Most of the world's indices have indeed started 2021 on a high note, with the exception of some of the stars of 2020, including the Nasdaq 100, which is paying for investors' small overdose of technology stocks. The MSCI ACWI index, which covers 50 countries, has gained 3.5% since January 1.

If the performances are solid, things are seriously boiling underneath. The recipes of 2020 no longer work every time, and the new ones are not totally convincing. For example, we can see the automotive sector, a value bet that makes sense in these times, soaring and then falling back from one week to the next.

Yesterday, Jerome Powell did not deviate from his recent stance in his testimony: inflation will accelerate this year, but it will not be galloping or persistent, as the Fed has the necessary tools to control it. He is trying to convey the message that a rise in prices is not inevitable, but it seems that the information is not getting through. For her part, Janet Yellen, the new U.S. Treasury Secretary and Powell's predecessor at the Fed, confirmed that the money for the Biden administration's infrastructure investment plan will not fall from the sky. It will come in part from an increase in corporate tax, which is expected to rise from 21% to 28%, and from a tax on the very rich. Jerome Powell will also appear today before the US Senate Banking Committee, along Janet Yellen.

The violent short-term downward movement in oil is also on investors radar, as the black gold is back on its feet after having touched levels touched at the beginning of 2020 and twice in 2019. European lockdown are partly to blame, but there are other forces at work, most notably the approach of an OPEC+ meeting next week and the fact that the bullish bet on oil had become a bit too bottled up. Late last year, investors cited rising oil as their 3rd most likely bet for 2021 (behind rising emerging markets and the S&P500).

Today, PMI indicators that will be closely scrutinized, as they provide good indications of short-term activity by measuring the dynamics of companies via the behavior of their purchasing managers. They will be published throughout the day for the world's major economies.

 

Today's economic highlights

March flash PMIs will be released for the major economies. In the US, they will be coupled with durable goods orders and oil inventories.

The euro is down to USD 1.18488. The ounce of gold is trading at USD 1731. Oil is recovering after a severe purge, at USD 60.82 a barrel of Brent and USD 57.77 a barrel of WTI. The yield on the 10-year T-Bond has fallen to 1.6%. Bitcoin is stabilizing at 54,300 USD.

 

On markets:

*Intel is gaining more than 5% in pre-market trading after announcing Tuesday that it plans to invest up to $20 billion to expand its semiconductor production capacity by building two plants in Arizona that will be open to outside customers.

*The group's major direct competitor, AMD, is down 0.8%, while industry equipment makers Applied Materials, Lam Research and ASML are up between 4% and 5%.

*Tesla is up 1.6% in premarket trading as CEO Elon Musk announced that it is now possible to buy a Tesla car in the U.S. and paying for it with bitcoin.

*Shares of oil companies are rising in pre-market trading in the wake of crude prices after a container ship grounded in the Suez Canal, blocking shipping traffic on one of the world's busiest trade routes. Exxon Mobil, Chevron, Schlumbergern, Occidental Petroleum and Marathon oil gained between 1% and 4.2%.

*In other news, Moody's on Tuesday downgraded Exxon Mobil's credit rating to "Aa2" from "Aa1", saying that maintaining a high dividend will slow debt reduction.

*Hong Kong temporarily suspended the use of the Pfizer Covid-19 vaccine developed by Pfizer and BioNTech Laboratories, citing defective packaging.

*Carrefour announced Wednesday that it has reached an agreement with Advent International and Walmart to acquire Grupo BIG, the third-largest food retailer in Brazil.

*Adobe gained more than 1% in premarket trading after reporting better-than-expected quarterly results and raising its annual guidance.

*Gamestop fell 13% in premarket trading after announcing a capital increase to take advantage of the more than 800% surge in the share price since January as individual investors rallied on the stock against short sellers.

General Mills' shares lost 3.1% in premarket trading after the publication of a lower-than-expected adjusted quarterly profit.