Wall Street slipped yesterday, losing 0.21%, but has still posted eight gains in the last eleven sessions, with the other two non-gaining sessions ending with daily scores of 0% and -0.02%. This gives an idea of the buying frenzy since the market is almost convinced that the Fed will start lowering rates in September. Another noteworthy event yesterday was the Dow Jones hitting the 40,000-point mark for the first time in its history. European stocks are also doing well, with the Stoxx Europe 600 Net Return, which includes the largest capitalizations of the old continent, reaching a new record at 1266 points, showing an 11% gain since January 1st.
In short, the latest macroeconomic data remains poor or mediocre, which is good news for financiers as it undermines the likelihood of a sustained inflation rebound. Anything that points to a monetary policy easing in 2024 is good for investors. Meanwhile, companies continue to exceed expectations with their results. The latest source of optimism comes from Walmart, which revised its annual targets upwards while stating that it expects inflation to decline, boosting American consumption. These magic words sent the retail giant soaring by 7%, lifting the entire consumer sector with it.
Today's spotlight will be on China, which is in the news with a new series of mixed economic statistics. Industrial production rebounded stronger than expected in April (+6.7% versus +5.5% expected). However, retail sales were disappointing, slowing again to +2.3% (below the +3.7% expected). This mixed picture is reflected in Chinese stock performance this morning, with Hong Kong up and Shanghai down. The main focus today is on new measures to revive the real estate sector. Bloomberg notes that a meeting will be held today between representatives of major banks, local governments, and real estate developers.
In other news, company earnings reports continue at a low pace, with all eyes on Nvidia, which will unveil its quarterly results next week. The macro agenda has only one item of interest today: the final reading of April's eurozone inflation, which has less impact than the flash estimate.
Finally, as mentioned at the beginning, today is the third Friday of the month, the day of monthly options expiration, usually causing some technical adjustments in the afternoon. In the Asia-Pacific region this morning, mainland China is down while the Hang Seng is up 0.15% as of this writing. Japan is also losing ground (-0.46%). India is stable in the green (+0.3%) while Australia is down 0.75%. 
Economic highlights:
Light schedule today with the Leading Index for April at 10:00 AM. Full agenda here.
The dollar rises to 0.9226 EUR and 0.7907 GBP. Gold returns to near its highs at 2387 points. Oil stabilizes, with Brent crude at 83.21 USD per barrel and U.S. light crude WTI at 78.79 USD. The yield on 10-year U.S. debt reaches 4.386%. Bitcoin trades around 66,280 USD.
In corporate news:
  • Microsoft announced Thursday that it plans to offer customers of its cloud computing products access to AI chips made by AMD, capable of competing with Nvidia's components. Additionally, the European Commission stated Friday that it might fine Microsoft if it doesn't provide adequate information by May 27 on the risks associated with the generative AI functions in its internet search engine Bing.
  • Applied Materials, the semiconductor equipment manufacturer, announced Thursday that it expects third-quarter revenue to exceed Wall Street estimates, driven by robust demand fueled by an AI boom.
  • Take-Two Interactive lowered its game booking projections for fiscal 2025 on Thursday, raising fears that the release of its highly anticipated "Grand Theft Auto VI" might be delayed. The stock is down 2.8% pre-market.
  • Ford Motor has asked its electric vehicle suppliers to cut costs to support profitability, stating that "everything is on the table" to improve profitability, according to an internal memo seen by Reuters.
  • Airline Sector - Joe Biden signed a sweeping law on Thursday that will increase air traffic controller staffing, boost funding to prevent runway closures, and make refunds for canceled flights quicker.
  • Reddit - ChatGPT, designed by OpenAI, will be able to draw from content on the social media platform, the two companies announced Thursday. The stock is up 14% pre-market.
  • GameStop rebounds 10% pre-market and AMC Entertainment is up 4.9% amid renewed interest in "meme stocks" after two sessions of respective total declines of 43% and 32%.
  • DXC Technology - The IT management company announced Thursday that it expects first-quarter revenue below expectations, anticipating a reduction in client spending due to economic uncertainty. The stock is down 21.6% pre-market.
  • Under Armour - JP Morgan downgraded its rating from "neutral" to "underweight".

Analyst recommendations:

  • Abbvie: Cantor Fitzgerald initiates an overweight recommendation with a target price of USD 200.
  • Applied Materials: Citigroup maintains its buy recommendation and raises the target price from USD 211 to USD 250.
  • Corpay: Wolfe Research downgrades to underperform from peerperform with a target price of USD 295.
  • Darden Restaurants: BTIG upgrades to buy from neutral with a target price of USD 175.
  • Deere & Company: Oppenheimer maintains its outperform recommendation and raises the target price from USD 456 to USD 465.
  • Delta Air Lines: Wolfe Research maintains its outperform recommendation and raises the target price from USD 60 to USD 66.
  • Dr Horton: Citigroup maintains its buy recommendation with a price target reduced from USD 191 to USD 181.
  • Epam Systems: Wolfe Research downgrades to peerperform from outperform.
  • Grab Holdings Limited: Autonomous Research maintains its underperform recommendation and reduces the target price from USD 4 to USD 3.80.
  • Intercontinental Exchange: Redburn Atlantic maintains its buy recommendation and raises the target price from USD 166 to USD 167.
  • Netflix: Rosenblatt Securities Inc. maintains a neutral recommendation with a price target raised from USD 540 to USD 554.
  • Pultegroup: Citigroup remains neutral recommendation with a price target raised from USD 127 to USD 129.
  • Ross Stores: Gordon Haskett maintains its buy recommendation and raises the target price from USD 154 to USD 165.
  • Take-Two Interactive: ROTH MKM maintains its buy recommendation and reduces the target price from USD 185 to USD 180.
  • United Airlines Holdings: Wolfe Research upgrades to outperform from peerperform with a target price of USD 76.
  • Walmart: TD Cowen maintains its buy recommendation and raises the target price from USD 68 to USD 75.