Fed minutes and inflation data set to stir Thanksgiving week

As the curtain falls on the quarterly corporate releases, the spotlight shifts to central banks, just as the new US administration settles in. December promises to be a month of high stakes on both sides of the Atlantic. The appointment of Scott Bessent as head of the US Treasury is perhaps the most significant news as November draws to a close. His selection seems to bridge the gap between Donald Trump's election and the anticipated year-end rally.

US equity futures are on the rise as we kick off the week, buoyed by anticipation of the Federal Reserve's meeting minutes and a key inflation report. The Dow Jones Industrial Average futures climbed 0.8%, with the S&P 500 and Nasdaq futures both up 0.7%. Investors are eagerly awaiting the Federal Open Market Committee's minutes on Tuesday, followed by the Personal Consumption Expenditures price index on Wednesday. The US stock markets will take a breather on Thursday for Thanksgiving and will close early on Friday.

Across the pond, the Eurozone is bracing for potential interest rate cuts from the European Central Bank (ECB), spurred by lackluster purchasing managers' index data. ECB Chief Economist Philip Lane has stressed the importance of avoiding overly restrictive monetary policy to foster economic growth and meet inflation targets. In the European banking sector, Unicredit is making waves with an offer for Banco BPM shares and an interest in boosting its stake in Commerzbank, aiming to forge a European banking giant. 

In the US, Trump appointed Scott Bessent as head of the US Treasury. His pragmatic approach brings a sense of stability to Wall Street, which values rising equity markets over political affiliations.The dollar's ascent paused with Bessent's appointment. Currently at the helm of the macro hedge fund Key Square Group, he's a market-savvy free trade advocate who supports using tariffs to combat dumping. His diverse background - He has long worked for George Soros (not Trump's best friend), is gay, doesn't much like Jerome Powell and doesn't mince his words - adds a refreshing complexity to the incoming administration.

In Europe, the Stoxx Europe 600 index rebounded by 1% last week, buoyed by German and British equities. In the US, Trump's post-re-election surge gave way to a slight dip, but the rally resumed, with the S&P 500 posting five consecutive days of modest gains. It's now less than 1% shy of its peak above 6,000 points. The S&P 500 is poised for a 25% rise in 2024, outpacing the Stoxx Europe 600's 6.15% increase. Once again, New York leads the charge. 

COP29 concluded with an agreement that left no one entirely satisfied, yet managed to triple the funds for developing countries grappling with climate change.

In Asia, Huawei's launch of a phone with its own operating system signals further technological decoupling between China and the US.

As the quarterly publication season winds down, a few notable names remain on the docket this week: Dell, Agilent, Alimentation Couche-Tard, Compass, and EasyJet. The PCE inflation report and Fed meeting minutes are the week's main attractions. In Europe, Germany will unveil its first estimate of November inflation on Thursday.

Overnight, Japan's Nikkei 225 continued its rebound, gaining 1.1%. China, however, sees red, with Hong Kong down 0.4% and the CSI300 off by 0.8%. South Korea and India ride the US market's coattails, each gaining over 1%, while Australia sees modest gains of 0.3%. European indicators are pointing upwards.

Today's economic highlights:

The German Ifo business confidence index and the Chicago Fed index are on the calendar today.

The dollar is down to EUR 0.9506 and GBP 0.7935. The ounce of gold is worth USD 2,685. Oil regained some ground, with North Sea Brent at USD 74.45 a barrel and US light crude WTI at USD 70.98. The yield on 10-year US debt is slightly down to 4.32%. Bitcoin is worth USD 97,700.

In corporate news:

