April inflation is still too high, but it has come down more than expected. The Empire State business index and house prices data were weak, while retail sales were depressing. Translation? Activity is slowing, but so is inflation, so the Fed has more leeway to cut rates in preparation for economic recovery.

However, today, the president of the Federal Reserve Bank of New York, John Williams, told Reuters that April’s CPI data is not enough to call for the Fed to cut interest rates sometime soon. Nevertheless, the market is back to its blue-sky scenario of a soft economic landing. Inflation is too high in relation to targets, but it's on the right track. The glass is half-full, even if the incorrigible contrarians have pointed out the flaws in this optimism: prices are still overheating and the favorable basis for comparison, which is helping the downturn, will come to an end with the June data (May should still benefit from a boost). Speculative naysayers find cause for alarm. They point to the runaway success of the last seven months (Bloomberg last night put forward the figure of an $11,000 billion increase in the valuation of US equities since the lows of October) or the return of the equity frenzy (even if they did get a bit heckled yesterday). They are concerned about the huge gap between Wall Street's upbeat mood and the low morale of American consumers, which they blame on growing inequality between the wealthy and the rest of the population.

But grumblers have no say during these phases. The European stock markets joined in the party, as they resumed or continued their upward trend yesterday. Nevertheless, the French CAC40 was in poor form, with TotalEnergies down and luxury goods stocks suffering from Burberry's poor figures. Alongside Salvatore Ferragamo and Kering, the British group has been the sector's ugly duckling for some time. The broad Stoxx Europe 600 index posted its ninth consecutive session in the green. At 524 points, it had never reached such heights. Including dividends, it gained 11.1% in 2024. Better than the Nasdaq 100, which yesterday gained another 1.5% to set a new record. And for good measure, the S&P500 and Dow Jones also broke through the ceiling, and so did the British FTSE 100. It's also worth noting that the rise is more evenly distributed than it was at the start of the year, when the big tech locomotives were dragging everyone down. Since April 18, the Russell 2000 (small and mid-caps) gained 8%, while the S&P 500 and the S&P 500 Equal Weight Index rose by roughly the same amount (5.5%). This means that small companies are finally benefiting from the market's rise, and that the big S&P500 stocks are no longer the only ones making progress.

So things are looking pretty good on the eve of the end of the trading month (the clearing session, which takes place on the 3rd Friday of the month, is tomorrow). In the Asia-Pacific region, the Chinese market, rather apathetic yesterday when rumors spread of a vast plan to buy back empty homes to relieve developers, has taken the measure of the announcement. Hong Kong rallied sharply, taking Shanghai in its wake. All this as Vladimir Putin arrived in China for a two-day official trip to celebrate the alignment of positions between Moscow and Beijing on several hot topics of the moment. Japan and South Korea closed up 0.8 to 0.9%, while Australia shone with a 1.8% gain, fueled by hopes of monetary easing. India remains unchanged, as has often been the case since the start of the year. European indices are mixed, with the Stoxx EU 600 hovering near zero, and so are futures on Wall Street.

Economic highlights:

US building permits & housing starts, new jobless claims and the Philadelphia Fed's business outlook are on the agenda, along with industrial production will be released. The full agenda is here. 

The dollar is up to EUR 0.9202 and GBP 0.7898. The ounce of gold is trading at USD 2,384. Oil is holding its ground, with North Sea Brent at USD 83.00 a barrel and US light crude WTI at USD 78.62. The yield on 10-year US debt is down 4.32%. Bitcoin is trading at USD 66,300.

In corporate news:

  • Cisco Systems on Wednesday forecast sales ahead of Wall Street estimates for the fourth quarter, thanks to a recovery in corporate spending and fewer logistical constraints. The stock gained 4.8% in pre-market trading.
  • Deere & Co fell by 5.1% in pre-market trading, as the agricultural equipment specialist cut its annual profit forecast for the second time, against a backdrop of farmers buying fewer tractors and combines due to lower crop prices.
  • Walmart is down 1.2% in pre-market trading ahead of the publication of its quarterly results.
  • Under Armour gains 1.5% in pre-market trading as its quarterly results are expected before the opening in New York.
  • Berkshire Hathaway reported on Wednesday a new $6.72 billion (€6.18 billion) investment in insurer Chubb, which gained 9.8% before the opening.
  • AT&T has signed an agreement with Ast Spacemobile to provide a high-speed network from space directly to cell phones, the two companies announced on Wednesday. AST gained 36% in after-hours trading.
  • Microsoft has asked some of its China-based employees to consider transferring out of the country, the group announced on Thursday, as Sino-American relations strain against a backdrop of rivalry in new technologies.
  • Netflix said Wednesday that 40 million users had subscribed to its ad-supported subscription service, up from 5 million a year earlier, a sign that its efforts to attract new users are working.
  • Meme stocks Gamestop and AMC Entertainment fall further before trading, by 16.2% and 12% respectively, after the recent rally in the sector.
  • Nio - The Chinese electric vehicle manufacturer launched the first vehicle of its new low-cost brand Onvo on Wednesday, aiming to compete with Tesla's Model Y, the world's best-selling electric vehicle.
  • IBM plans to hire up to 800 more people in Ireland to help build software based on artificial intelligence (AI), state investment agency IDA Ireland said Thursday.
  • Bristol-Myers Squibb - The U.S. Food and Drug Administration on Wednesday approved the expanded use of the group's Breyanzi cancer cell therapy.
  • Civitas Resources - The oil and gas producer announced that the Canada Pension Plan Investment Fund would halve its stake in the group.
  • Gates Industrial - The industrial machinery company announced that Blackstone would sell 17.5 million of its shares through a secondary offering.

Analyst recommendations:

  • Devon Energy Corporation: Gerdes Energy Research LLC upgrades to buy from neutral with a target price of USD 60.
  • Ecolab Inc.: Evercore ISI maintains its in-line recommendation and raises the target price from USD 195 to USD 250.
  • Quest Diagnostics Incorporated: Argus Research Company maintains its buy recommendation and raises the target price from USD 163 to USD 215.
  • Texas Instruments Incorporated: Wells Fargo initiates an underweight recommendation with a target price of USD 150.
  • Stryker Corporation: Mirae Asset Securities initiates a trading buy recommendation with a target price of USD 374.
  • Cisco: Wells Fargo maintains its equalweight recommendation and raises the target price from USD 52 to USD 57.
  • Intuitive Surgical, Inc.: Mirae Asset Securities initiates a trading buy recommendation with a target price of USD 443.
  • Britvic Plc: Deutsche Bank downgrades to hold from buy with a price target raised from GBX 1040 to GBX 1080.
  • Travis Perkins Plc: Barclays upgrades to overweight from equalweight with a price target raised from GBP 7.60 to GBP 10.50.
  • Burberry Group Plc: CIC Market Solutions maintains a neutral recommendation with a price target reduced from GBP 12.50 to GBP 12.
  • Shopify Inc.: Daiwa Securities maintains its outperform recommendation and reduces the target price from USD 90 to USD 70.