The prospect of punitive monetary policy coming to an end in the US is enough to keep investors happy. They continue to sweep under the carpet the fact that banking stocks continue to suffer, battered by a loss of confidence that, curiously, does not really affect risk appetite. Perhaps because the markets are convinced that monetary authorities will always be there for them. Janet Yellen, the head of the US Treasury, is a clear example after backtracking on comments she made the day before that there would be no blanket deposit guarantee in the US. However yesterday, she watered down her statement by saying that depositors would be supported in the event of a crisis.

In the meantime, the emergency mechanism set up by the Fed to guarantee the liquidity of US financial institutions is popular and is also working hard for loans to foreign central banks. This made a Reuters editorialist say this morning that the Fed is really the world's lender of last resort. US equity markets are comfortable with this: the Nasdaq rallied another 1.3% yesterday, for its seventh gain in the last nine sessions. The S&P500 was less buoyant, weighed down by banks that limited its gains to 0.3%. The European markets were more mixed but generally close to balance, except in London where the FTSE 100 lost 0.9% as the Bank of England had to tighten rates again due to inflation which remains high in the UK.

Today’s session will be marked by the release of the preliminary PMI activity indicators for the major economies. Japan was the worst performer, with manufacturing activity contracting, but slightly less than expected. Data in the United States will follow in the morning.

Orders for all durable goods declined unexpectedly in February, even though business equipment demand picked up. They were down 1.0% vs +0.6% expected.

Stock futures were down this morning on renewed fear of contagion as Deutsche Bank shares tumbled about 11% in premarket trading after the German lender’s credit default swaps rose without a clear cause.

 

Economic highlights of the day:

To close the week, the March Flash PMI indicators for the major economies will be released throughout the day. All the agenda is here. 

The dollar is up 0.7% against the euro to EUR 0.9303 and up 0.6% against the pound to GBP 0.8191. The ounce of gold is just under USD 2000. Oil fell , with North Sea Brent at USD 73.22 a barrel and US WTI light crude at USD 67.98 The yield on US 10-year debt fell to 3.38%. Bitcoin is trading around USD 27,900.

 

In corporate news:

  • Block was down another 4.2 percent in premarket trading after a 14.8 percent drop on Thursday, following accusations by private equity firm Hindenburg Research that the payment platform's user base is artificially inflated. Hindenburg added that it had short positions in the group's stock.
  • Activision Blizzard, Microsoft - The UK regulator announced that Microsoft's takeover of Activision should not harm competition in the video game console segment, but that it remained concerned about other complaints. Activision shares were up 5% in premarket trading and Microsoft was down 0.5%.
  • Coinbase Global was down 3.4% in premarket trading after TD Cowen lowered its recommendation to "underperform" from "in-line performance".

 

Analyst recommendations:

  • Cintas: Baptista Research initiated coverage with a recommendation of hold. PT set to $471.
  • Coinbase: Cowen analyst Stephen Glagola cut the recommendation to underperform from market perform. PT down 46% to $36.
  • Eastman Chemical: Baptista Research initiated coverage with a recommendation of hold. PT set to $90.10.
  • First Horizon: Wells Fargo Securities upgrades to overweight from equal-weight. PT up 58% to $25.
  • Healthcare Services: Jefferies upgrades to hold from underperform. PT up 13% to $14.
  • Hunting: J.P. Morgan upgrades from neutral to overweight targeting GBp 350.
  • KB Home: J.P. Morgan upgrades to neutral from underweight. PT up 7.4% to $42.50.
  • Regeneron: Jefferies upgrades to buy from hold. PT up 15% to $925.