While things were not looking good for the traditional year-end rally yesterday, new data published in the United States changed the mood. The December consumer confidence index, compiled by the Conference Board, rose to 108.3 points, compared with 101.4 points in November and 101 points anticipated by economists. Despite inflation, various tensions and all. The authors of the survey explained that the slowdown in inflation has left its mark on people's minds, especially in its visible part such as the decline in gasoline prices. Americans are more confident about the future and the job market, even if they are still very cautious about making big purchases, such as real estate or major appliances.

 

I had pointed out yesterday that investors seem to be out of the "bad news? Good news!" syndrome, as the economic slowdown has returned to the top of the fear pile, ahead of the Fed's rate policy (although the two are intimately linked, of course). As a result, this excellent resilience of the consumer, and in turn of future consumption, is welcomed. At the same time, quarterly results from Nike, Fedex and Cintas (a sort of American Elis) also helped reassure on economic trends. In the end, the S&P500 and the Nasdaq 100 gained about 1.5%.

The headlines in the business press were dominated by the Ukrainian President's speech to the US Congress and the aftermath of the FTX bankruptcy. Sam Bankman-Fried's two main partners, Caroline Ellison and Gary Wang, pleaded guilty in the US after being charged with fraud. Their boss has officially accepted his extradition from the Bahamas to the United States. The release of the tax data on Donald Trump did not yield anything very crisp, except for the fact that the former president accumulated a lot of losses between 2015 and 2020. The non-partisan committee on taxation did not offer an opinion on whether the businessman should have paid more or less taxes over the period. I also noted this report from the UK Chamber of Commerce which gives a damning assessment of the difficulties British businesses have in trading with the rest of Europe and calls on the Sunak government to act vigorously.

On the market front, with the exception of the U.S. consumer data detailed above, China is the place to be today. Technology and real estate stocks took off in Hong Kong, Shanghai and Shenzhen after yet another statement of intent from the authorities. Several institutions reiterated their commitment to fostering growth and stability in the country. In any case, it's working: the Hang Seng Tech, the most prominent technology index in the region, was up more than 4% this morning.

However, futures on Wall Street indicate that the rebound initiated yesterday is coming to an end. The number of Americans filing new claims for unemployment benefits grew less than expected last week, indicating that the labor market is still tight. Initial claims for state unemployment benefits gained 2,000 to 216,000 for the week ended Dec. 17, vs expectations of 222,000 in a Reuters poll.

Meanwhile, US economic growth in the third quarter was firmer than previously estimated, as GDP gained 3.2% on an annual basis during the period, higher than the 2.9% initially reported, the Commerce Department said.

 

Economic highlights of the day:

On the agenda for the day in the United States, the Chicago Fed's activity index, weekly jobless claims and the latest estimate of U.S. GDP for Q3. All the macro agenda is here.

The dollar is worth EUR 0.9436 and GBP 0.8327. The gold ounce is down to 1801 dollars. Oil has regained some height, with North Sea Brent at USD 83.12 per barrel and US light crude WTI at USD 78.71. The yield on 10-year U.S. debt is down to 3.66%. Bitcoin is flirting with USD 16,850.

 

In corporate news:

* Tesla is offering discounts of $7,500 on its Model 3 and Model Y electric vehicles delivered in the United States this month, according to the carmaker's website, as the group faces a slowdown in demand.

* Microsoft - The French Commission Nationale de l'Informatique et des Libertés (CNIL) announced Thursday that it has decided to fine the U.S. group 60 million euros for "not having put in place a mechanism to refuse cookies as easily as to accept them.

* AirBnb - The European Union's Court of Justice ruled Thursday that the U.S. hosting services group, which is challenging a 2017 law in Italy on the real estate market, must provide local tax authorities with requested information on its rental contracts and collect the expected tax on its customers' rental income.

* Alphabet - Google's parent company announced Wednesday night that it had approved a new stock distribution to CEO Sundar Pichai, making more of his compensation contingent on the group's performance.

* Amazon - The Court of Justice of the European Union (CJEU) ruled Thursday in a preliminary ruling that the U.S. online retailer could be held liable for ads for counterfeit Christian Louboutin shoes sold on its platform by third parties.

* Under Armour is down 2% in after-hours trading after announcing the appointment of Stephanie Linnartz as CEO to replace Patrik Frisk, who stepped down from the group in June.

 

Analyst recommendations:

Chemring: Berenberg remains Buy with a price target reduced from GBp 420 to GBp 380.

Costco: Tigress Financial lowers Price Target on Costco Wholesale to $635 from $678, Maintains Buy rating

Jefferies: Keefe, Bruyette & Woods downgrades to market perform from outperform. PT up 3.7% to $37.

LondonMetric: Citigroup upgrades from buy to neutral with a target of GBp 166.

Parsons: Baird initiated coverage of Parsons Corp. with a recommendation of neutral. PT up 7.4% to $50.

Target: Stifel adjusts Price Target to $175 from $195, Maintains Hold rating

The Gym Group: Jefferies remains Buy with a price target reduced from GBp 290 to GBp 220.