In October 2023, overall inflation was expected to reach 3.3% year-on-year in the US, according to economists, and it came in at 3.2%. That's much better than September's 3.7%, thanks to the drop in gasoline prices. Core inflation, which excludes the most volatile items from the calculation, was also lower than expected, at 4.0% instead of 4.1% expected On a monthly basis, consumer prices remained unchanged, while core CPI rose 0.2%, instead of 0.3% expected.

Inflation has once again become a major determinant of monetary policy. This data coming below expectations support investors in their convictions that the Fed will not raise rates again during the cycle, and should even start to lower them around mid-2024.

After the release of the figures, futures on all three Wall Street indexes shoot up, with the Nasdaq 100 up 1.6%. The yields on the US 2 to 10-year bonds fell by at least 15 points. The dollar also plunged against other currencies.

Yesterday was a waiting game for the US equity markets. The Nasdaq gave up 0.3% after soaring by over 2% in the previous session. The Dow Jones, which has been struggling for some time now, managed to close in the green, helped by Boeing's orders at the Dubai Airshow and the probable return of the B737MAX to China. In Europe, indices closed in the green.

The rest of the economic and political news is dominated by tomorrow's meeting between Joe Biden and Xi Jinping. The press expects the two leaders to sign an agreement enabling Beijing to attack the chemical companies that promote the production of Fentanyl, the synthetic opioid that is wreaking havoc in the United States. In the UK, the political class is abuzz with rumors about the future of Rishi Sunak, decried in his camp for having brought former Prime Minister David Cameron back into office against all odds. His appointment as head of British diplomacy as part of a cabinet reshuffle stunned many.

Economic highlights of the day:

British unemployment figures, the German ZEW financial confidence index, a second estimate of Q3 European GDP and October US inflation are on the agenda.

The dollar is down to EUR 0.9268 and GBP 0.8078. The ounce of gold trades at USD 1952. Oil is stable, with North Sea Brent at USD 82.31 a barrel and US light crude WTI at USD 78.06. The yield on 10-year US debt falls slightly to 4.52%. Bitcoin is trading at around USD 36,500.

In corporate news:

  • The Home Depot gained 0.9% in pre-market trading, as the DIY specialist reported better-than-expected third-quarter earnings and a smaller-than-expected decline in like-for-like sales.
  • Microsoft and Google, have announced that they have no intention of contesting the European Union's new Digital Markets Act (DMA), which will require companies considered gatekeepers to facilitate interoperability between competing services.
  • Alphabet - The US group's main subsidiary, Google, was fined 15 million rubles in Russia on Tuesday for repeatedly refusing to store Russian user data on servers located in the country, a Moscow court announced.
  • Snap jumps 4.2% in pre-market trading after news that AMAZON will allow users of the social network in the US to buy certain products from the online shopping platform directly from the Snapchat app.
  • Tesla plans to double the number of components it imports from India, Indian Commerce Minister Piyush Goyal said Tuesday in a message posted on X, formerly Twitter.
  • Fisker - The electric vehicle startup cut its production forecast for this year and reported difficulties in increasing deliveries, as well as shortcomings in its internal controls, sending the stock down 13.4% in pre-market trading.
  • Rivian Automotive plans to raise nearly $15 billion via a debt issue to produce electric vehicles in Georgia, the automaker announced on Monday.
  • Aercap - The aeronautical equipment manufacturer is down 3.3% in after-hours trading after announcing that General Electric intends to withdraw from its capital.
  • Beauty Health plunges 53.3% in pre-market trading after lowering its annual sales forecast and announcing the departure of its CEO, Andrew Stanleick, effective November 19.
  • Tencent music Entertainment advances by 0.3% in pre-market trading, as the music streaming group reports better-than-expected third-quarter sales.
  • Digital World Acquisition - A stock market report on the investment vehicle (SPAC) that plans to merge with Trump Media & Technology Group's (TMTG) shows that former US President Donald Trump's social network, Truth Social, has lost $73 million since its launch in early 2022.

Analyst recommendations:

  • Albemarle Corporation: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 155 to USD 140.
  • Amazon.com, Inc.: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 165 to USD 180.
  • Associated British Foods Plc: RBC Capital maintains its outperform rating and raises the target price from GBX 2500 to GBX 2600.
  • B&M European Value Retail S.A.: Investec maintains its buy recommendation and reduces the target price from GBX 675 to GBX 650.
  • Best Buy Co., Inc.: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from USD 91 to USD 77.
  • Cf Industries Holdings, Inc.: Barclays downgrades to underweight from equalweight with a target price of USD 85.
  • Corteva, Inc.: Barclays downgrades to equalweight from overweight with a price target reduced from USD 66 to USD 50.
  • Crowdstrike Holdings, Inc.: JP Morgan maintains its overweight rating and raises the target price from USD 190 to USD 210.
  • Diageo Plc: Kepler Cheuvreux maintains its hold recommendation and reduces the target price from 3350 to GBX 3050.
  • Expedia Group, Inc.: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 130 to USD 135.
  • Extra Space Storage Inc.: Jefferies maintains its hold recommendation and reduces the target price from USD 129 to USD 125.
  • Fleetcor Technologies, Inc.: Mizuho Securities maintains a neutral recommendation with a price target reduced from USD 245 to USD 235.
  • Glencore Plc: AlphaValue/Baader Europe maintains its buy recommendation and reduces the target price from GBX 601 to GBX 599.
  • Informa Plc: Numis upgrades to buy from add with a price target raised from GBX 850 to GBX 900.
  • Intercontinental Hotels Group Plc: Berenberg downgrades to hold from buy with a price target reduced from GBX 6500 to GBX 6000.
  • Land Securities Group Plc: Numis maintains its add recommendation and reduces the target price from GBX 800 to GBX 720.
  • M&G Plc: RBC Capital downgrades to sector perform from outperform with a price target reduced from GBX 220 to GBX 200.
  • Marks & Spencer Group Plc: RBC Capital maintains its sector perform recommendation and raises the target price from GBX 250 to GBX 275.
  • Nutrien Ltd.: Barclays upgrades to overweight from underweight with a price target raised from USD 64 to USD 68.
  • Okta, Inc.: JP Morgan maintains a neutral recommendation with a price target reduced from USD 85 to USD 74.
  • Paypal Holdings, Inc.: Mizuho Securities maintains its buy recommendation and reduces the target price from USD 92 to USD 72.
  • Phoenix Group Holdings Plc: HSBC maintains its buy recommendation and raises the target price from 6.50 to GBP 6.55.
  • Public Storage: Jefferies maintains its buy recommendation and reduces the target price from USD 303 to USD 287.
  • Target Corporation: Jefferies maintains its buy recommendation and reduces the target price from USD 165 to USD 135.
  • The Mosaic Company: Barclays upgrades to overweight from underweight with a price target raised from USD 40 to USD 42.
  • Unilever Plc: Morgan Stanley maintains its market weight recommendation and reduces the target price from 4400 to GBX 4100.
  • Walmart Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 190 to USD 195.
  • Wise Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 1050 to GBX 1150.