Let me start with Halloween. On the market, there's a "Halloween strategy", the idea is to invest in what is statistically the best part of the year, i.e. from the beginning of November to the end of April, and move on to the half-year from the beginning of May to the end of October. We can argue about whether or not to stay invested, and about many other things, but the figures show that in the United States over a long period (1970 to 2017), November/April generated 6.9% average upside and May/October 1.5%. The fact that May, September and October are statistically the year's biggest losers is of course no coincidence. In fact, according to academic research, most markets have a semi-annual seasonal effect of this kind. So if you want to start investing, the oracles (and the stats) recommend you do it now rather than in six months' time.

But let’s go back to yesterday's US session, which ended with all three major indices up by more than 1%, with the podium dominated by the "old" Dow Jones. However, this apparent homogeneity conceals a number of singular trajectories. The best performers, for example, were consumer goods and financials, i.e. fairly traditional sectors. The Nasdaq had to rely on its heavyweights Apple, Microsoft, Amazon and Alphabet to counter the stall of Tesla and the semiconductor sector following ON Semiconductor's warning (-22%). Investors see the resilience of companies' quarterly results as a branch to hang on to in an otherwise tense environment. And then there's the Crying Wolf syndrome: since economists have been warning for two years that a recession is likely to occur within two months, and it never does, the market is beginning to believe that the US economy is invincible.

Earnings will continue to dominate today's session and the next, at least until the Fed announces its monetary policy decision tomorrow. But it was the Bank of Japan that was the first of this week's central banks to make its move, a few hours ago. As expected, Japanese rates remained unchanged. But contrary to what most observers thought, the BoJ maintained a very flexible stance, contenting itself with cosmetic adjustments in its phrasing. As a result, the yen lost ground. However, it wasn't the BoJ that was the talk of the night, but rather China's economic indicators. The PMI indicators, which measure purchasing managers' risk appetite, disappointed once again after a slight upturn: the manufacturing PMI fell back into contraction territory to 49.5 points, while the services PMI dropped from 51.7 to 50.6 points. Both figures are below expectations. Economist Robert Carnell (ING) said: "This comes as a slight shock given that recent activity data had strengthened, and suggests that the economy is still struggling.” Poor figures, then, which reinforce the scenario of China's inability to get its economy moving again.

In the United States, three major announcements stood out. Firstly, the UAW union put an end to a six-week strike in the automotive industry after reaching a global agreement with Stellantis, Ford and General Motors. This is an important industrial achievement, which should help to improve inflation sentiment (low vehicle supply relative to demand helps to drive up new and used car prices, a non-negligible component of inflation calculations). Secondly, the US Treasury has indicated that it expects to borrow slightly less than planned in Q4, thanks to higher-than-anticipated receipts. The announcement may help to ease the pressure on rates (although not too much at the time of writing) ahead of Wednesday's announcement by the same Treasury of details of its forthcoming bond issues. Finally, on a lighter note, Apple yesterday unveiled three powerful new chips and its new MacBook. This was enough to draw investors' attention to innovations before a publication that is a little riskier than usual. Apple presents its Q3 results on Thursday, in a context marked by a redefinition of the iPhone supply chain and a campaign of denigration of the smartphone by Beijing.

Economic highlights of the day:

EU inflation data, FHFA house prices, MNI Chicago PMI and Conference Board confidence index will take over. The full agenda is here. 

The dollar is slightly up to EUR 0.9431 and GBP0.8238. The ounce of gold is at the symbolic USD 2,000 mark. Oil remains under pressure, with North Sea Brent at USD 86.40 a barrel and WTI light crude at USD 82.31. The yield on 10-year US debt stands at 4.87%. Bitcoin is trading at around USD 34,300.

In corporate news:

  • Caterpillar fell by almost 5% in pre-market trading due to a rise in dealer inventories and a drop in order backlog, indicating a slowdown in demand for equipment. However, the Group reported a rise in third-quarter earnings, driven by major infrastructure investments in key markets.
  • Pfizer reported its first quarterly loss since 2019 on Tuesday, as the pharmaceutical company recorded charges largely linked to its COVID-19 products, such as the antiviral treatment Paxlovid and the Comirnaty vaccine developed in partnership with BioNTech.
  • Amgen, which this month acquired Horizon Therapeutics for $27.8 billion, gained 2.6% in pre-market trading after reporting better-than-expected quarterly earnings.
  • Pinterest jumped 15.9% in premarket trading after reporting better-than-expected third-quarter results on Monday, amid a recovery in the advertising market.
  • Western Digital fell 6% in after-hours trading after the company announced its intention to raise $1.3 billion in capital via convertible bonds.
  • Microsoft and Siemens announced on Tuesday that they were working together on a project to use artificial intelligence (AI) to increase productivity and human-machine collaboration.
  • VF Corp - The owner of Vans shoes fell 6.1% in premarket trading after dropping its annual sales and profit forecasts, citing a difficult wholesale market environment in the US and fears of poor demand in the second half.
  • Marathon Petroleum gains 2.1% in pre-market trading after reporting better-than-expected third-quarter earnings.

Analyst recommendations:

  • Arista networks: Morgan Stanley upgrades to overweight from equal weight with a price target raised from USD 185 to USD 220.
  • Avalonbay commun: Piper Sandler & Co upgrades to overweight from neutral with a price target reduced from USD 197 to USD 194.
  • Centene corp: Bernstein maintains its outperform rating and raises the target price from USD 90 to USD 95.
  • Chevron corp: DZ Bank AG Research maintains its buy recommendation and reduces the target price from USD 187 to USD 170.
  • Chewy: Morgan Stanley upgrades to overweight from equal weight with a price target reduced from USD 31 to USD 28.
  • Epam systems: HSBC maintains its hold recommendation and reduces the target price from USD 255 to USD 245.
  • First quantum: Scotiabank downgrades to sector perform from sector outperform with a price target reduced from CAD 38 to CAD 23.
  • Hartford: Raymond James maintains its outperform rating with a target price raised from USD 85 to USD 90.
  • Hubspot: Citi maintains its buy recommendation with a price target reduced from USD 695 to USD 658.
  • Intercontinental: JP Morgan downgrades to underweight from neutral with a price target reduced from GBP 63 to GBP 54.
  • Kenvue inc: HSBC maintains its hold recommendation and reduces the target price from USD 23 to USD 21.
  • L3harris technol: Baird upgrades to outperform from neutral with a price target raised from USD 198 to USD 216.
  • Linde plc: DZ Bank AG Research maintains its buy recommendation and reduces the target price from USD 439 to USD 428.
  • Mcdonald's: DZ Bank AG Research upgrades to buy from hold with a price target reduced from USD 315 to USD 300.
  • Meta platforms: Societe Generale maintains its sell recommendation and raises the target price from USD 100 to USD 175.
  • Mid-america apar: Piper Sandler & Co downgrades to neutral from overweight with a price target reduced from USD 182 to USD 130.
  • On semiconductor: Baird downgrades to neutral from outperform with a price target reduced from USD 120 to USD 60.
  • Revvity: Jefferies maintains its hold recommendation with a price target reduced from USD 110 to USD 87.
  • T. Rowe price: Citi downgrades to neutral from sell with a price target reduced from USD 100 to USD 95.
  • Transunion: Redburn Atlantic maintains its buy recommendation and reduces the target price from USD 105 to USD 53.
  • Udr inc: Piper Sandler & Co downgrades to underweight from neutral with a price target reduced from USD 46 to USD 30.
  • Willis towers wa: Raymond James maintains its outperform rating and raises the target price from USD 250 to USD 255.