of greater central bank firmness, but rather in terms of timing: why didn't they do it earlier? In any case, 10-year US debt is yielding 4.25% this morning, up from 3.93% a week ago. In Europe, the Bund is at 2.39% compared to 2.19% last Friday. The same is true almost everywhere. Except, of course, in the UK, where the gilt rate has fallen to 3.89%, compared to 4% at the end of last week and almost 5% at the height of the crisis.

Liz Truss's miserable departure has been the talk of the press. The Sun talks about  “extraordinary mayhem", the Economist estimated that the Prime Minister had maintained a semblance of control for seven days, the life of a salad. The Daily Star tabloid even said that the salad had won the battle of longevity. But who will replace her? Well, it could well be Boris Johnson! And that’s not a joke. Why not? Give us back Gerhard Schroeder too, or Donald Trump, so they can have a hair-contest with Boris.

There have been quite a few announcements since yesterday at the macroeconomic level. Starting with a rumor spread by Bloomberg that the United States is ready to extend tech restrictions to China on quantum computing and artificial intelligence. We remember that the announcement of the hardening of Washington's policy towards Beijing on semiconductors did not do much good to the markets two weeks ago. The technological decoupling between the two countries is accelerating. At the same time, European leaders reached a compromise on Thursday night on a "roadmap" to calm energy prices. In the administrative jargon, the term "roadmap" means that the protagonists have struggled to find a compromise without yet managing to deploy concrete measures. The French estimated that the mechanisms could be deployed "at the end of October, beginning of November", while the German warned that nothing is done yet. The roadmap includes mostly common-sense measures: grouped purchases and strengthening relations with producers outside Russia in particular. But for the moment, there is no specific mechanism to reduce the impact of gas prices on electricity prices. However, the main issue is for the winter of 2023/2024, since the game is more or less up for grabs for the coming winter.

 

Economic highlights of the day:

Only one indicator today, the British retail sales for September. Earlier today, Japan announced that its inflation reached 3% in September, as expected, which does not prevent it from reaching its highest level since the early 1990s.

 

In other news:

Snap fell 26% in pre-market trading after announcing that it did not expect revenue growth in the fourth quarter, raising concerns that inflation and the war in Ukraine will affect technology companies dependent on advertising revenues. I

* Twitter announced Thursday to its employees that no layoffs were planned following the agreement to buy the group by Elon Musk, thus denying a press report that the billionaire was considering job cuts. The social network's stock lost 10.5% in pre-market trading in reaction to the announcements of its competitor Snap.

The agency Bloomberg also reported that the U.S. administration was discussing a possible investigation into the activities of Elon Musk, including the proposed acquisition of Twitter, to determine whether they do not fall within the framework of U.S. security.

* Tesla - Elon Musk, the automaker's chief executive, estimated Friday that if there is a recession, it could last until the spring of 2024, after saying earlier this week that a "form of recession" in China and Europe was weighing on demand for electric cars.

* Apple - Foxconn, Apple's main subcontractor, said Friday that iPhone production at its Zhengzhou, China, factory remained normal despite tighter health restrictions related to COVID-19.

* Pfizer said it plans to quadruple the price of its COVID-19 vaccine to $110-130 per dose when the contract for shipments to the U.S. government expires.

* Verizon reported a 23% drop in quarterly profit on Friday and missed the market's consensus on new mobile subscribers, with many consumers opting for the cheap offerings of rivals AT&T and T-Mobile US.

* Schlumberger reported a 64.9% jump in quarterly profit on Friday, as soaring oil prices supported drilling activity. The stock was up 1% in premarket trading.

* American Express said Friday that its quarterly profit improved slightly as spending on goods and services held up for now amid fears of an expected year-end economic slowdown. The stock was down 3% in premarket trading.

* Whirlpool was down 5% in after-hours trading Thursday after lowering its annual profit forecast and posting disappointing third-quarter results due to weak demand.

* Ralph Lauren - Beatriz Gutierrez, the wife of Mexico's president, accused the U.S. clothing brand Thursday of plagiarizing indigenous designs, saying it was appropriating the work of the country's pre-Hispanic cultures.

 

Analyst recommendations:

Dominion Energy: KeyBanc Downgrades Dominion Energy to Sector Weight From Overweight

Oracle: KeyBanc Upgrades Oracle to Overweight From Sector Weight, Assigns $80 Price Target.

Under Armour: Telsey Advisory Group lowered its recommendation to "in-line perform" from "outperform".