Risk-appetite is back - flows into risky corporate debt, or "high yield" bonds, returned to positive territory three weeks ago. Last week also saw the largest inflow of funds into the technology sector in the last eight weeks.
Yesterday, Walmart and The Home Depot, which experienced tough times not so long ago after reducing their annual outlook, published better-than-expected results yesterday. This is a positive signal for the US consumer and for the economy. However, the results of the two retail giants are still down- you don't come out of a high inflation and a slowing economy unscathed - but they are nowhere as bad as feared. This is what matters to investors looking for the tipping point. Another positive signal was that authorities announced that US industrial production rebounded twice as much as expected in July.
But today, investors realized that they might have gotten excited too quickly. Another big retailer, Target, posted quarterly earnings below market expectations. Also, US retail sales - published this morning - remained unchanged last month, against 0.1% expected, and after an 0.8% gain in June, according to data from the Commerce Department.
The spending of US consumers, which accounts for nearly 70% of economic activity, has been reduced overall and shifted increasingly toward necessities like groceries and away from discretionary items like home goods, casual clothes and electronics. But overall, it still remains remarkably resilient, given the current high inflation.
On a completely different note, Elon Musk was probably bored of not being at the center of attention lately. So he tweeted that he was going to buy the Manchester United soccer club, which led to a cascade of agency dispatches and comments. Before clarifying a little later that this is an old running-gag on the social network and that he "does not buy sports teams". Musk has already written in the past that he wanted to buy Coca-Cola to put cocaine in it, or announced the bankruptcy of Tesla. But he has also implemented projects such as the Boring Company or the draft of a takeover of Twitter, the outcome of which is not yet known. So even the most bizarre positions he takes can lead to something.
There will be few corporate earnings releases today, including Cisco.
Economic highlights of the day:
US retail sales for July and the minutes of the last Fed meeting are on the agenda today. All the macro agenda is here.
One dollar is worth EUR 0.9847. The ounce of gold is trading at USD 1769. The North Sea Brent is down to USD 92.03 per barrel and US light crude WTI at USD 86.55. The yield on 10-year US debt is rising slightly to 2.82%. Bitcoin is trading around USD 23,599.
* Lowe's - The No. 2 U.S. home improvement retailer reported an unexpected decline in like-for-like sales in its fiscal second quarter and said it expects full-year sales to be at the low end of its guidance range of -1% to +1%. However, it expects full-year earnings per share at the top end of the range. The stock gained 3.5% in pre-market trading just after the release of the results.
* Target - The supermarket group reported a 90% drop in quarterly profit and lower-than-expected like-for-like sales, the result of the impact of inflation on unconstrained consumption despite major promotions. The stock lost 2.9% in pre-market trading.
* Apple's suppliers are planning to produce Apple Watch and MacBook in Vietnam for the first time, Nikkei Asia reported Tuesday. In addition, Credit Suisse resumed its monitoring of the stock with an "outperform" opinion versus "neutral" with a price target raised from $166 to $201.
* Alphabet - Australia's highest court on Wednesday overturned a court ruling that found Alphabet subsidiary Google guilty of defamation for providing a link to a disputed news article.
* Amazon - Employees at a warehouse of the online retail giant near Albany, New York, want to unionize, the National Labor Relations Board, a U.S. government agency charged with conducting union elections, announced Tuesday.
* Cisco will release its quarterly earnings after the close of the New York Stock Exchange.
* Endo International - The U.S. drugmaker, which is facing thousands of claims related to the opioid crisis, filed for bankruptcy protection Tuesday after reaching a $6 billion settlement with some of its creditors. The stock jumps 21.6 percent in pre-market trading.
* Northrop Grumman - The defense group's stock gained 1.13% in premarket trading after announcing its inclusion in the White House's government support program for new industrial technologies.
- Ansys: Wolfe Research initiated coverage with a recommendation of outperform, implies a 13% increase from last price.
- BioNTech: Cowen initiated coverage with a recommendation of market perform.
- Cadence Design Systems: Wolfe Research starts with a recommendation of buy. PT jumps 9% to $210.
- Cardinal Health: Deutsche Bank maintains hold rating and set price target to $72.
- Cheniere Energy: Barclays moves to overweight rating and price target up to $186.
- EOG Resources: Mercury Securities raised the recommendation to buy from hold; PT up 11% to $124.67.
- Fabrinet: Loop capital maintains buy rating. PT set to $138.
- The Home Depot: J.P. Morgan maintains overweight rating. PT adjusts to $347 from $311.
- Intercontinental Exchange: Rosenblatt Securities upgrades to buy. PT jumps 48% to $164.
- Life Storage: Raymond James maintains outperform rating. PT up to $145 from $125.
- MongoDB: Barclays raises price target to $438 from $338. Maintains overweight rating.
- Sea Limited: Daiwa Securities downgrades to hold from buy. PT set to $80.
- Shoals Technologies: Cowen & Co adjusts price target to $29 from $20. Maintains market perform rating.
- Stanley Black & Decker: Deutsche Bank lowers to hold from buy.
- Synopsys: Wolfe Research initiated coverage with a recommendation of outperform. PT up 14%.
- Veeva Systems: Morgan Stanley maintains equalweight rating. PT increase to $190 from $175.
- Vertex Pharmaceuticals: Piper Sandler adjusts price target to $288 from $256. Maintains neutral rating.
- Walmart: Baird raised the target to $155 from $140. Maintains outperform rating.