Due to lingering concerns over inflation and supply chain disruptions, U.S. stock index futures were flat this morning. While earnings reports have been rather good so far, including Netflix, whose hit show "Squid Game" helped attract more customers than expected, investors are worried about higher costs for companies, which could force them to raise prices. For example, Procter & Gamble face $2.3 billion in expenses headwinds this fiscal year, up from $1.9 billion expected. Bloomberg reports that Apple could produce 10 million fewer iPhone 13 units.
For now, the assumption that sales are good despite supply chain problems is being confirmed and is helping to allay fears about economic growth. But China is still a concern. The country’s real estate sector is still convalescent with the bankruptcy of a small player in the wake of the collapse of China Evergrande, whose listing has still not resumed. The timing of rate hikes is also on investors’ minds.
A highlight today is the debut of the first "Bitcoin ETF" (actually a futures ETF), already affectionately called BITO (the name of its ticker), which is, according to Bloomberg data, the second most traded ETF in its first day of trading after the BlackRock Carbon Fund launched earlier this year. Investors who find the cryptocurrency market still something of a forbidden fruit can find a more flexible form of exposure in these products. The fact that it has been accepted by US authorities brings de facto regulatory recognition, although the debate is far from over regarding these digital assets.
In a slightly different area, but with undeniable connections, we have Facebook plans to change its name. The Verge reveals that the company is looking to position itself as the reference for the "metaverse", this virtual environment that has been much talked about lately.
Finally, it was announced that Jerome Powell, the U.S. central bank chairman, gave up more than $1 million in stock market assets in October 2020. This is creating some controversy, like the one that recently pushed two regional Fed officials into early retirement. Powell, however, only owned a generalist stock (a Vanguard Total Stock Market ETF) and has no specific prohibition. But obviously, when you know the influence that central banks now have on equity markets, the risk of conflict of interest is obvious.
Economic highlights of the day:
British and European consumer prices for September and weekly US oil inventories are on the agenda today.
The dollar is trading at EUR 0.8590. The ounce of gold is up to USD 1,785. Oil is losing some altitude with WTI at USD 81.3 per barrel and Brent at USD 84.11 per barrel. Bond yields continue to rise, at 1.65% for US 10-year debt and -0.11% for the Bund, which has just moved back above Swiss debt (-0.12%). Bitcoin is hovering close to USD 64,500.
* Worldwide interest in the South Korean series "Squid Game" helped draw more new subscribers to Netflix than expected in the third quarter, sending the streaming giant up 3 percent in after-hours trading on Wall Street.
* United Airlines on Tuesday reported a narrower-than-expected adjusted loss for the July-September period thanks to a rebound in air travel demand amid the rollout of COVID-19 vaccines.
* Tesla and IBM will report third-quarter results after the close of Wall Street.
* Verizon Communications on Wednesday reported a better-than-expected increase in subscribers for the third quarter, thanks in part to continued demand for 5G services.
* Abbott Laboratories raised its full-year adjusted profit forecast on the back of a rebound in sales of its Covid-19 diagnostic tests and a strong performance from the group's core businesses that helped it beat expectations on earnings in the current quarter. The stock is up 3% in pre-market trading.
* Biogen raised its earnings and revenue guidance for the current fiscal year, despite what it said were disappointing quarterly sales of its Alzheimer's treatment Aduhelm.
* Anthem raised its full-year outlook following the release of its third-quarter results.
* Baker Hughes missed the Wall Street consensus on its third-quarter earnings, sending the stock down 1.2% in pre-market trading.
* Facebook plans to change its name next week to reflect the group's various applications and especially its "metaverse" project - an online universe in which users interact in shared virtual spaces - The Verge reported Tuesday, citing a source familiar with the matter. The stock is up 1% in pre-market trading.
*Dutch semiconductor equipment maker ASML, a supplier to Intel and others, reported better-than-expected quarterly results Wednesday, but the company's guidance for the current quarter disappointed investors.
* Micron Technology said Wednesday it plans to build a new computer memory plant in the U.S., but added that federal government support would be needed to remain cost competitive in Asia.
* Novavax plunged 15.6% in premarket trading after a report by the news site Politico, citing three sources that the company is facing production problems with its COVID-19 vaccine candidate, including compliance with U.S. health authority quality standards.
* Ford Motor is up 2% in pre-market trading after Credit Suisse upgraded its recommendation to "outperform.
* Vale - The New York-listed Brazilian mining group's stock is down 2% in premarket trading and headed for a third straight session of declines, after the group announced Tuesday that it plans to cut iron ore production by about four million tons in the fourth quarter amid low margins.
- Atlassian: Cowen adjusts price target to $360 from $290, maintains market perform rating
- BHP Group: Jefferies cut the recommendation on BHP Group Plc ADRs to hold from buy. PT inches up 0.3% to $56
- Boohoo: Morgan Stanley upgrades its in-line weighting to Underweight.
- Clarus: DA Davidson adjusts clarus' price target to $40 from $36, keeps buy rating
- Cloudflare: Cowen adjusts price target to $200 from $135, keeps outperform rating
- Galera Therapeutics: BTIG downgrades to neutral from buy
- Illumina: SVB Leerink adjusts price target to $420 from $425, keeps market perform rating
- Magellan Midstream Partners: Barclays adjusts price target to $53 from $50, keeps overweight rating
- Martin Marietta Materials: Exane adjusts price target to $372 from $366, maintains neutral rating
- Micron: Mizuho Securities downgrades to neutral from buy. PT up 11% to $75
- Microsoft: Jefferies still consider the stock as a Buy opportunity. The target price has been lifted and is now set at USD 375 compared to USD 345 before.
- Moneysupermarket: Berenberg upgrades from hold to buy with a target of GBP 275.
- Netflix: JP Morgan has maintained his recommendation on the stock with a Buy rating. The target price has been lifted and is now set at USD 750 compared to USD 705 before.
- Nordson: Wells Fargo adjusts price target to $280 from $270, keeps overweight rating
- Old Dominion Freight Line: BofA Securities adjusts price target on old dominion freight line to $300 from $250, keeps underperform rating
- Philip Morris: SBG Securities cut the recommendation to hold from buy. PT up 11% to $106
- Rio Tinto: Jefferies downgrades to hold from buy. PT up 0.2% to $71
- Target: Goldman Sachs adjusts price target to $308 from $281, keeps buy rating
- Tesla : BofA Securities adjusts tesla's price target to $900 from $800, maintains neutral rating
- Vulcan Materials: Exane adjusts price target to $204.50 from $210, maintains outperform rating
- Western Digital: Mizuho Securities downgrades to neutral from buy. PT set to $62, implies a 11% increase from last price. Western Digital average PT is $88.42.