Wall Street closed its first session of 2023 down. Not on its lows, but still down, hampered by a part of its technology segment and by all of its oil companies. Apple even briefly saw its capitalization fall below the $2,000 billion mark. This is a symbol of investors' fears about the consequences of the economic slowdown that is taking shape this year.

This morning, Wall Street's main indexes opened higher, ahead of the release of the Fed's minutes from its December policy meeting, as investors hope for clues on the future pace of interest rate hikes. It looks like investors are increasingly believing that central banks will be forced to cut rates sooner than expected to avoid damaging economies too much as recession looms.

The Dow Jones inched up 0.09% at the open, the S&P 500 was up 0.42%, while the Nasdaq Composite gained 0.78%.

There's some good news, at least in the EU, since the latest inflation data published in Germany and French both show that inflation cooled down more than expected. On another note, mild temperatures and global growth fears have eased pressure on oil (and gas), which explains the big sell-off in energy stocks and some renewed confidence about inflation.

In China, authorities are reportedly considering new measures to support "too big to fail" developers. Local equity markets are fluctuating with the many reassuring or worrying news about the pandemic. In recent hours, optimism has taken over, even though Beijing has announced the postponement of certain investments to create an autonomous semiconductor industry in the country, in response to US restrictions. Meanwhile, it is also reportedly discussing a partial lifting of the import ban on Australian coal, according to Bloomberg.

A few words on cryptocurrencies too, with Sam Bankman-Fried pleading not guilty to the charges against him in the FTX / Alameda case, apparently to buy time for his defense. The US federal banking regulatory agencies issued a joint statement to reiterate their caution towards cryptoassets.

 

Economic highlights of the day:

The final version of the December PMI indicators for the world's major economies are on the agenda, this time for services. In the US, there will also be the JOLTS survey on job openings in December and the minutes of the last Fed meeting. All the agenda is here. 

The dollar is down to EUR 0.9425 and GBP 0.8304. The ounce of gold is strengthening to 1857 dollars. Oil retreats, with North Sea Brent crude at USD 79.17 a barrel and US light crude WTI at USD 74.11 The yield on 10-year US debt is falling to 3.73%. Bitcoin is still hovering around USD 16,800.

 

In corporate news:

* Apple's iPhone sales through the three major U.S. telecom carriers rose in November month over month, a sign that demand remains strong, JP Morgan said. Apple shares were up 1% in premarket trading.

* Oil companies Exxon Mobil and Chevron were down 1% and 1.2%, respectively, as oil prices fell on concerns about Chinese demand.

* Salesforce was up 2% in premarket trading as the software company announced Wednesday it plans to cut about 10% of its global workforce and close some of its offices as part of a restructuring plan.

* Microsoft was down 2.2% in premarket trading after UBS lowered its recommendation on the company to "neutral" from "buy".

* Rivian Automotive - The electric vehicle maker said Tuesday it narrowly missed its full-year 2022 production target of 25,000 cars.

* U.S.-listed Chinese companies are indicated higher in pre-market trading on hopes for a post-Covid recovery in the Chinese economy. Baidu, Pinduoduo and JD.com were up 4.9% to 6.4%. Alibaba gained 6.7% after its subsidiary Ant Group received approval from Chinese regulators to raise 10.5 billion yuan for its consumer division.

 

Analyst recommendations:

  • Air Products: Baptista Research initiated coverage with a recommendation of hold. PT set to $325.
  • Bank of New York Mellon: Goldman Sachs raised its recommendation to buy from neutral. PT up 27% to $59.
  • The Boston Beer Co: Jefferies downgrades to underperform from hold. PT down 15% to $275.
  • Capricorn Energy: Jefferies downgrades from buy to hold, targeting GBp 270.
  • Celanese: RBC Capital Markets upgrades to outperform from sector perform. PT up 22% to $125.
  • Chart Industries: Raymond James upgrades to strong buy from market perform. PT jumps 39% to $160.
  • Crown Holdings: Baird downgrades to neutral from outperform. PT down 3% to $80.
  • CVS Group: Jefferies downgrades from buy to hold, targeting GBp 2060.
  • Ezcorp: Canaccord Genuity initiated coverage with a recommendation of buy. PT jumps 68% to $14.
  • Forward Air: Jefferies downgrades to hold from buy. PT up 5.1% to $110.
  • Indivior: Jefferies remains Buy with a price target raised from GBp 2305 to GBp 2655.
  • Kimberly-Clark: Jefferies downgrades to hold from buy. PT up 1.4% to $139.
  • Morgan Stanley: Wolfe Research downgrades to underperform from outperform. PT up 7.3% to $92.
  • National Grid: Investec upgrades to buy from add. PT up 24% to 1,240 pence.
  • Norfolk Southern: Wells Fargo Securities downgrades to equal-weight from overweight. PT down 1.1% to $245.
  • Schwab: Goldman Sachs upgrades to buy from neutral. PT up 20% to $98.
  • Rolls-Royce: Panmure Gordon & Co downgrades to sell from hold. PT down 46% to 53 pence.
  • Sealed Air: Citi downgrades to neutral from buy. PT up 1.5% to $51.
  • SM Energy: J.P. Morgan downgrades to neutral from overweight. PT rises 44% to $46.
  • Tullow Oil: Jefferies remains Hold with a price target reduced from GBp 40 to GBp 36.92.