Fresh data indicates that U.S. retail sales progressed more than expected in October (+1.7%), at their fastest pace since March, in spite of rising prices. The stronger the US economy, the likelier that a rate hike is around the corner. The head of the Federal Reserve of St. Louis, James Bullard, said he is in favor of raising the Fed's rates at least twice in 2022.
Equity markets still know no bounds and continue their 2021 ascent, flying from peak to peak, with investors remaining confident in the ability of central banks to maintain stability. Meanwhile, economies remain buoyant and support high valuation levels across a portion of the stock market.
The Nasdaq and the S&P500 are approaching gains of 25% since January 1. This strength is visible almost everywhere across Western markets. The only exception is Asia, especially China, although the Hang Seng, the Hong Kong index, is now recovering. Despite shortages and price increases, US households are doing what they do best, consuming and spending. This is part of the reason why businesses are confident in their year-end prospects, despite the current headwinds.
Today, there are no major indicators on the horizon. Early this morning, Japan released mixed figures for its foreign trade in October, with exports slightly less dynamic than expected. Several Fed central bankers are scheduled to speak today, but the interest of these speeches is often variable and does not really allow for anticipation. It's also worth noting that Sino-U.S. relations have evolved a bit after the initial bittersweet post-summit communications between Joe Biden and Xi Jinping yesterday. The Chinese president's second acknowledged that his country cannot develop in isolation. For what it's worth, the dialogue remains open between the two powers. Finally, the debt ceiling in the United States could be discussed again as early as December 15, warned Treasury Secretary Janet Yellen, who urged Congress to avoid a new political comedy around a new increase.
Economic highlights of the day:
The final October inflation figures for the euro zone, the October housing starts & building permits in the US and the weekly US oil inventories are the main indicators today.
The USD/EUR pair hovers around EUR 0.8840. The ounce of gold regained some ground at USD 1865 , while oil fell to USD 80.18 per barrel of WTI and USD 82.02 per barrel of Brent. The rise in bond yields continues in the United States with 10-year US debt paying 1.64%, while in Europe, the Bund varies little at -0.25%. Bitcoin continues its decline to USD 59,715.
* Target on Wednesday raised its full-year like-for-like revenue forecast after beating expectations in the third quarter on anticipation of holiday shopping by U.S. households. However, the stock is down 3.1% in pre-market trading as margins in the quarter were affected by supply chain strains.
* Amazon announced Wednesday that it will stop accepting Visa credit cards issued in the U.K. starting next year due to high fees charged on transactions by the U.S. payment card giant. Visa shares are down 2.5% in pre-market trading.
* Pfizer said Tuesday it has applied for U.S. approval of its experimental COVID-19 antiviral treatment after a clinical trial showed it reduced the risk of hospitalization or death by 89 percent in people at risk of developing severe forms of the disease. The stock gained 0.8% in trading before the Wall Street opening. The group also announced the retirement of its chief financial officer, Frank D'Amelio.
* Tesla - Elon Musk, the auto company's chief executive, sold an additional $973 million worth of shares to pay taxes after exercising options Tuesday, according to a stock advisory. The stock is up 1.6% in pre-opening Wall Street trading.
* Biogen announced Wednesday that the European Medicines Agency panel voted against the marketing application for its Alzheimer's disease treatment. The U.S. laboratory is down 3.6% in pre-market trading.
* Lowe’s raised its full-year sales forecast on Wednesday on the back of strong construction demand and a robust U.S. housing market. The stock is up 3.4% in pre-market trading.
* Lucid Group - The electric vehicle maker is up 8.6 percent to $60.3 a share in premarket trading after announcing Tuesday that reservations for its cars reached 13,000 units in the third quarter. The group's market capitalization is now larger than FORD MOTOR and GENERAL MOTORS.
* Vir Biotechnology - The U.S. has signed two contracts worth about $1 billion (nearly 900 million euros) for an order for the COVID-19 monoclonal antibody treatment sotrovimab, developed by British drugmaker GSK and U.S. biotech Vir, the two companies announced Wednesday in a joint statement. Vir's shares rose 8.9 percent to $36.40 in premarket trading.
* Baidu on Wednesday reported better-than-expected third-quarter revenue and adjusted earnings thanks to higher advertising revenue and demand for its cloud computing and artificial intelligence products. The stock is up 1.6% in pre-market trading.
- American Woodmark: Jefferies analyst cut the recommendation to hold from buy. PT up 2.4% to $77
- ASOS: Jefferies remains Buy with a price target reduced from GBp 5800 to GBp 4050.
- Century Aluminum: Wolfe Research initiated coverage with a recommendation of outperform. PT set to $19
- Cerner Corporation: Baird starts at neutral with $82 price target
- Choice Hotels: Wells Fargo Securities downgrades to equal-weight from overweight. PT up 2.3% to $155.
- Compass Minerals: BMO Capital Markets upgrades to market perform from underperform. PT down 3.5% to $55
- Diageo: Jefferies remains Buy with a target price raised from GBp 4,200 to GBp 4,800.
- Hyatt: Wells Fargo Securities raised the recommendation on Hyatt Hotels Corp. Class A to overweight from equal-weight. PT up 15% to $96
- Marks and Spencer: Jefferies upgrades from buy to hold with a target of GBP 250.
- MGE Energy: Morgan Stanley downgrades to underweight from equal-weight. PT up 12% to $69
- Neurocrine Bio: J.P. Morgan raised the recommendation to overweight from neutral. PT surges 40% to $124
- Nucor: Wolfe Research initiated coverage with a recommendation of peerperform. PT down 6.9% to $104
- Rockwell Automation: Loop Capital Markets initiated coverage with a recommendation of hold. PT set to $315
- Sea Limited: BofA Securities downgrades sea to neutral from buy, adjusts price target to $385 from $380
- The Boeing Company: Wells Fargo Securities raised the recommendation to overweight from equal-weight. PT up 20% to $272
- The Home Depot: JPMorgan adjusts price target to $413 from $397, maintains overweight rating
- United States Steel Corp: Wolfe Research reinstated coverage with a recommendation of peerperform. PT up 6.7% to $27.
- Walmart: Evercore ISI lowers price target to $140 from $145, maintains in-line rating
- Welltower: Barclays analyst raised the recommendation to overweight from suspended coverage. PT up 9.5% to $92