On Wall Street, the previous day's losses were erased by a 1.7% to 1.8% rise in the three main indexes on Wednesday. This morning, all three indexes are in the green.

Investor sentiment improved on news of possible ceasefire talks in Ukraine. Ukraine and Russia are meeting again today to try to find a way out. But in the meantime, fighting is still raging and major Ukrainian cities are being bombed.

Retaliatory measures have continued to rain down on the Russian economy, which is suffering a backlash with sometimes brutal consequences, such as the end of European activities of Sberbank and VTB. Europeans are looking at ways to limit Russia's use of cryptocurrencies or the exclusion of Russian stocks from the FTSE Russell or MSCI emerging indices.

The other factor that helped reassure investors, and it is not clear why in the end, was the hearing of Fed boss Jerome Powell yesterday before US lawmakers. The central banker decided to unfold the scenario of a rate hike cycle to counter inflation, which is logically the Fed's primary concern. However, Powell acknowledged that the Russian-Ukrainian conflict is creating more uncertainty and that it may constitute a "game changer" for the economic outlook. Monetary policy bookmakers saw this as a sign that there will not be a 50-basis point rate hike on March 16, but rather a 25-basis point increase.

Powell even hinted that he preferred this minimum rate hike, but insisted that the Fed was open to a higher effort if inflationary signals remained too worrying. So, we are still talking about adapting to the circumstances, even though the CME's FedWatch tool shows that stakeholders are almost unanimous in anticipating a limited increase to 25 points on March 16. But as we have learned, or rediscovered, very recently, things can change very quickly and what seemed inconceivable the day before becomes the reality of the next day.

 

Economic highlights of the day:

There are several indicators in the United States: Challenger survey on layoffs, weekly unemployment registrations, labor costs, durable goods orders and ISM services.

The dollar is up 0.2% to 0.9017, while the ounce of gold consolidates at USD 1926. Oil continues to soar: Brent crude is at USD 11.86 and WTI at USD 109.16. US debt is paying 1.85% (vs. 1.74% the day before) on 10-years and the Bund is up to 0.02% (-0.08% the day before). Bitcoin is falling back to USD 43,400.

 

On markets:

* Tesla has received the final go-ahead from the authorities of the German state of Brandenburg, which is essential to launch production of its electric vehicle plant near Berlin, the business daily Handelsblatt reported on Thursday.

* Amazon and the Future Group, India's second-largest retailer, have agreed to enter into negotiations to resolve their commercial differences, which are at the heart of a battle for supremacy in the sector.

* Merck - A World Health Organization (WHO) expert panel on Wednesday recommended the use of molnupiravir, the COVID-19 antiviral treatment developed by the U.S. drugmaker, for people at high risk.

* American Eagle Outfitters - The fashion group said Wednesday it expects earnings to fall in the first half of this year due to rising transportation costs and reduced U.S. budget support. The stock is losing about 7% in pre-opening trading.

* Software company Oracle announced the suspension of all operations in Russia while rival SAP announced a pause in sales of services and products in the country following Moscow's invasion of Ukraine.

* Spotify has indefinitely closed its office in Russia in response to "Moscow's unprovoked attack on Ukraine," the Swedish music streaming platform announced Wednesday.

* Best Buy expects a decline in annual revenue after reporting lower-than-expected sales in the final three months of 2021, as the electronics retailer was hurt by product and staff shortages.

* Peloton - John Foley, co-founder and former CEO of Peloton Interactive, sold about $50 million worth of shares in the sports equipment maker to MSD Partners, a fund backed by Michael Dell, founder of Dell Computer Group.

 

Analyst recommendations:

  • Acushnet: Truist Securities adjusts price target to $48 from $56, maintains hold rating.
  • BAE Systems: DZ Bank downgrades to hold from buy. PT up 2.2% to 740 pence.
  • Ball: BMO Capital Markets upgrades to outperform from market perform. PT up 19% to $105.
  • Bristol-Myers Squibb: UBS adjusts price target to $70 from $61, maintains neutral rating.
  • Citigroup: Atlantic Equities downgrades to neutral from overweight. PT up 18% to $70.
  • Foot Locker: UBS adjusts price target to $32 from $48, maintains neutral rating.
  • Hikma: Morgan Stanley upgrades from Overweight to equal weight with a target of GBp 2300.
  • Intel: Morgan Stanley downgrades to underweight from equal-weight. PT down 3.8% to $47.
  • iQIYI: JPMorgan upgrades to overweight from neutral, raises price target to $8 from $5.
  • Neurocrine Bio: Piper Sandler downgrades to neutral from overweight. PT up 2.3% to $94.
  • Polymetal: Berenberg remains Buy with a target reduced from GBp 1000 to GBp 500.
  • Ross Stores: Morgan Stanley adjusts the price target to $137 from $140, maintains overweight rating.
  • Salesforce.com: Canaccord Genuity adjusts the price target to $260 from $315, maintains buy rating.
  • S&P Global: Morgan Stanley raises price target to $480 from $470, maintains overweight rating.
  • Target: Raymond James adjusts pt to $275 from $290, maintains strong buy rating.
  • Teradyne: Morgan Stanley downgrades to equal-weight from overweight. PT up 13% to $132.
  • ZAI Lab Limited: SVB Leerink adjusts the price target to $102 from $194, maintains outperform rating.