Romain Fournier

Chief Editor
Having worked in the British, French and Swiss financial press, Romain is able to report on local and international issues, as comfortable in French as in the language of Shakespeare, Romain Fournier leads the editorial team at Marketscreener. Fine connoisseur of the English-speaking markets, Romain delivers an editorial every day on US and UK markets.

Busy week ahead

12/13/2021 | 09:43am EDT
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It’s a busy this week, with meetings set by four central banks, including the Fed on Wednesday. Last Friday, record US inflation did not spook investors – they obviously were expecting worse data. The week will start with an upward trend in spite of the monetary countdown.

Investors decided on Friday that the highest annual U.S. inflation in 39 years - prices rose 6.8% in November - would not stop indexes from approaching the annual highs hit in November. The S&P500 ended with a gain of 0.95%, its best level of the session. It seems that Wall Street considers that November marked the high point of the inflationary episode. This is the best possible explanation, even if in hindsight it is always easier.

In such a context, should we still consider the meetings scheduled by the central bankers this week to be important? I would say yes, especially as the circumstances force them to get out of their usual boring speeches. In addition, there will be four monetary policy decisions between Wednesday and Friday, by the four most followed central banks on the planet, if we exclude the Chinese representative (PBOC), which operates a little differently. The U.S. Federal Reserve will open the ball on Wednesday, followed by the European Central Bank and the Bank of England on Thursday and the Bank of Japan on Thursday night. "The Fed could and should raise rates this week," says Bank of America's head of strategy, Michael Hartnett, who thinks it more likely that the first round of tightening will wait until March, due to the current labor market. Historically, the Fed has always intervened on rates when employment was going downhill. And currently, overheating is present in all the indicators available to the US central bank.

In Asia, markets got a boost from speculation that the Chinese Communist Party has started an economic stimulus program, which could gain momentum in the coming weeks.

 

Economic highlights of the day:

No major indicators today. In Japan, the Tankan manufacturing index came in at 18 points, slightly below expectations.

The dollar is trading at EUR 0.8861. Flat calm on the ounce of gold, at USD 1782. Oil is firm at USD 71.42 per barrel WTI and USD 74.81 per barrel Brent. U.S. 10-year debt is offering an almost unchanged yield of 1.49%. Bitcoin is losing 4% at USD 48,000.

 

On markets:

* JP Morgan raised its price target on Apple to $210 from $180, saying the U.S. group should launch a 5G-enabled iPhone SE in 2022, which would boost its handset production by an additional 30 million units to a total of 250 million next year. Apple shares, which closed Friday at a record high of $179.45, very close to the $3 trillion market capitalization, are gaining 1.1% in pre-market trading Monday.

* Pfizer, Arena Pharma - The two laboratories announced Monday that the latter would be bought by the former for $6.7 billion in a deal that will allow Pfizer to strengthen its position in treatments for cancer and inflammatory diseases. Arena shares soared 92.2% in pre-market trading and Pfizer shares gained 1.6%.

* BlueBird - The biotech company jumps 14.5% in pre-market trading after it says clinical trials of its gene therapy treatment are showing a sustained response in sickle cell disease patients.

* Novavax - The drugmaker's stock is up 4.5% in premarket trading after announcing the filing of its COVID-19 vaccine in the United Arab Emirates.

* Ford - The automaker's stock advances 0.1 percent in premarket trading to $21.48, its highest level in 20 years, after the group announced Friday a goal to triple its production of the Mustang Mach-E, an electric SUV, to 200,000 units per year by 2023 for North America and Europe.

* The U.K. competition authority announced Monday that it intends to open an investigation into Microsoft's proposed $16 billion takeover of Nuance.

* An Amazon warehouse in Illinois was hit by powerful tornadoes that struck six east-central U.S. states on Friday and Saturday, killing at least 100 people.

* The U.S. State Department has given the green light to the possible sale of four Multi-Mission Surface Combatant (MMSC) frigates, manufactured by Lockheed Martin, to Greece for $6.9 billion, the Pentagon announced Friday.

* McDonald’s - The fast-food chain will hire 12,000 people and open 200 new restaurants in Italy by 2025, said the general manager of the group's Italian subsidiary, Dario Baroni, reported Monday in the Affari&Finanza supplement of the daily La Repubblica.

