Equity markets are on track for a positive week, with several major indexes like S&P500, CAC40, and DAX witnessing four consecutive sessions of gains, effectively erasing previous losses. The driving force behind this upward momentum is the growing belief among investors that monetary policy is now unlikely to tighten further. This conviction solidified after scrutinizing the recent decisions and comments from both the Fed and the Bank of England. Despite the central bankers' usual cautious language, optimistic investors focused on the pause in the tightening cycle, which sparked a wave of positivity in the market.
 
Investors responded robustly to the central banks' announcements, leading to significant gains in various indexes. For instance, the Nasdaq surged by 1.8% on Wednesday and another 1.7% on the following day. In Europe, the Stoxx Europe 600 saw a notable increase of 1.6%, the CAC40, Bel20, IBEX, and OMX Nordic, even managed to maintain advances above the symbolic 2% closing ceiling during the sessions. This positive market sentiment is likely to persist, at least until US inflation data for October is released on November 14, prompting investors to reassess the situation.

Despite the recent turmoil, financiers remain optimistic, foreseeing continued economic growth that would enable corporate earnings to rise despite the prevailing high interest rates. This confidence is rooted in past trends. However, this outlook relies on two key assumptions: first, that these high rates won't cause significant collateral damage, particularly in real estate or the debt market, which could disrupt the process; and second, that prices won't overheat, potentially negating the Fed's efforts to soften the impact. The latter point is particularly contentious and often emphasized by the US central bank to justify maintaining high rates over an extended period.

Corporate earnings releases, crucial for investor confidence, have generally met the required standards, preventing widespread panic, although there have been a few concerns. Notably, Apple, a significant player in Wall Street, faced a 3-4% decline in after-hours trading after releasing quarterly results that received a lukewarm reception. According to Andrew Uerkwitz from Jefferies, sales were slightly lower than expected, with strong iPhone performance in September offset by challenges in China due to competition from Huawei and regulatory issues. Disappointing forecasts for tablets and Macs further contributed to the drop, leading to an anticipated fall in the company's share price.

In significant news, Sam Bankman-Fried was found guilty of fraud in the FTX trial, marking the largest cryptocurrency scandal so far. Under the cumulative sentencing system in the United States, he could face up to 110 years in prison. The sentencing is set for March, causing a buzz in the international press. Meanwhile, the focus remains on the monthly employment figures for the United States, a crucial indicator of American monetary policy, even amid the current positive economic climate.

The Asia-Pacific region is without the Tokyo Stock Exchange this morning, which is closed for a public holiday. China is soaring in the wake of Western markets, with gains of 2.7% for the Hang Seng in Hong Kong. South Korea and Australia gained over 1%, while India was more measured but up 0.5%. 

Economic highlights of the day:

In the United States, the change in non-farm payrolls and the unemployment rate for October (8:30 a.m.), followed by the services PMI (9:45 a.m.) and its alter-ego ISM (10:00 a.m.). Full agenda here.

The dollar falls to 0.9394 EUR and  0.8180 GBP. The ounce of gold trades at 1988 USD. Oil rebounds, with North Sea Brent at 87.38 USD a barrel and US light crude WTI at 83.16 USD. The yield on 10-year US debt falls to 4.66%. Bitcoin is trading at around 34,200 USD.

In corporate news:

  • Apple - On Thursday, the company announced a sales forecast for the current quarter that fell short of Wall Street expectations, despite better-than-expected third-quarter results. The share price is down 3.1% in premarket trading.
  • Coinbase gives up 4.4% in pre-market trading, as the cryptocurrency platform reported a drop in transaction volumes for the second quarter in a row.
  • Block jumps 16.9% in pre-market trading after raising its adjusted earnings forecast.
  • KKR - The directors of Telecom Italia (TIM) will begin on Friday to study the American fund's offer for its fixed-line network, as part of a plan backed by Rome and opposed by the group's main shareholder, Vivendi.
  • Paramount Global announced on Thursday that investments in its streaming division were at their peak, a year ahead of schedule. The share gained 10% in after-hours trading.
  • Expedia Group announced a new $5 billion share buyback plan on Thursday after reporting better-than-expected quarterly earnings. The stock gained 10% in after-hours trading.
  • Motorola Solutions announced on Thursday that it was anticipating better-than-expected adjusted earnings for the current quarter, on the back of a recovery in the semiconductor market. The share gained 1.9% in after-hours trading.
  • Micron Technology - China's Minister of Commerce told the chairman of the American semiconductor group that Beijing would welcome the company's entry into the Chinese market, a sign of a further easing of relations between the world's two leading economic powers.

Analyst recommendations:

  • Airbnb: Phillip Securities upgrades to buy from accumulate with a price target raised from USD 152 to USD 157.
  • Amazon: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Apple: Haitong International Research Ltd maintains its neutral recommendation with a price target reduced from USD 186 to USD 165.
  • Automatic data processing: Baptista Research downgrades to hold from underperform with a price target reduced from USD 257.40 to USD 242.60.
  • Block: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 110 to USD 95.
  • Booking holdings: JP Morgan maintains its overweight recommendation with a target price of USD 3560, up from USD 3550.
  • Cloudflare: Guggenheim maintains its sell recommendation with a price target reduced from USD 50 to USD 47.
  • Coinbase: Barclays maintains its underweight recommendation and reduces the target price from USD 68 to USD 67.
  • Constellation brands: Deutsche Bank maintains its hold recommendation with a price target raised from USD 244 to USD 249.
  • Dover corporation: Baptista Research upgrades to buy from hold with a price target raised from USD 160.30 to USD 163.
  • Dow: Baptista Research upgrades to outperform from hold with a price target reduced from USD 60.40 to USD 57.90.
  • Eli Lilly: Guggenheim maintains its buy recommendation and raises the target price from USD 670 to USD 675.
  • Expedia group: JP Morgan maintains its neutral recommendation with a price target raised from USD 108 to USD 115.
  • Fortinet: JP Morgan downgrades to neutral from overweight with a price target reduced from USD 67 to USD 52.
  • General motors company:  Baptista Research maintains its hold recommendation with a price target reduced from USD 42.40 to USD 30.90.
  • Insulet corporation: Canaccord Genuity maintains its buy recommendation and reduces the target price from USD 355 to USD 175.
  • Kenvue: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from USD 28 to USD 23.
  • Kla corporation: Baptista Research maintains its hold recommendation with a target price reduced from USD 541 to USD 514.
  • Merck & co: Citi maintains its buy recommendation with a price target raised from USD 130 to USD 135.
  • Microchip technology: JP Morgan maintains its overweight recommendation with a price target reduced from USD 110 to USD 95.
  • Monster beverage corporation: JP Morgan maintains its overweight recommendation with a target price raised from USD 57 to USD 61.
  • Pinterest: William O'Neil & Co Incorporated resumes coverage with a buy rating.
  • Quanta services: B Riley Securities Inc. maintains its buy recommendation and reduces the target price from USD 230 to USD 200.
  • S&p global: Goldman Sachs maintains its buy recommendation with a target price raised from USD 457 to USD 461.
  • Skyworks solutions: JP Morgan maintains its neutral recommendation with a price target reduced from USD 125 to USD 105.
  • Teleflex incorporated: JMP Securities maintains its market outperform recommendation and reduces the target price from USD 315 to USD 285.
  • Ventas: BNP Paribas Exane maintains its outperform rating and raises the target price from USD 47 to USD 54.
  • Zoetis: Barclays maintains its overweight recommendation with a target price reduced from USD 260 to USD 255