However, overnight, Snap's stock tumbled more than 30% after the CEO said quarterly growth and sales guidance would not be met, due to rising inflation, supply chain shortages, and the conflict in Ukraine.

The results of a survey of Japanese businesses also dampened the mood, with manufacturing activity expanding at its slowest pace in three months in May.

Wall Street's main indexes opened much lower today as a result, with the Nasdaq 100 down by 3.5%, the S1P 500 by 2.1%, and the Dow Jones by 1.2% this morning.

The financial markets are still stuck in their cyclothymic phase, i.e. alternating periods of upturns and downturns with more or less serious triggers. Since the background of the story is rather gloomy, the bearish passages dominate.

It all started well on Monday, when two converging phenomena allowed US indexes to recover between 1.5 and 2%. First, JPMorgan Chase raising its guidance during an investor day. The bank explained that it would benefit from net interest income higher than expected, while maintaining a level of profitability of its capital very solid. The stock ended up 6.2%, dragging in its wake the entire banking sector, especially Goldman Sachs, the second largest weighting in the Dow Jones.

Technology stocks, including Apple (+4%), were not left behind. Together with Microsoft (+2.3%), they allowed the Nasdaq 100 to gain 1.68%. The technology index has therefore grown less than the Dow Jones. This is mainly because investors are still shunning some of the stocks considered too risky: why buy Roku when you can have Apple at less than 25 times earnings?

But after the close on Wall Street, investors got stunned by Snap's announcement. Joe Biden's statement that the US would come to defend Taiwan militarily in case of an attack did not help sentiment. Several media did not hesitate to speak of a gaffe by the president. The White House later backtracked by pointing out that Biden was talking about support of the type given to Ukraine.

Meanwhile, the Chinese Communist Party has to face an economic situation complicated by lockdowns. A series of measures were announced yesterday, including tax credits, payment facilities to provident institutions, and investment plans. Investors continue to wonder why Beijing is content with small announcements instead of a big stimulus package, but they know how to make do with little at the moment.


Economic highlights of the day:

The PMI indices - which measure the optimism of purchasing managers - return for the May batch for the major economies. In the US, there is also be the Richmond Fed index and the new housing figures. Jerome Powell and Christine Lagarde are scheduled to give speeches at two separate events.

The dollar continues to slide to EUR 0.9322. Gold is trading at USD 1862 an ounce. Oil remains firm, with North Sea Brent at USD 113.71 per barrel and US WTI light crude at USD 110.51. The yield on 10-year U.S. debt stands at 2.83%, almost unchanged. Bitcoin is trading around USD 28891.


On markets:

* Snap fell by about 30% in pre-market trading after issuing a warning on its quarterly results the day before due to the "faster and sharper than expected deterioration of the macroeconomic environment".

* The Boeing Co, General Electric - Aircraft engine maker CFM International, a joint venture of General Electric and Safran and a supplier to Boeing, is facing production delays of six to eight weeks due to problems in its supply chain and a recent labor dispute in France, three sources close to the matter said. In pre-market, Boeing lost 1.4% and GE almost 1%.

* AirBnb announced on Tuesday that it would end all its services in China on July 30, without giving details on what motivated this decision, adding to the long list of Western online platforms that have left the Chinese market. The stock was down 2.3% in pre-market trading.

* Tesla - Daiwa Capital lowered its price target to $800 from $1,150 and cut its 2022 delivery forecast to 1.2 million vehicles from 1.4 million units. The automaker was down 2.7% in pre-market trading.

* Ralph Lauren announced on Tuesday that it expects full-year sales to be higher than expected thanks to solid demand in Europe and the United States. The stock was up 1% in pre-market trading.

* Abercrombie & Fitch lowered its annual sales target, citing the impact of inflation on demand. Its stock was down 20% in premarket trading.

* Moderna announced that it is testing potential vaccines against monkeypox in pre-clinical trials as the disease, for which no specific treatment or vaccine exists, spreads outside Africa.

* Spirit Airlines' chief executive said Monday that the airline's shareholders were unlikely to oppose the proposed merger with Frontier after the hostile takeover bid by JetBlue.

* Zoom Video Communications raised its annual adjusted profit forecast after its first-quarter results rose sharply, buoyed by demand for its video conferencing services. The stock was up 6% in premarket trading.

* Best Buy gained 8% in premarket trading after reporting better-than-expected first-quarter revenue and despite lowering its full-year sales and earnings guidance due to inflation.

* Uber Technologies announced Tuesday that it has signed an agreement to integrate its transportation application with Italy's leading cab operator, IT Taxi.

* Pfizer announced that nearly one-third of ulcerative colitis patients who received its experimental drug etrasimod in a clinical trial were in remission after one year of treatment.


Analyst recommendations:

  • Charles River Laboratories: Guggenheim initiates coverage with neutral rating.
  • Chubb: Citigroup starts chubb at neutral with $209 price target.
  • DTE Energy: Credit Suisse upgrades to outperform from neutral. PT up 7.4% to $140.
  • Eaton Corp: Barclays downgrades to underweight from equal-weight. PT down 12% to $120.
  • Equitable Holdings: Citigroup analyst starts equitable holdings at buy with $41 price target.
  • Glencore: Julius Bär remains a Hold with a price target raised from GBp 480 to GBp 500.
  • Hartford Financial Services: Citigroup analyst starts at buy with $81 price target.
  • Icon: Guggenheim Securities initiated coverage of with a recommendation of buy. PT up 31% to $285.
  • IQVIA Holdings: Guggenheim starts at buy with $244 price target.
  • Kingfisher: Societe Generale downgrades from sell to hold with a target of GBP 271.
  • Metlife: Citigroup starts at buy with $77 price target.
  • Moonpig: Jefferies remains Buy with a price target raised from GBp 410 to GBp 430.
  • Prudential Financial: Citigroup analyst starts prudential financial at neutral with $100 price target.
  • Phillip Securities initiated coverage with a recommendation of buy. PT jumps 61% to $258.
  • Snowflake: Rosenblatt Securities upgrades to buy from neutral. PT jumps 84% to $255.
  • The Allstate Corp: Citi reinstated coverage with a recommendation of buy. PT rises 27% to $159.
  • Vesuvius: Berenberg remains Buy with a price target reduced from GBp 600 to GBp 480.