The broad S&P500 index signed a 51st high of the year at the close. For those who like statistics, it looks like you need to reach 62 to beat 2017's score, and 78 to land an all-time record by surpassing 1995's 77 highs. That year, the US index had gained 34%, foreshadowing a golden period for equity markets, which ended with the bursting of the internet bubble in 2000.
Major investors remain steady ahead of the central bankers' meeting in Jackson Hole, USA, culminating in a speech by Fed boss Jerome Powell, who could provide further details on US monetary policy on Friday at a pivotal economic moment.
In other news, a series of new developments highlight abuses in ESG finance, which consists in investing money in supports presumed to be more virtuous than the average, whether it be on the environmental, social or governance level. Lately, this way of investing has been very popular, so much so that intermediaries have competed in terms of ingenuity to improve their range of products. There is a great deal of dishonesty in this, but sometimes also candor among both prescribers and clients. This is largely due to a variable geometry definition of ESG and to overly disparate rating criteria.
This is illustrated by a series of articles in the Wall Street Journal which announces that DWS, the asset manager of Deutsche Bank, is under investigation by the American authorities for misleading advertising. The WSJ, relying on internal documents and statements by the asset manager's former head of sustainable development, accuses DWS of painting a rather too rosy picture of the ESG nature of its investments to forge a green image. The group, which at the end of 2020 claimed to have 58% of its €793 billion of assets under management invested in ESG products, denies this.
Everywhere, we can see ads praising the merits of this or that product capable of advancing the cause of women, curbing overpaid bosses and reducing global temperatures, for a remuneration that would make a savings account hide in shame. Directing financial flows to the most virtuous actors is a good idea to advance the ESG cause, but the criteria must be objective and shared by all. For the moment, it is mainly marketing that is leading the way. Fortunately, there are financial intermediaries who are becoming more and more selective, but they are not yet the most vocal.
It is possible that indexes will remain in relatively narrow bounds until the end of the week and the first important statements from Jackson Hole. There is some excitement coming from corporate earnings, particularly technology in the United States.
Today's economic highlights:
Weekly jobless claims remain steady over the past week, totaling 353,000 for the week ended Aug. 14, a slight increase from the previous week’s 349,000, the Labor Department said. Meanwhile, new data shows gross domestic product increased at a 6.6% annualized pace in the second quarter.
The dollar is trading at EUR 0.8507, while the ounce of gold is falling below USD 1782. Oil is stabilizing at USD 71.55 for Brent and USD 67.58 for WTI. The yield on the 10-year T-Bond is back up to 1.33% and the Bund to -0.46%. Bitcoin is losing ground to USD 47,000.
* Salesforce was gaining 2% Wednesday in after-hours trading after reporting above-expectations quarterly results and saying demand for its cloud services will remain strong in the third quarter thanks to telecommuting.
* Moderna - Japan on Thursday suspended the use of 1.63 million doses of Moderna's COVID-19 vaccine more than a week after distributor Takeda Pharmaceutical was notified of contaminants in some vials. Spanish pharmaceutical group Rovi said Thursday that potential contamination of some doses of the vaccine it produces for Moderna was being investigated and appeared to be limited to certain batches destined for Japan.
* Western Digital - The U.S. data storage specialist is in advanced discussions about a possible $20 billion merger with Japanese semiconductor maker Kioxia Holdings, with which it is already allied, a person close to the matter told Reuters. In pre-market trading, the stock gained 1.2 percent.
* Coty expects its annual sales to return to growth for the first time in at least three years, the cosmetics group said on Thursday, with its shares rising 4.3% in premarket trading.
* Lordstown Motors announced Thursday that it has appointed Daniel Ninivaggi as chief executive officer with immediate effect. The stock gained 3.4% in premarket trading.
* KKR, Blackstone - Toshiba is in talks with at least four private equity groups, including U.S. firms KKR and Blackstone, to get their ideas for its new strategy, three sources close to the matter told Reuters.
* Facebook has approached academics and political experts to form a commission to advise the social network on election issues, the New York Times reported on Wednesday, citing five people close to the matter.
* Dollar General - The retail group issued a full-year profit forecast Thursday that fell short of market expectations as rising costs related to supply chain strains weighed on its margins. The stock lost nearly 4% in pre-market trading.
- Avon Protection: Berenberg maintains a hold rating with a price target reduced from 2955 to 1740 GBp.
- Best Buy: BofA Securities raises pt to $157 from $145, keeps buy rating
- Beazley: Goldman Sachs resumes its Buy rating with a target of GBp 580.
- DICK'S Sporting Goods: Raymond James upgrades to market perform from underperform
- Doximity: JPMorgan downgrades to neutral from overweight; price target is $70
- Flutter: Berenberg remains a Hold with a price target raised from GBp 14,700 to GBp 15,800.
- Hiscox: Goldman Sachs resumes its Buy rating with a target of GBp 1,100.
- Lancashire Holdings: Goldman Sachs reiterates its Neutral rating with a GBP 650 target.
- Nordstrom: Morgan Stanley cut the recommendation to underweight from equal-weight. PT down 13% to $27
- Pentair: J.P. Morgan downgrades Pentair Plc to underweight from overweight. PT down 18% to $65
- Salesforce: KGI Securities raised the recommendation to outperform from neutral. PT jumps 27% to $330
- Tesco: Jefferies remains Buy with a price target raised from GBP 310 to GBP 330.
- The Bank of Nova Scotia: National Bank adjusts pt to CA$86 from CA$84, maintains sector perform rating
- Toll Brothers: Wedbush lifts pt to $64 from $58 on pricing power, maintains neutral rating
- Urban Outfitters: Morgan Stanley adjusts urban outfitters pt to $45 from $44, maintains overweight rating
- Ventas: BMO Capital Markets upgrades to market perform from underperform. PT raised 8.8% to $60
- Welltower: BMO Capital Markets raised the recommendation to outperform from market perform. PT up 18% to $100