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Dynamic quotes 

The improving picture is fueling sector rotation

05/04/2021 | 08:42am EDT

U.S. stock futures inched down this morning, as new data shows the trade deficit widened to a fresh record in March. All three Wall Street indexes are still close to record levels, thanks to a recent string of strong economic data and robust corporate earnings, despite inflation concerns and rising coronavirus cases in parts of the world.

The improving economic environment is fueling sector rotation, boosting companies that are expected to benefit the most from the recovery. First in line are energy and banking stocks, while technology shares are slowing down a bit.

The trade deficit increased 5.6% to an all-time high of $74.4 billion in March, the Commerce Department said. Economists polled by Reuters had forecast a $74.5 billion trade gap in March.

After their little slump at the end of last week, European indices recovered yesterday, while London and Tokyo were closed for a public holiday. In the United States, the fall in technology stocks led the Nasdaq 100 down by 0.4% while the Dow Jones was up by 0.7%. Investors still have a strong appetite for lower-than-average stocks and quality cyclicals, but they are not completely turning their backs on their beloved digital idols.

This stock market gazette can't escape the social column this morning, with the announcement of Bill and Melinda Gates' separation. "Bill and Melinda Gates" is almost a trademark, the Batman and Robin of philanthropy. The foundation built by the co-creator of Microsoft and his wife is probably the best known in the world. It is also probably the most generous, with more than 50 billion dollars devoted in 20 years to projects to fight exclusion, including 36 billion dollars from the Gates' pockets. Their marriage lasted 27 years, it is written everywhere this morning. Bill had met Melinda at Microsoft, when she was an employee.

Bill Gates and Melinda will continue to co-direct their foundation and leave as good friends after signing a confidential agreement to divide their assets, made necessary by the size of the family fortune. Bloomberg's billionaire ranking credits Bill with a fortune of $146 billion, the 4th largest in the world. Forbes only gives him $124 billion. This will not have any consequence on the Microsoft group, one of the most beautiful stock market success stories of the last decades. The group went public 35 years ago on March 13, 1986. An investor who would have bought USD 1000 of shares at the beginning would have a little more than 2.5 million dollars today, not counting dividends…

Today, corporate results are back in the news, with Pfizer, Axa or Ford, to name a few. This season so far, earnings are on average higher than expected, in significant proportions. Investors have understood this and continue to play the recovery in the profits of cyclical or poorly valued companies.


Economic highlights of the day:

Continuation of the final April manufacturing PMIs for countries that were off yesterday, notably China and the UK. In the United States, the March trade balance and March durable goods orders are released today.

The dollar is up slightly to EUR 1.8321. The ounce of gold is trading around USD 1782. Oil is up modestly to USD 65.25 per barrel WTI and USD 68.42 per barrel Brent. The US government bond yield remains stable at 1.6% over 10 years. Bitcoin corrects 2.8% to USD 55,667.


On markets:

* Pfizer on Tuesday raised its annual sales forecast for the covid-19 vaccine it is developing with BioNTech. The stock is up 0.8% in pre-market trading.

* Dupont raised its full-year profit and sales forecasts after first-quarter results beat expectations thanks to demand from chipmakers and a recovery in the automotive market, the industrial materials maker said Tuesday.

* Thomson Reuters reported higher quarterly revenue and profit and said it expects full-year revenue growth at the top end of its guidance range.

* CVS health gained 2.9% in premarket trading after reporting q1 earnings up 11%.

* Bunge reported a sharp increase in q1 adjusted earnings and raised its full-year earnings forecast. The grain trader's stock is up 2.8% in pre-market trading.

* ConocoPhillips ended a three-quarter losing streak with q1 adjusted earnings, buoyed by the reopening of economies and higher crude prices.

* Marathon Petroleum reported a smaller-than-expected q1 adjusted loss, helped by a recovery in fuel demand.

* Under Armour gained 3% in premarket trading after reporting quarterly sales that beat wall street expectations and raising its annual sales forecast.

* Bank of America hired Frenchman Emmanuel Régniez from Citigroup to co-head its investment banking franchise in France, an internal document seen by Reuters shows.

* TSMC - The Taiwanese semiconductor giant is considering building several semiconductor manufacturing plants in the state of Arizona, in addition to the one currently planned, three sources close to the matter told Reuters.

* KKR reported quarterly after-tax profit up 63 percent year-on-year on growth in its capital markets business and listed holdings.



Analyst recommendations:

Amundi: AlphaValue upgraded from Sell to Hold, targeting EUR 70.40.

Barclays: Investec upgraded from hold to buy targeting GBp 200.

BE Semiconductor: Kepler Cheuvreux upgraded from buy to hold with a EUR 72 target. ING remains long with target raised from EUR 75 to EUR 90.

Berkshire Hills Bancorp: Piper Sandler  raised the recommendation to overweight from neutral. PT set to $27, an 18% increase from last price

BNP Paribas: CFRA raises its target price from EUR 55 to EUR 65. Goldman Sachs remains a buyer with its price target raised from EUR 65 to EUR 67.

Cleveland-Cliffs Inc: Credit Suisse raised the recommendation to outperform from neutral. PT set to $24,a 32% increase from last price

Dollar General: KeyBanc Downgrades Dollar General to Sector Weight From Overweight on Valuation, removes $220 price target

ENI: Deutsche Bank retains his positive opinion on the stock with a Buy rating. The target price is unchanged at EUR 11.70.

