The publication of the minutes of the latest US central bank meeting was just as easily digested: they nevertheless showed a rather cautious approach to the evolution of rates, including the risk of a hike. But investors don’t care, since they think they’ve read into the Fed's game that there will be no further tightening. The Nasdaq 100 gained 0.7% and the S&P500 0.4% yesterday.

There’s a further test of this brand-new theory today, with the publication of September's US inflation figures. Economists were expecting monthly inflation of 0.3%, for both normal and core CPI. But the normal CPI was slightly above at 0.4%, while core was in line with expectations. Annual inflation remains at 3.7%, while 3.6% was expected. This is still way above the Fed’s target of 2%. Will this slight increase spook investors and take Wall Street in the red? Or will core inflation in line with expectations reinforce investors' renewed appetite for risk? We’ll find out later today. After the release of the data, futures dipped in the red but then stabilized slightly above zero.

In Europe yesterday, the French index CAC40 was the ugly duckling, down 0.44% at the bell, triggered by the 6.5% fall of fallen star, the luxury giant LVMH. Let's not bury Bernard Arnault's company too quickly, but it has to be said that the market's fears were justified: the days of 20%+ growth are over, at least for a while. The market had already been having doubts for some weeks, as evidenced by the stock's contraction over the summer. As is so often the case, self-fulfilling prophecy played second fiddle to the stock price. Meanwhile, Danish laboratory Novo Nordisk jumped 5% on the back of favorable data in the field of kidney disease. Novo is almost becoming a problem for the Danish economy as a whole: GDP for the first half of 2023 rose by 1.7%, but would have been slightly negative without the giant lab behind popular treatments against obesity. Novo Nordisk's capitalization, in addition to having overtaken that of LVMH to take first place in Europe, is also now greater than Denmark's annual GDP. Given the worldwide success of the anti-diabetic Ozempic and the anti-obesity Wegovy, Danish Novo-dependence is unlikely to improve in the short term.

In other news, Israel is still assessing its response to the bloody Hamas attacks. In the same field, oil took a nosedive yesterday after the New York Times revealed that Iran may have been taken by surprise by the Hamas offensive. A few hours earlier, all the media were pointing the finger at Teheran for having masterminded the attack. Elsewhere, the Kremlin reinstated capital controls to support the rouble, whose slide is penalizing Russian finances. In China, the subtle signs of increased state intervention in the economy continue. Sovereign wealth fund Central Huijin Investment has increased its stake in the country's five largest banks. This is a first since 2015, when it had already done so to halt the hemorrhaging of Chinese markets. Positive view: it didn't work out too badly in 2015. Negative view: China's central government doesn't seem to have many ideas.

Economic highlights of the day:

UK monthly GDP, US CPI, new jobless claims and DOE crude oil inventories. The full agenda is here.

The dollar is up 0.4% against the euro to EUR 0.9450 and is flat against the pound to GBP 0.8155. The ounce of gold rises a notch to USD 1879. Oil rises, with Brent North Sea crude at USD 87.34 a barrel and WTI US light crude at USD 84.77. The yield on 10-year US debt fell to 4.57%. Bitcoin trades at USD 26,760.

Analyst recommendations:

  • Accenture plc-a: Baptista Research downgrades to underperform from hold with a price target reduced from USD 361 to USD 300.70.
  • Alimentation couche: BMO Capital Markets maintains its outperform rating and raises the target price from CAD 78 to CAD 81.
  • Boohoo group plc: Stifel downgrades to sell from hold and reduces the target price from GBX 40 to GBX 25.
  • Carrier glob: Wolfe Research downgrades to underperform from peerperform with a target price of USD 56.
  • Chevron corp: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from USD 180 to USD 190.
  • The Clorox: Bernstein downgrades to market perform from underperform with a target price of USD 120.
  • Coinbase: Goldman Sachs maintains its sell recommendation with a price target raised from USD 51 to USD 55.
  • Copart: Morningstar downgrades to hold from sell with a price target raised from USD 39 to USD 42.
  • Entain plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 15.20 to GBP 14.60.
  • Exxon mobil corp: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from USD 115 to USD 110.
  • Fedex corp: Baptista Research maintains its hold recommendation with a price target reduced from USD 289 to USD 279.
  • First quantum: Morgan Stanley upgrades to equalwt/in-line from underwt/in-line with a price target reduced from CAD 32 to CAD 31.
  • First solar: Barclays upgrades to overweight from equalweight with a price target reduced from USD 230 to USD 224.
  • Firstgroup plc: Peel Hunt maintains its buy recommendation with a price target raised from GBX 185 to GBX 200.
  • Fiserv: Goldman Sachs maintains its neutral recommendation with a price target reduced from USD 127 to USD 126.
  • Global payments: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 145 to USD 143.
  • Johnson matthey: Berenberg downgrades to hold from buy with a price target reduced from GBX 2200 to GBX 1650.
  • Kimberly-clark: Bernstein upgrades to market perform from underperform with a price target reduced from USD 125 to USD 118.
  • Paycom software: BMO Capital Markets maintains its market perform recommendation with a price target reduced from USD 356 to USD 320.
  • Pepsico : Morningstar maintains its buy recommendation with a price target raised from USD 176 to USD 180.
  • Tfi internationa: Wells Fargo maintains its overweight rating and raises the target price from USD 150 to USD 160.
  • Travis perkins: Liberum maintains its hold recommendation with a price target reduced from GBX 900 to GBX 777.
  • Visa: Goldman Sachs maintains its buy recommendation with a price target raised from USD 286 to USD 289.
  • Welltower inc: JP Morgan downgrades to neutral from overweight with a target price of USD 90.
  • Workspace group: Numis maintains its buy recommendation and raises the target price from GBX 630 to GBX 650.