Stocks made up some of their losses yesterday after the slide caused by worse-than-expected consumer prices data April, as investors fear that rising inflation will put an end to the accommodative policy of central banks. But several Fed officials have tried to reassure them, saying that there is no intention to withdraw that support, and that there would need to be several more months of data on jobs and inflation before any decision would be made.
The weekly balance sheet is likely to be negative on stock markets, as the acceleration of inflation in the US has revived the debate on the duration of the US central bank's accommodative monetary policy. And the discussion is far from over.
Yesterday also saw the recovery of the technology sector, which was severely shaken this week. The only real exception among the large companies listed in the United States yesterday was Tesla, as the electric vehicle manufacturer lost another 3%, bringing its contraction since the beginning of the week to 15%, due to problems faced by the company in China. This represents the evaporation of a hefty fifty billion dollars. The American carmaker saw its sales drop in China by 27% in April, according to the latest figures from the China Passenger Car Association (CPCA). On several occasions in recent months, the Chinese press has expressed concern about dozens of cases of malfunctioning Tesla cars, including battery fires and brake failures.
Discussions on inflation will remain at the heart of the debate for some time. Investors are recalibrating their portfolios accordingly. It so happens that the strategic choices made in recent months (less technology, more low-valued traditional economy) are in line with this macroeconomic context of rising prices and strong economic recovery. This is no coincidence, of course, but it does support recent choices.
Let’s keep an eye on growth projections, which are taken for granted. Even relatively modest downward adjustments could change the mood. Where might the adjustments come from? From the situation in India, for example, whose health crisis will necessarily weigh on growth projections.
Today's economic highlights:
April retail sales, industrial production and the University of Michigan's consumer confidence index for May and business inventories for March.
The dollar is stabilizing at EUR 0.8251, while the ounce of gold is up to 1834 USD. Oil rises to USD 67.89 per barrel of Brent and USD 64.59 per barrel of WTI. The yield on the U.S. 10-year government bond is falling to 1.65%. Bitcoin is trading at USD 50,400.
* Tesla is in talks with Chinese low-cost battery maker Eve Energy to integrate it into the supply chain of its Shanghai plant, four sources told Reuters. The stock is up about 3 percent in pre-market trading.
* Walt Disney - The entertainment group's video-on-demand service's perceived disappointing growth overshadowed a better-than-expected quarterly profit. Disney's stock is up 3.7% in premarket trading.
* General Mills announced Friday that it will buy the pet food division of TYSON FOODS for $1.2 billion in a cash deal.
* Amazon.com announced Friday that it will create 10,000 new permanent jobs in the U.K. by 2021, bringing its workforce in the country to more than 55,000.
* Airbnb reported first-quarter revenue and bookings ahead of Wall Street expectations, as the speed of vaccine campaigns and the easing of restrictions related to the Covid-19 pandemic pushed more people to book vacation rentals.
* DoorDash raised its forecast for annual gross orders and reported above-consensus quarterly revenue as stimulus measures supported demand for meal delivery services in the first quarter. The stock is up 6% in pre-market trading. CFRA raised its recommendation to "hold" from "sell" and several other intermediaries raised their price targets.
* State Street will pay a $115 million fine to end charges that the bank misled customers by overcharging for certain fees, the Justice Department announced Thursday.
- American Well : Credit Suisse lowers Price Target to $17.50 from $23, stays Neutral
- Bayer: Warburg Research emains Neutral. The target price is unchanged at EUR 74.
- Burberry: Jefferies remains Hold with target price raised to GBP 2100 from GBP 2050.
- Compass: Jefferies remains a Hold with a target price raised from GBp 1430 to GBp 1440.
- Danone: Goldman Sachs upgraded from neutral to sell with a target price of EUR 53.
- Diamondback Energy : Siebert Williams Shank lifts PT to $122 From $91, keeps Buy rating
- Haemonetics : Needham lowers Price Target to $86 From $108 on disappointing EPS guidance , keeps Buy rating
- Hugo Boss: LBBW upgrades from buy to hold with EUR 45 target.
- The Home Depot : Gordon Haskett raises PT to $374 From $316, maintains Buy rating
- MetLife : Credit Suisse ups PT to $68 from $55 , keeps Outperform rating
- Nielsen : BMO Capital adjust PT to $33 From $30, remains Outperform
- Laredo Petroleum : Siebert Williams Shank upgrades to Buy From Hold, Adjusts PT to $66 From $40
- Lowe's : Oppenheimer upgrades to Outperform from Perform, sets $235 Price Target
- LVMH: Goldman Sachs remains Buy with a price target raised from EUR 660 to EUR 700.
- Prudential Financial : Evercore ISI rise Price Target to $102 From $96, maintains In-Line rating
- Ryanair Holdings: Credit Suisse maintains his Buy rating on the stock. The target price remains unchanged at EUR 17.91.
- Sage Group: J.P. Morgan upgraded from Underweight to Neutral, targeting GBP 630.
- Spirax: Goldman Sachs changes from sell to neutral with a target of GBp 11,400.
- Wendy's : Goldman Sachs raises PT to $24 From $22, stays Neutral