September 1 is upon us, and its time to have a look at the performance from markets so far. The S&P 500 is up 20.40 % since Jan 1, while the Nasdaq and the Dow gained 18.40 % and 15.50 % respectively over the same period.

All sectors are showing positive trends, and cyclical sectors (industrial, consumer), technology and financials are on the rise. Semiconductor production equipment are doing well, since they are at the heart of the industry's response to the global chip shortage.

As past performance is no guide to future performance, let's now look at the latest issues being discussed across markets. First of all, it is worth noting that US indexes did not set another record close yesterday, which is perfectly shocking. In Europe, there was a lot of talk yesterday about a possible reduction in the ECB's asset purchase program. There are two reasons for this. First, the publication of an estimated European annual inflation rate of 3% in August (1.6% for core inflation), accelerating from July (2.2%). Secondly, the somewhat kamikaze exit of Robert Holzmann, the Austrian representative on the ECB's Governing Council, who argued in favor of a reduction in the central bank's PEPP plan, deployed to counter the effects of the pandemic, as of the last quarter of 2021. This American-style scenario could spice up ECB's discussions at its September 8-9 meeting and could rekindle the North-South quarrel within the institution.

The manufacturing PMIs have been released for most advanced economies, with the eurozone and the UK slowing. August was a complicated month for Chinese industry, whose Caixin PMI indicator, confirming the official reading, went into contraction territory. Once again, this was not enough to upset the Asian indices, which gained ground at the end of the day. Perhaps because they are counting on a new support plan, this time from Beijing?

 

Economic highlights of the day:

The final August manufacturing PMIs will be released throughout the day. Other important indicators include German retail sales, Eurozone employment and a slew of US statistics: ADP employment survey, ISM manufacturing, construction spending, and oil inventories. This morning, China announced a Caixin manufacturing PMI of 49.2 points, thus in contraction zone. The Japanese manufacturing PMI, on the other hand, was better than expected.

The dollar is down to EUR 0.8450. Gold is up to USD 1815 per ounce. In the oil market, Brent crude is USD 70.94 per barrel, while WTI is up to USD 67.69 per barrel. The yield on 10-year US debt is back up to 1.33% and the Bund yield is up to -0.39%. Bitcoin is hovering around the USD 47,500 mark.

 

On markets:

* Japan's Kanagawa Prefecture announced it has suspended the use of a new batch of Moderna's COVID-19 vaccine after discovering black particles in a vial.

* Intuit, the publisher of tax software TurboTax and accounting software QuickBooks is discussing a possible buyout of marketing specialist Mailchimp for more than $10 billion (€8.5 billion), Bloomberg reported, citing sources close to the matter.

* Google, announced Wednesday that it has appealed against the 500 million euro fine imposed on the group in July by the French competition authority in the neighboring rights case.

* Campbell Soup - The food company reported Wednesday above-consensus IBES by Refinitiv sales and earnings per share for the fourth quarter of its fiscal year, but its 2022 earnings forecast came in below expectations due to higher costs.

* Nio - The Chinese electric vehicle maker on Wednesday lowered its third-quarter shipment forecast due to uncertainties over semiconductor supplies. In pre-market trading, the stock lost more than 4%.

* Kansas City Southern - The U.S. rail regulator on Tuesday rejected a proposed ownership transfer that would have allowed Canada National Railway to launch its $29 billion bid for Kansas City Southern.

* Walmart plans to hire 20,000 people and raise wages before the holiday season as the U.S. retail giant anticipates increased demand.

 

Analyst recommendations:

  • American Water: HSBC downgrades to hold from buy. PT up 4.3% to $190
  • Broadcom : Susquehanna raises price target to $580 from $540, maintains positive rating
  • Bunzl: Stifel downgrades to hold from buy. PT up 5% to 2,750 pence
  • Catalent : JPMorgan adjusts price target to $155 from $140, maintains overweight rating
  • Enerplus : Raymond James adjusts pt to CA$11.50 from CA$11, maintains outperform rating
  • JD Sports Fashion: Berenberg remains Buy with a target price raised from GBp1,100 to GBp1,200.
  • Piper Sandler : Northland adjusts price target to $161 from $135, reiterates outperform rating
  • Pixelworks : Roth Capital adjusts pixelworks pt to $10 from $5, maintains buy rating
  • Plug power: Wolfe Research initiated coverage with a recommendation of outperform. PT set to $34
  • PPL: Wells Fargo Securities upgrades to overweight from equal-weight. PT up 16% to $34
  • Realogy: Keefe, Bruyette & Woods upgrades to outperform from market perform. PT jumps 60% to $28
  • Tyman: Berenberg upgraded from Hold to Buy with a target of GBP 500.
  • Verint: Cowen initiates coverage at Outperform,  PT $75
  • Zebra Tech: Mirae Asset Daewoo initiated coverage  with a recommendation of buy. PT at $740
  • Zoom Video Communications : Deutsche Bank adjusts pt to $350 from $375, maintains hold rating