Gains were driven yesterday by consumer cyclicals and technology, which seem to be getting some kind of revenge after a poor start to the year. On Wall Street, seven of the eight largest stocks are up between 1.8% and 5.6%, things are looking up.

Elon Musk is obviously not satisfied with the freedom of expression on his favorite social network. After raising the idea of creating a new one a few days ago, in a Trumpesque move, he seems to have preferred to become a shareholder. He invested between $2 and $3 billion of a visible fortune valued at $288 billion to take 9.2% of Twitter. Few elements have filtered out apart from the standardized form submitted to the SEC. We learn that Musk intends to be a passive shareholder and that he passed the 5% mark on March 14. Hence the uncertainty about the amount of the investment: we do not know when he started to buy, nor under what conditions. We do know, however, that he has already reaped a nice latent capital gain.

Even if he declared himself a passive investor, having Musk with 9.2% of the capital means that there is an elephant in the room. This will probably weigh on the conduct of operations at Twitter, even if the Tesla boss doesn't stick his nose in directly. I don't know if that's a good or bad thing for free speech. In the past, Musk has mostly cultivated his own freedom of speech, and I can remember a few inglorious episodes of attempts to muzzle his critics. He already asked users today if they want an edit button to be added to the platform.

Whatever Elon Musk's real intentions, his investment in Twitter remains an important event that obviously benefited both stocks yesterday, and more broadly the entire US technology market. To be exact, Tesla also announced slightly better-than-expected deliveries in the first quarter, which is already a small feat when you know the logistical woes of the automotive industry, and the technology compartment also benefited from the rebound of Chinese stocks listed on Wall Street on rumors of easing tensions between Washington and Beijing. Nevertheless, the pulling power of the "technoking of Tesla",  is undeniable. After "Don't fight the Fed", the adage that recommends avoiding betting against the US central bank's policy, now it's time to "Dont' fight the Musk". Short sellers on Tesla have already learned this the hard way.

Meanwhile, Europe is preparing to take stronger sanctions against Russia after evidence of atrocities on civilians in Ukraine.  French president Emmanuel Macron even called for a ban on Russian oil, which sent oil prices up 4.0%.

Today, markets in mainland China and Hong Kong are closed for a public holiday.

 

Today's economic highlights:

The final services PMIs for March are being released throughout the day for the major economies. Also on the agenda, the ISM services index for the US.

The dollar is trading at EUR 0.9122. Gold is up to USD 1931. Oil is also gaining ground, with North Sea Brent at USD 108.15 and U.S. light crude WTI at USD 104.35. US debt yields are stabilizing at 2.40% over 10 years, below the 30, 5 and 2 year maturities. Bitcoin is trading around USD 46,500 a unit.

 

On markets:

* Twitter, which closed Monday on a jump of more than 27% after the announcement of a stake of more than 9% in its capital by Elon Musk, the CEO of Tesla, still takes 3.4% in pre-trade Tuesday to 51.68 dollars. 

* Starbucks fell 1.4 percent in premarket trading Tuesday after losing 3.7 percent the day before in reaction to the announcement that its share buyback plan would be suspended. Wedbush also lowered its recommendation on the stock to "neutral" from "outperform".

* Block- The former Square, a payment services company founded by Twitter founder Jack Dorsey, is down 0.8% in pre-market trading after the group announced that a former employee had access to user data without such authorization.

* KKR cannot confirm its intention to buy Telecom Italia (TIM) for 10.8 billion euros unless the Italian group gives it access to its books, according to two sources citing a letter from the American fund to TIM.

* Lockheed Martin- The U.S. State Department announced Monday evening that it had given the green light to the possible sale of eight Lockheed Martin F-16 fighter jets to Bulgaria for $1.6 billion.

* Airbnb announced on Monday that it is suspending its activities in Russia and Belarus, two countries where users can no longer make accommodation reservations on the platform.

* Meta Platforms- The parent company of Facebook has briefly blocked hashtags related to alleged atrocities committed by Russian forces in Boutcha, a town on the outskirts of Kyiv where the bodies of people shot at close range were discovered, a spokesman for the U.S. group confirmed Monday. UBS also raised its price target for Meta from $250 to $300. The stock is up 0.3% in pre-market trading.

* Pfizer announced Monday evening that it had produced six million doses of its oral COVID-19 treatment Paxlovid in the first quarter, in line with the company's targets.

* Imara- The company's shares plunged 30% in premarket trading after announcing the discontinuation of tovinontrin, an experimental treatment for sickle cell disease.

* Theravance Biopharma announced Monday night that ampreloxetine, its experimental treatment for low blood pressure, had failed to meet its primary endpoint in clinical trials.

* West Virginia's attorney general said Monday that Johnson & Johnson, Teva Pharmaceuticals Industries and AbbVie subsidiary Allergan should be held accountable for the state's opioid addiction "tsunami" at the start of a trial in Kanawha County.

* Verizon subsidiary TracFone Wireless signed a $13.4 million settlement to end an investigation into an alleged violation of the False Claims Act in connection with the Federal Communications Commission's (FCC) Lifeline program, which provides subsidies to low-income customers, the U.S. Department of Justice announced Monday.

* Disruptive Technology Solutions and affiliated funds have filed an arbitration claim against Morgan Stanley with the Financial Industry Regulatory Authority in connection with an investigation into whether the bank discreetly tipped off its preferred clients about pending so-called "block trades" involving a large number of securities, the Wall Street Journal reported.

Analyst recommendations:
  • CBRE Group: Goldman Sachs reinstated coverage with a recommendation of buy. PT up 20% to $111.
  • Domino's Pizza: Cowen analyst cut the recommendation to market perform from outperform. PT down 3.4% to $390.
  • Fidelity National: Wells Fargo Securities reinstated coverage with a recommendation of overweight. PT up 28% to $132.
  • GlaxoSmithKline: Jefferies remains Buy with a price target raised from GBp 1925 to GBp 2100.
  • Jones Lang: Goldman Sachs reinstated coverage with a recommendation of sell. PT down 9% to $217.
  • Michelmersh Brick: Berenberg starts to follow up with a Buy rating of GBp 160.
  • Ralph Lauren: Wells Fargo Securities downgrades to equal-weight from overweight. PT down 4.4% to $110.
  • VF Corporation: Wells Fargo Securities cut the recommendation on VF Corp. to equal-weight from overweight. PT up 1.9% to $58.
  • The TJX Companies: Wells Fargo cut the recommendation to equal-weight from overweight. PT down 3.3% to $60.