• Insiders at Palantir Technologies recently sold shares totaling approximately $31.8 million.
• The U.S. government is set to decrease Intel Corp's initial $8.5 billion CHIPS grant to under $8 billion, amidst reports of Lattice Semiconductor's interest in acquiring Intel's Altera unit and concerns over delayed investments and a new military contract.
• Indonesia rejected Apple's $100 million investment proposal due to insufficient local content, Corning proposed ending an EU antitrust investigation by waiving exclusive clauses, India's regulator denied Apple's request to pause an antitrust report, and Apple's CEO visited China amid trade concerns.
• Bath & Body Works exceeded expectations in fiscal Q3 with adjusted earnings of $0.49 per share and revenue of $1.61 billion, surpassing both the previous year's earnings and analysts' forecasts, and provided EPS guidance for fiscal year 2024.
• Quikrete Holdings is set to acquire Summit Materials in an $11.50 billion go-private deal, while Unilever's India unit plans to spin off its ice-cream division.
• Old National Bancorp, an Indiana-based regional lender, has agreed to acquire Minnesota-based Bremer Financial for about $1.4 billion in cash and stock, alongside pricing a $400 million common stock offering.
• The FAA is reviewing Boeing 737 MAX engines following two bird strike incidents that caused cockpit smoke, alongside recent crashes involving a Boeing 737-400 cargo plane and a DHL cargo plane in Lithuania, resulting in one fatality and three injuries.
• Newmont has agreed to sell its Eleonore mine in Northern Quebec to UK-based Dhilmar for $795 million in cash.
• Tesla settled a lawsuit against Rivian regarding accusations of poaching employees and misappropriating trade secrets, while Elon Musk's mother gains popularity in China.
• Freightos reported a Q3 revenue of $6.2M and a loss of $0.04 per share, surpassing Street estimates, alongside the stepping down of CFO Ran Shalev.

Analyst recommendations:

• Berry Global Group, Inc.: Citi upgrades to neutral from rating suspended with a target price of USD 76.
• Eagle Materials Inc.: Loop Capital Markets downgrades to hold from buy with a target price of USD 315.
• Elastic N.v.: Wedbush upgrades to outperform from neutral with a price target raised from USD 95 to USD 135.
• Five Below, Inc.: Telsey Advisory Group downgrades to market perform from outperform with a price target reduced from USD 102 to USD 95.
• Hca Healthcare, Inc.: Wells Fargo downgrades to underweight from equalweight with a price target reduced from USD 400 to USD 320.
• M&T Bank Corporation: Citi downgrades to neutral from buy with a price target raised from USD 220 to USD 230.
• Robinhood Markets, Inc.: Morgan Stanley upgrades to overweight from equal weight with a price target raised from USD 24 to USD 55.
• Snowflake Inc.: Wedbush upgrades to outperform from neutral with a price target raised from USD 160 to USD 190.
• Tenet Healthcare Corporation: Wells Fargo downgrades to equalweight from overweight with a price target reduced from USD 205 to USD 150.
• Us Bancorp: Citi upgrades to buy from neutral with a price target raised from USD 49 to USD 65.
• Block, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 90 to USD 110.
• Confluent, Inc.: JP Morgan maintains its overweight recommendation and raises the target price from 29 to USD 35.
• Crowdstrike Holdings, Inc.: Evercore ISI maintains its outperform recommendation and raises the target price from USD 325 to USD 400.
• Eqt Corporation: Morgan Stanley maintains its overweight rating and raises the target price from USD 45 to USD 56.
• Expand Energy Corporation: Wells Fargo maintains its equalweight recommendation and raises the target price from USD 83 to USD 100.
• Ge Vernova Inc.: RBC Capital maintains its outperform rating and raises the target price from USD 285 to USD 376.
• Icon Public Limited Company: Redburn Atlantic maintains a neutral recommendation with a price target reduced from USD 311 to USD 232.
• Microstrategy Incorporated: Bernstein maintains its outperform recommendation and raises the target price from USD 290 to USD 600.
• Morgan Stanley: Citigroup remains neutral recommendation with a price target raised from USD 105 to USD 135.
• Nvidia Corporation: Guotai Junan Securities Co., Ltd. maintains its overweight recommendation and raises the target price from 138 to USD 178.
• Palantir Technologies Inc.: Wedbush maintains its outperform rating and raises the target price from USD 57 to USD 75.
• Reddit, Inc.: JMP Securities maintains its market outperform recommendation and raises the target price from USD 118 to USD 160.
• Salesforce.com, Inc.: Truist Securities maintains its buy recommendation and raises the target price from USD 315 to USD 380.
• Symbotic Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from 31 to USD 45.
• 3I Group Plc: Morgan Stanley upgrades to overweight from equal weight with a price target raised from GBX 3192 to GBX 4069.
• BT Group Plc: AlphaValue/Baader Europe downgrades to reduce from add with a price target raised from GBX 159 to GBX 160.
• JD Sports Fashio: Deutsche Bank upgrades to hold from sell with a target price of GBX 110.
• Barrick Gold Corporation: CIBC Capital Markets downgrades to neutral from outperform with a price target reduced from USD 27 to USD 22.