They give a 60% chance of this happening, according to the CME Fedwatch tool.  After several consecutive sessions in the red, European indices returned to the green today, and futures on the Nasdaq are even up 0.9% as I write these lines.

It’s true that overall, inflation is on a downward trend and that the economy is proving very resilient, perhaps a bit too much if we look at data published this week on retail, manufacturing and housing, all topping expectations.

The Fed's Beige Book report yesterday showed that the U.S. economic activity remains roughly the same between December and January. This comes after Fed official Governor Christopher Waller said recent data was "almost as good as it gets".

While a 60% chance of a rate cut in March seems pretty high, you have to remember that just 10 days ago, markets were giving an 80% chance of it happening. At the time, Jerome Powell was a little too enthusiastic about the future of monetary policy. Since then, he has toned down his stance along with his hawkish peers, and has been busy back-pedaling to cool the market's ardor. To this end, he has reminded the market that the battle against inflation is not won, that it would be stupid to fail so close to the goal for having started cutting rates too early, and that a lot of things are still wrong, such as this overly robust job market, this consumption that is holding up well and these prices that are starting to climb again.

Today, all eyes will again be on the comments of central bankers, who have even more say than usual because they have invaded the streets of Davos. We'll have Christine Lagarde for the ECB and Raphael Bostic for the Fed. There's also plenty of action on the corporate results front. In particular, figures from Taiwanese semiconductor giant TSMC, whose profits apparently fell but still exceeded expectations.

Today, another data was published showing the strength of the US economy. The number of Americans filing new claims for unemployment benefits fell last week to the lowest level since late 2022, highlighting the resilience of the US job market.

Initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 187,000 for the week ended Jan. 13, the Labor Department. Economists polled by Reuters had forecast 207,000 claims for the latest week.

We'll also be keeping an eye on the situation in the Middle East, where Iran and Pakistan are squabbling over missile strikes against so-called terrorist groups on their neighbor's soil. These tensions are compounded by the Israeli-Palestinian conflict and the turmoil created by Houthi attacks in the Red Sea.

Economic highlights of the day:

Industrial production in Japan, US building permits, housing starts, new jobless claims and the Philadelphia Fed's business outlook are on the agenda, along with US DOE crude inventories. 

The dollar is slightly up to EUR 0.9206 and GBP 0.7897. The ounce of gold retreats to USD 2011. Oil is holding up well, with North Sea Brent at USD 77.45 a barrel and US light crude WTI at USD 72.53. The yield on 10-year US debt remains at 4.09%. Bitcoin is trading at USD 42,400.

In corporate news:

  • Intel - The Advocate General of the Court of Justice of the European Union (CJEU) ruled on Thursday that the analysis of EU regulators, which led to the imposition of a €1.06 billion antitrust fine on the US group, was flawed.
  • Apple announced on Wednesday that it would be withdrawing a feature from some of its connected watches in the USA that analyzes the amount of oxygen in the blood, due to a patent dispute. Apple shares gained 1.8% in premarket trading after BofA raised its recommendation to "buy" from "neutral", anticipating the integration of artificial intelligence functions into the company's products this year.
  • Boeing - Indian airline Alaska Air announced an order for 150 Boeing 737 MAX jets on Thursday. The American aircraft manufacturer gained 2.1% before the opening.
  • Spirit Airlines fell a further 4.2% in pre-market trading, after a federal judge blocked its proposed $3.8 billion merger with competitor JetBlue, a move seen by the US Department of Justice as anti-competitive and harmful to consumers. Citi has also put Spirit Airlines up for sale.
  • Birkenstock advanced 3% in pre-market trading, with the German high-end shoe manufacturer anticipating better-than-expected sales for the year following better-than-expected fourth-quarter sales.
  • Humana - The health insurer plunged 11.7% in premarket trading after lowering its full-year adjusted profit forecast due in particular to higher medical costs in the fourth quarter.
  • Alphabet CEO Sundar Pichai warned employees of further job cuts this year, reported the trade publication The Verge on Wednesday.
  • Tesla announced on Thursday on the Chinese social network Wechat its intention to tour the country to present its Cybertruck pickup.
  • Meta Platforms - The group's former COO, Sheryl Sandberg, plans to step down from her position on the company's board at the end of her term in May, she said in a Facebook post on Wednesday.
  • Discover Financial Services reported a 62% drop in fourth-quarter profit on Wednesday, as the bank booked more provisions, sending its shares plunging 11.1% in premarket trading.
  • Citizens Financial - Group earnings fell 71% in the fourth quarter, hit by a $225 million charge to bail out the US deposit insurance fund, while the bank warned that net interest income could decline this year.
  • Kinder Morgan - The oil, gas and terminal operator posted lower-than-expected fourth-quarter earnings on Wednesday, as higher interest expense and weakness in the natural gas segment weighed on margins.
  • PG&E - The U.S. government has finalized a $1.1 billion aid package for PG&E's Diablo Canyon nuclear power plant in California, the Department of Energy said Wednesday.
  • Plug Power is down 15.5% in pre-market trading, following a 10% drop in Wednesday's session, as the hydrogen fuel cell company seeks to raise $1 billion in equity.