 

Analyst recommendations:

  • Anglo American: Berenberg remains Buy with a price target reduced from GBp 4100 to GBp 3700.
  • Coca-Cola: J.P. Morgan raised the recommendation to overweight from neutral. PT up 12% to $63
  • Compass: Jefferies remains Buy with target raised to GBp 1900 from GBp 1660.
  • CommScope: J.P. Morgan downgrades to neutral from overweight. PT up 15% to $13
  • HubSpot: Goldman Sachs reinstated coverage with a recommendation of buy. PT up 32% to $953
  • Iris Energy: J.P. Morgan initiated coverage with a recommendation of overweight. PT jumps 108% to $30
  • Microsoft: Phillip Securities initiated coverage with a recommendation of buy. PT set to $405
  • National instruments: J.P. Morgan raised the recommendation to neutral from underweight. PT up 11% to $48.
  • NetApp: J.P. Morgan raised the recommendation to overweight from neutral. PT set to $110, implies a 23% increase from last price. NetApp average PT is $98.19.
  • PNM Resources: Wells Fargo Securities upgrades to overweight from equal-weight. PT rises 9.7% to $50
  • Royal Mail: Berenberg upgrades from Hold to Buy, targeting GBP 650.
  • Timken: Goldman Sachs downgrades to neutral from buy. PT up 7.2% to $73
  • Victorian Plumbing: Berenberg remains Buy with a price target reduced from GBP 260 to GBP 130.
  • Volution Group: Jefferies remains a hold with a target adjusted from GBp 550 to GBp 560.
  • Wizz Air: HSBC upgrades from Hold to Buy with a target of GBp3,634.
  • WPP: HSBC upgrades from Hold to Buy with a target of GBp 1,300.

© MarketScreener.com 2021
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Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. 4.03% 2221.55 Delayed Quote.-33.37%
ANGLO AMERICAN PLC 1.77% 3826 Delayed Quote.24.57%
APPLE INC. 2.32% 143.78 Delayed Quote.-19.03%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.68% 0.7147 Delayed Quote.-2.35%
BITCOIN (BTC/EUR) -1.51% 27209.9 End-of-day quote.-35.26%
BITCOIN (BTC/USD) -0.65% 29315.8 End-of-day quote.-38.59%
BLUEBIRD BIO, INC. 5.33% 3.16 Delayed Quote.-68.37%
BRITISH POUND / US DOLLAR (GBP/USD) 0.09% 1.26269 Delayed Quote.-6.98%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.28% 0.78489 Delayed Quote.-1.39%
COCA-COLA EUROPACIFIC PARTNERS PLC 0.10% 50.15 Real-time Quote.2.08%
COMMSCOPE HOLDING COMPANY, INC. 3.71% 7.27 Delayed Quote.-34.15%
COMPASS GROUP PLC 2.39% 1817.5 Delayed Quote.7.51%
COMPASS, INC. 1.13% 5.36 Delayed Quote.-41.03%
EURO / US DOLLAR (EUR/USD) -0.16% 1.07155 Delayed Quote.-6.01%
FORD MOTOR COMPANY 3.23% 13.12 Delayed Quote.-36.83%
HSBC HOLDINGS PLC 1.54% 533.5 Delayed Quote.17.08%
HUBSPOT, INC. 2.35% 335.12 Delayed Quote.-49.16%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.10% 0.012892 Delayed Quote.-3.94%
IRIS ENERGY LIMITED 7.14% 5.7 Delayed Quote.-64.75%
LOCKHEED MARTIN CORPORATION 0.10% 447.99 Delayed Quote.26.05%
LONDON BRENT OIL -0.26% 116.99 Delayed Quote.46.84%
MICROSOFT CORPORATION 1.29% 265.9 Delayed Quote.-20.94%
NATIONAL INSTRUMENTS CORPORATION 0.96% 34.68 Delayed Quote.-21.34%
NETAPP, INC. 1.51% 70.49 Delayed Quote.-23.37%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.67% 0.65247 Delayed Quote.-5.22%
NOVAVAX, INC. 2.04% 47.07 Delayed Quote.-67.10%
PFIZER, INC. 0.52% 53.99 Delayed Quote.-8.57%
PNM RESOURCES, INC. -0.17% 47.37 Delayed Quote.4.03%
RBC BEARINGS INCORPORATED 6.47% 169.25 Delayed Quote.-16.20%
ROYAL MAIL PLC -0.70% 325 Delayed Quote.-35.32%
S&P 500 1.99% 4057.84 Real-time Quote.-16.52%
S&P GSCI CRUDE OIL INDEX -0.07% 624.575 Real-time Quote.46.70%
THE TIMKEN COMPANY 2.32% 60.02 Delayed Quote.-13.38%
TIMKEN INDIA LIMITED 1.75% 1953.65 End-of-day quote.-1.73%
VICTORIAN PLUMBING GROUP PLC -2.93% 63.4645 Delayed Quote.-45.28%
VOLUTION GROUP PLC -0.13% 390.5 Delayed Quote.-29.29%
WELLS FARGO & COMPANY 3.35% 45.6 Delayed Quote.-4.96%
WIZZ AIR HOLDINGS PLC -1.12% 3000 Delayed Quote.-27.55%
WPP PLC 0.24% 921.4 Delayed Quote.-17.89%
WTI -0.54% 113.272 Delayed Quote.46.90%
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