Monday's US rally proved modest, however, and the three major indices closed not far from their lows of the day. Investors were no more concerned that the probability of a Fed rate cut in March had fallen below 50%. This slight disillusionment has been replaced by the feeling that the pace of rate cuts ultimately matters little, as long as the economy continues to show signs of strength. In the words of a financial professional I read this morning, the market sees the US economy as invincible. It must be the Marvel superhero syndrome, mixed with artificial intelligence. AI is everywhere, reinforcing the bullish tide. No one seems to know why or where it's going, but many can smell the money.

While Western stock markets are no longer falling, Beijing is buying massive amounts of shares to boost its failing markets. I wonder how long it will take for investors to realize that they'd rather see vigorous economic action upstream than shaky scaffolding downstream.

Apparently, Beijing is going to inject more public funds into the capital market, Premier Li Qiang has announced. Bloomberg understands that 2,000 billion yuan (around $278.5 billion) could be raised from the offshore accounts of Chinese state-owned enterprises, to create a stabilization fund. It may sound like a wobbly scheme, but the authorities don't really know what to do to stop the stock market hemorrhaging. The Hang Seng appreciated this morning, rebounding by 3.3%. The CSI300 is more cautious, although it is up 0.5%. After all, it's all about siphoning off corporate coffers to buy shares.

In Japan, the central bank's decision was, as is often the case, without any surprises. The BOJ kept its monetary policy unchanged and was tight-lipped about its future intentions. The impact was relatively neutral on the Japanese market, which still enjoys a good reputation.

Today's session will be marked by the first big salvo of corporate results of the week on both sides of the Atlantic. Ericsson, Logitech and Swatch got the ball rolling this morning in Europe. They are joined by some heavyweights in the USA: Johnson & Johnson, Procter & Gamble Company, Netflix, Verizon Communications, Texas Instruments and General Electric among others.

In Asia-Pacific this morning, Tokyo ended very slightly down by 0.08%. India was also down before the end of the session (-0.4%). Taiwan, South Korea and Australia, on the other hand, were up by around 0.5%. After yesterday's heavy losses, China rallied by 0.5% for the CSI300 and 3.3% for the Hang Seng, following news of support measures. Leading indicators are mixed in Europe today. Futures on Wall Street are slightly up.

Economic highlights of the day:

In addition to the Bank of Japan, we have the Richmond Fed manufacturing index on the agenda today. 

The dollar is worth EUR 0.9197 and GBP 0.7866. The ounce of gold is stable at USD 2027. Oil struggles for direction with North Sea Brent at USD 78.56 a barrel and US light crude WTI at USD 73.72. The yield on 10-year US debt falls to 4.09%. Bitcoin falls back to USD 38,920.

In corporate news:

  • United Airlines presented an optimistic outlook for the full year on Monday, despite the announcement of a larger-than-expected loss for the first quarter of 2024, linked to the Boeing 737 MAX 9 grounding. The stock gained 5.9% before the opening, dragging other airline groups up with it.
  • 3M Company reported a lower-than-expected annual profit on Tuesday, causing the stock to fall by 5.7% in pre-market trading.
  • Johnson & Johnson reported slightly better-than-expected fourth-quarter earnings and sales on Tuesday, buoyed by strong demand for its flagship psoriasis treatment.
  • Invesco drops 3.4 in premarket trading after fourth-quarter results.
  • General Electric was down 4% in pre-market trading after reporting a lower-than-expected profit forecast for the current quarter on Tuesday.
  • Procter & Gamble sharply lowered its full-year profit forecast on Tuesday, as the positive effect of price rises faded and the group had to write down its Gillette business.
  • Halliburton reported a better-than-expected fourth-quarter profit, as strong offshore and overseas drilling activity boosted demand for oilfield services and equipment.
  • Verizon gained 5% in pre-market trading, as the group announced that it expected full-year earnings to beat estimates on Tuesday. The operator expects to report its biggest quarterly increase in subscribers in almost two years.
  • Lockheed Martin on Tuesday forecast lower-than-expected earnings for 2024, as the group's aerospace segment faces supply chain disruptions.
  • RTX gains 3.8% in pre-market trading after reporting a 10% rise in fourth-quarter sales, exceeding the expectations of analysts surveyed by LSEG.
  • The D.R. Horton loses 4.9% in premarket trading after reporting first-quarter results.
  • Zions Bancorporation announced Monday that it expects net interest income to decline slightly in 2024, after posting a 58% drop in fourth-quarter earnings, as banks spend more to attract and retain customer deposits.
  • Netflix announced on Tuesday that Scott Stuber, the group's head of films, would be leaving in March to launch his own media company.

Analyst recommendations:

  • Albemarle Corporation: Loop Capital Markets maintains its buy recommendation and reduces the target price from USD 250 to USD 144.
  • Coinbase Global: JP Morgan downgrades to underweight from neutral with a target price of USD 80.
  • Enphase Energy: Truist Securities upgrades to buy from hold with a price target raised from USD 85 to USD 145.
  • International DI: HSBC upgrades to buy from hold with a price target raised from GBP 2.80 to GBP 3.14.
  • Itm Power: JP Morgan maintains its overweight recommendation and reduces the target price from 1.80 to GBP 1.30.
  • Palo Alto Networks: DZ Bank Research maintains its buy recommendation and raises the target price from USD 295 to USD 378.
  • Sage Group: AlphaValue/Baader Europe downgrades to reduce from sell with a price target raised from GBX 1057 to GBX 1195.
  • Servicenow: DZ Bank Research maintains its buy recommendation and raises the target price from USD 650 to USD 810.
  • Victrex: Berenberg downgrades to hold from buy with a target price reduced from GBX 2090 to GBX 1680.