Analyst recommendations:

  • Adobe: BNP Paribas Exane downgrades to underperform from neutral with a price target reduced from USD 570 to USD 499.
  • Analog Devices: Wolfe Research upgrades to outperform from peerperform with a target price of USD 225.
  • Advanced Micro Devices: Cowen maintains its outperform rating and raises the target price from USD 130 to USD 185.
  • Arista Networks: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 232 to USD 287.
  • Bae Systems: BNP Paribas Exane downgrades to underperform from neutral with a target price raised from GBX 1060 to GBX 1128.
  • Capita: Citi drops coverage on the stock.
  • Cloudflare: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 70 to USD 94.
  • Crowdstrike Holdings: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 245 to USD 318.
  • Equifax: RBC Capital maintains its sector perform recommendation and raises the target price from USD 205 to USD 270.
  • Estee Lauder: JP Morgan maintains its overweight rating and raises the target price from USD 118 to USD 150.
  • Fair Isaac: RBC Capital maintains its sector perform recommendation and raises the target price from USD 875 to USD 1350.
  • Grab Holdings: JP Morgan upgrades to overweight from neutral with a price target raised from USD 3.60 to USD 3.80.
  • Microchip Technology: Wolfe Research upgrades to outperform from peerperform with a target price of USD 105.
  • Microsoft: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from USD 350 to USD 471.
  • Nvidia: Tigress Financial Partners maintains its buy recommendation and raises the target price from USD 560 to USD 790.
  • Nxp Semiconductors: Wolfe Research upgrades to outperform from peerperform with a target price of USD 255.
  • Oxford Nanopore Technologies: Berenberg maintains its buy recommendation and reduces the target price from 529 to GBX 381.
  • Palo Alto Networks: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 315 to USD 390.
  • Rentokil Initial: Societe Generale maintains its sell recommendation and reduces the target price from GBX 450 to GBX 350.
  • Sage Group: BNP Paribas Exane maintains a neutral recommendation with a price target raised from GBX 940 to GBX 1130.
  • Charles Schwab: Keefe Bruyette & Woods downgrades to market perform from outperform with a price target reduced from USD 75 to USD 70.
  • Servicenow: BNP Paribas Exane maintains a neutral recommendation with a price target raised from USD 545 to USD 673.
  • Shopify: Barclays maintains its equalweight recommendation and raises the target price from USD 53 to USD 70. BNP Paribas Exane downgrades to underperform from neutral with a price target reduced from USD 73 to USD 71.
  • Transunion: RBC Capital maintains its outperform rating and raises the target price from USD 70 to USD 85.
  • Us Bancorp: D.A. Davidson maintains its neutral recommendation with a price target raised from USD 36 to USD 45.
  • Zoom Video Communications: BNP Paribas Exane downgrades to underperform from neutral with a price target reduced from USD 72 to USD 60.