Infineon Technologies AG: Credit Suisse reiterates its advice to buy the stock. The price remains set at EUR 42.50. Also gets a Buy rating from Goldman Sachs

International Consolidated Airlines: J.P. Morgan upgraded from neutral to overweight with a EUR 2.85 target.

Sanofi: Goldman Sachs remains Buy with a  price target raised from EUR 101 to EUR 105.

Schindler: Morgan Stanley maintains an in-line weighting with a price raised from CHF 240 to 250.

Siemens Healthineers: Deutsche Bank upgrades from Hold to Buy with EUR 56 target.

Swedbank: AlphaValue upgrades from Accumulate to Buy, targeting SEK 184.

Unilever: Berenberg's research maintains his neutral opinion on the stock.  The price target is now set at GBp 4550 compared to GBp 4600.

United States Steel Corp :Credit Suisse raised the recommendation to outperform from underperform. PT set to $35, a 42% increase from last price

ę MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
AMUNDI 0.00% 71.75 Real-time Quote.7.41%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.73% 0.77796 Delayed Quote.0.37%
AXA 1.40% 22.875 Real-time Quote.17.24%
BANK OF AMERICA CORPORATION 1.24% 42.36 Delayed Quote.39.76%
BARCLAYS PLC 1.40% 180.7 Delayed Quote.23.19%
BERKSHIRE HILLS BANCORP, INC. -0.34% 26.43 Delayed Quote.54.91%
BIONTECH SE 6.63% 192.77 Delayed Quote.136.47%
BITCOIN - EURO 0.82% 41596.91 Real-time Quote.73.35%
BITCOIN - UNITED STATES DOLLAR 1.15% 50505.53 Real-time Quote.71.31%
BNP PARIBAS 1.75% 57.04 Real-time Quote.32.33%
BRITISH POUND / US DOLLAR (GBP/USD) 0.34% 1.40928 Delayed Quote.2.72%
BUNGE LIMITED 1.48% 90.63 Delayed Quote.38.20%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.00% 0.8257 Delayed Quote.4.64%
CITIGROUP INC. 1.69% 76.56 Delayed Quote.24.16%
CLEVELAND-CLIFFS INC. -1.46% 19.51 Delayed Quote.34.00%
CONOCOPHILLIPS 4.20% 56.52 Delayed Quote.41.34%
CREDIT SUISSE GROUP AG 0.89% 9.308 Delayed Quote.-19.07%
CVS HEALTH CORPORATION 0.07% 84.33 Delayed Quote.23.47%
DEUTSCHE BANK AG 1.62% 11.776 Delayed Quote.31.59%
DJ INDUSTRIAL 1.06% 34382.13 Delayed Quote.9.74%
DOLLAR GENERAL CORPORATION 0.21% 206.2 Delayed Quote.-1.95%
DUPONT DE NEMOURS, INC. 1.98% 83.24 Delayed Quote.17.06%
ENI S.P.A. 1.22% 10.43 Delayed Quote.20.54%
EURO / US DOLLAR (EUR/USD) 0.57% 1.21451 Delayed Quote.-1.12%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.013655 Delayed Quote.-0.55%
INFINEON TECHNOLOGIES AG 3.25% 31.62 Delayed Quote.0.73%
INVESTEC GROUP 3.73% 55.27 End-of-day quote.50.85%
KKR & CO. INC. 2.12% 56.14 Delayed Quote.36.13%
LONDON BRENT OIL 2.73% 68.82 Delayed Quote.33.50%
MARATHON PETROLEUM CORPORATION 2.21% 60.08 Delayed Quote.42.12%
MICROSOFT CORPORATION 2.11% 248.15 Delayed Quote.9.27%
MORGAN STANLEY 2.93% 87.35 Delayed Quote.23.83%
NASDAQ 100 2.17% 13393.115242 Delayed Quote.0.88%
NASDAQ COMP. 2.32% 13429.978403 Delayed Quote.1.84%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.95% 0.72495 Delayed Quote.0.03%
PFIZER, INC. -0.20% 40.02 Delayed Quote.8.94%
S&P GSCI CRUDE OIL INDEX 2.61% 358.2154 Delayed Quote.34.62%
SANOFI 0.14% 86.72 Real-time Quote.10.19%
SCHINDLER HOLDING AG 1.29% 252.2 Delayed Quote.4.45%
SIEMENS AG 2.96% 144.48 Delayed Quote.22.94%
SIEMENS HEALTHINEERS AG -0.15% 46.55 Delayed Quote.10.89%
SWEDBANK AB 4.13% 154.42 Delayed Quote.2.90%
THE GOLDMAN SACHS GROUP, INC. 2.78% 368.77 Delayed Quote.39.84%
THOMSON REUTERS CORPORATION 0.30% 114.84 Delayed Quote.9.91%
UNDER ARMOUR, INC. 3.36% 22.78 Delayed Quote.32.67%
UNILEVER PLC 0.41% 4298 Delayed Quote.-2.23%
UNITED STATES STEEL CORPORATION -0.86% 25.5 Delayed Quote.52.06%
WTI 2.59% 65.462 Delayed Quote.36.35%