No market can boast of concentrating so much power on such locomotives. Apple, Microsoft and Alphabet are paying between 25 and 31 times next year's expected results. The S&P500 has gained 23% per year on average over the last three years. But over the 2009/2014 sequence, it was up 17.2% per year, which is already not so bad. In the period from the internet bubble of 2000 to the financial crisis of 2008, index performance was less dashing, especially since it included three years of decline between 2000 and 2002 and the plunge of 2008 (-38.5%).
Let’s remember that the period before the internet bubble had never been so good: the S&P500 had five consecutive years of strong growth with an average annual increase of 26.3%. In the end, not everything was so different before, the most expensive companies are not always the ones you thought and financial analysis was also often unable to capture the specific qualities of a stock. This is why we must constantly question ourselves and avoid preconceived ideas.
The end of the year is generally favorable for equity markets. Will they manage to surpass their recent records to end 2021 on a high? That is the challenge for the coming sessions, at least if the holiday break manages to allay investors' fears about the change in context brought about by the less generous policies of central banks.
Economic highlights of the day:
In the U.S., the latest estimate of Q3 GDP shows the U.S. economy expanded at an annual 2.3% pace in the third quarter, up from a prior estimate of 2.1%, the Commerce Department said. Other indicators released today include the Chicago Fed's November activity index, November housing sales and the DOE's weekly oil inventories.
The dollar is trading at EUR 0.8835, while gold is back in its sweet spot of recent weeks at USD 1,793 an ounce. Oil is up slightly with a barrel at USD 74.10 for Brent and USD 71.31 for WTI. The yield on US debt is taking the upside at 1.47% over 10 years. Bitcoin is trading slightly below USD 49,000.
* Tesla CEO Elon Musk said in an interview published Tuesday that he had sold "enough shares" to reach his goal of selling 10% of the carmaker's capital, the world's largest market capitalization in the sector. Separately, the National Highway Traffic Safety Administration (NHTSA), the U.S. traffic safety authority, announced Wednesday that it has opened a formal investigation into 580,000 Tesla vehicles equipped with a large front touchscreen that allows for video game play since 2017.
* Intel- South Korea's SK Hynix said Wednesday it has received the green light from Chinese competition authorities for its proposed $9 billion takeover of Intel's NAND memory chip business.
* Amazon, Meta Platforms, Twitter and Pinterest - The four groups announced Tuesday that they would not attend the Consumer Electronics Show (CES) in Las Vegas, the leading electronics trade show scheduled for Jan. 5-8, due to concerns about the Omicron variant of the coronavirus.
* Blackberry - The Canadian company reported quarterly sales Tuesday night that beat Wall Street expectations on the back of steady demand for its cybersecurity and Internet of Things products, but the figure was down from the same period a year ago. The stock is down 1.2% to $9.14 in after-hours trading.
* KKR - Italian Council President Mario Draghi said Wednesday that Rome had not made any decisions on the future of Telecom Italia, which has received a $12 billion buyout offer from the U.S. investment fund.
* Biogen - Japanese health ministry experts said Wednesday that inconsistent results from trials of Adulhelm, an Alzheimer's treatment developed by Eisai and Biogen, made it difficult to assess its effectiveness. Biogen's stock is down 1% in pre-market trading.
* Pfizer - The U.S. laboratory announced Wednesday that it would supply the United Kingdom with an additional 2.5 million doses of its antiviral treatment Paxlovid against COVID-19.
* Caterpillar - Bernstein raised its recommendation on the stock to "outperform" from "in line with the sector", with a price target raised from $200 to $240.
- Agco: Bernstein downgrades to market perform. PT up 11% to $127
- Bank of Montreal: CIBC downgrades Bank of Montreal to Neutral from Outperform, keeps $157 PT
- Biogen: JPMorgan adjusts PT on Biogen to $276 from $324, maintains Neutral rating
- Caterpillar: Bernstein raised the recommendation to outperform. PT up 21% to $240
- Cerner Corporation: Baird adjusts PT on Cerner to $95 from $82, maintains Neutral rating
- Cineworld: Jefferies downgrades from buy to hold at around GBp 35.
- Darden: Stifel analyst raised the recommendation to buy from hold. PT up 15% to $165.
- JD Sports Fashion: Berenberg remains long with a reduced target of GBp 1,200 to GBp 240.
- Marvell Technology: Citigroup adjusts PT on Marvell Technology to $97 from $87, maintains Buy rating
- Micron Technology: BofA Securities raises stock to Buy from Neutral, price objective to $100 from $76
- Microsoft: SMBC Nikko initiated coverage with a recommendation of outperform. PT up 25% to $410
- Nike: DA Davidson raises PT to $179 from $174, keeps Buy rating
- Novavax: JPMorgan adjusts Novavax's PT to $209 from $172, keeps Neutral rating
- Paccar: Bernstein raised its recommendation to outperform. PT up 18% to $98
- Upstart: Wedbush initiated coverage with a recommendation of neutral. PT up 7% to $160