The financial world made a big deal last week about Jerome Powell's speech at the Jackson Hole symposium, but in the end, there wasn’t much to talk about. Still, investor morale was somehow boosted by Powell’s speech, in which he reiterated that this year's inflation surge would prove temporary.

Investors were expecting Powell to confirm that the central bank's economic support would be reduced, and to provide some calendar details. Some of his more orthodox and voluble colleagues had been trying to push him in this direction without finesse during the previous week. But they failed to get him to agree to a schedule. Powell's tone was therefore considered a bit more cautious than expected, which allowed indexes to continue their rise and the S&P500 to sign the first closing in its history above 4500 points. Investors would rather not change the recipe that allowed them to for years.

The announcement of a gradual reduction in support in September remains possible, but good job data on Friday is essential, according to ING. As you may have guessed, the US August employment figures are becoming the most anticipated event of the week. Verdict on Friday. Strong data could confirm that the Fed will announce a timetable for tapering its asset purchases after its next meeting on September 22. Mixed data would restart the forecasting machine. Jerome Powell's speech didn't really sway forecasters.

But despite the prospect of monetary tightening, the accommodative environment is set to last for several years, almost by necessity. While there may be a bit of a reality check when tapering officially starts, the backdrop shouldn’t change much.

 

Today's economic highlights:

German inflation figures for August and the US housing data for July are today’s main indicator.

The dollar is trading at EUR 0.8479. The ounce of gold is trading at USD 1814. Oil is losing altitude, at USD 72.64 for Brent and USD 68.58 for WTI. The T-Bond yield is falling to 1.31% on 10-year, while the Bund yield is flat at -0.43%. Bitcoin is moving just below USD 48,000.

 

On markets:

* Apple and Alphabet - Australia is considering new laws that could tighten regulations on digital payment services such as Apple Pay and Google Pay, Finance Minister Josh Frydenberg said, awaiting the recommendations of a government-commissioned report.

* Moderna - Japan has suspended the use of an additional 1 million doses of the U.S. laboratory's COVID-19 vaccine after two people died after being vaccinated with contaminated batches and new batches were found to have impurities. Moderna shares are down 2.7 percent to $371.8 in pre-market trading.

* Tesla and NVidia - Elon Musk, chief executive of the U.S. automaker, expressed concerns about Nvidia's proposed $54 billion takeover of British chip designer Arm, The Telegraph reported Sunday, citing several sources.

* Baxter International - The pharmaceutical company is in advanced discussions to buy medical equipment maker Hill-Rom Holdings for about $10 billion, The Wall Street Journal reported Sunday, citing sources close to the matter.

* Affirm Holdings is up more than 37 percent in premarket trading after partnering with Amazon to make its deferred and multi-payment service available to some of the online retail giant's customers.

* Chinese video game groups are falling in premarket trading after Beijing's decision to limit minors' gaming time to one hour a day on Fridays, weekends and public holidays, the official Xinhua news agency reported Monday. Netease lost 7.8%

* Catalent, a pharmaceutical company, announced on Monday that it has bought vitamin gum manufacturer Bettera Holdings for $1 billion to expand into the dietary supplements market.

* McDonald’s - Some of the group's U.S. restaurants have decided to temporarily close or limit their hours of operation due to the spread of the Delta variant of the coronavirus, franchisees said.

 

Analyst recommendations:

  • Bill.com: Oppenheimer raises PT to $270 From $175, maintains Outperform rating
  • Brinker: Stifel downgrades to hold from buy. PT inches up 0.4% to $55
  • Canadian Imperial Bank of Commerce: TD Securities adjusts pt to CA$160 from CA$155, maintains buy rating
  • Capital One: Baird cut the recommendation to underperform from neutral. PT down 18% to $145
  • Dollar Tree: UBS Group adjusts price target to $120 from $130, keeps buy rating
  • Gap: Wedbush lowers PT for Gap to $32 From $40, maintains Neutral rating
  • Marvell Technology: BofA adjusts price target to $75 from $74, maintains buy rating
  • Ollie Bargain Outlet: JPMorgan downgrades to Neutral from Overweight, lowers PT to $77 from $96
  • The Toronto-Dominion Bank: National Bank adjusts PT to CA$89 from CA$91, maintains Sector Perform rating
  • Workday: Oppenheimer lifts PT to $285 from $265, maintains Outperform rating