The U.S. trade in goods deficit narrowed 15.6% to $83.3 billion in November, according to the Commerce Department, while economists expected the deficit to reach $97 billion.

The data also showed a 1% gain in wholesale inventories in November, while the Bloomberg consensus expected a 0.4% rise, following a 0.5% increase in the previous month.

Last week, equity markets experienced a clash between the rise of the European indices and the fall of Wall Street. More specifically, the S&P500 lost 0.20% over the week, while the Nasdaq 100 sank 2.30%, weighed down by the decline in technology stocks. In Europe, the Stoxx Europe 600 gained 0.64% and the French CAC40 gained 0.84% over the last five sessions. Japan’s Nikkei dropped 4.69% over the last five sessions, after the Bank of Japan’s surprise move towards ending its accommodating policy.

These diverging trends make me think that 2022 is ending a bit like it started, in a blur, or in a state of nervousness, since investors do not really know what to do, caught between the premise of a slowdown in inflation in the United States and the surprising resilience of its economy, two signals that make it difficult to predict the trajectory of the Federal Reserve's next rate hikes.

The remedy to all this would be to give them what they want, namely more visibility and some catalysts to become more confident. Even if the agenda is rather sparse between Christmas and New Year's Day, two major US statistics will be on the agenda on Thursday and Friday, with weekly unemployment figures and the Chicago PMI index respectively.

Let's end this column with the main news of the weekend. Inflation in Japan continued to rise in November, reaching 3.7% year-over-year, a new high since 1981. Several cold weather records were broken in the United States after the passage of the Elliott storm. Chinese hospitals are overcrowded after the relaxation of Covid restrictions. South Korea's tension with its neighbor is rising after North Korean drones intruded on its territory.

In today's session, there are no major indicators. Earlier today, Japan reported a 2.6% year-on-year increase in retail sales, but the momentum is starting to fade as economists were expecting 3.8% growth.

 

Economic highlights of the day:

The trade balance and wholesale inventories are today’s main indicators. All the macro agenda is here. 

A dollar is worth EUR 0.9411 and GBP 0.8391. The ounce of gold is still trading around 1800 dollars. Oil is gaining a bit of traction with North Sea Brent at USD 84.60 per barrel and US WTI light crude at USD 79.73. The yield on 10-year US debt is stabilizing at 3.75% over 10 years. Bitcoin is trading at 16800 dollars.

 

In corporate news:

* Tesla is considering a continuation in January of its program to cut production at its Shanghai, China, plant, an internal document seen by Reuters shows, sending the stock down 2% in premarket trading on Tuesday.

* SouthWest Airlines is down 3 percent in premarket trading on Tuesday after the airline canceled thousands of flights on Monday due to the winter storm in the United States. Of the more than 3,800 flights canceled by U.S. airlines, 2,800 were operated by Southwest Airlines.

* AMC Entertainment fell 9% in premarket trading after the company announced plans to raise $110 million in capital.

* News Corporation, Amazon - Bloomberg Group is not interested in acquiring Dow Jones, owned by News Corp, or the Washington Post, owned by Amazon founder Jeff Bezos, a spokesman for Michael Bloomberg's company said Sunday.

* Nio - The Wall Street-listed Chinese electric vehicle maker is down 1.5 percent in premarket trading Tuesday after lowering its fourth-quarter vehicle delivery forecast to a range of 38,500 to 39,500 from 43,000 to 48,000 previously.

 

Analyst recommendations:

  • Boohoo: Stifel downgrades its buy recommendation to hold and targets GBX 40.
  • Cardinal Health: Baptista Research LLP initiated coverage with a recommendation of hold. PT up 6.2% to $85.
  • Charter Communications: Wells Fargo upgrades from sell to neutral and raises its target to $370 from $340.
  • Diageo: Goldman Sachs is long and raises its target from GBX 4700 to 4800.
  • Dollar General:  Baptista Research LLP initiated coverage with a recommendation of hold. PT up 9.1% to $270.
  • NXP Semiconductors: CTBC Securities Investment Service Co. Ltd. initiated coverage with a recommendation of reduce. PT down 16% from last price to $132.15.
  • Royal Caribbean: Baptista Research LLP initiated coverage with a recommendation of hold. PT set to $55.
  • Take-Two: Baptista Research LLP initiated coverage with a recommendation of buy. PT set to $127.