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Today on Wall Street: Markets find calmer waters

05/26/2021 | 09:04am EDT

Investors’ morale is high after Richard Clarida, the Fed's vice chairman, said on Tuesday that price pressures would prove to be essentially transitory. He reiterated that he Fed would be able to control inflation without derailing the economic recovery, adding that the Fed could start discussing the appropriate timing to begin reducing bond purchases at its next policy meetings, which will be held on June 15-16, July 27-28, and September 21-22.

The decline in intensity is confirmed on financial markets, where indices moved within very narrow limits yesterday, closing in scattered order, but never very far from equilibrium. The rebound in growth and the reopening of economies are now well entrenched in stock prices, and the next bullish catalyst is overdue. Markets lack the fuel for further acceleration.

Pockets of volatility are shrinking, even if it is always possible to create new ones on demand. Social networks make this possible. Yesterday, "meme stocks" jumped again in the United States, driven by trading communities. +16% for GameStop, +20% for AMC Entertainment or +23% for Koss, three stocks "protected" by users of Reddit and elsewhere. The objective would be once again, it is said, to "blow up" short sellers, at least those who had the leather tanned enough to challenge the horde of "retail investors".

In today's news, it is worth noting the return of gold above the symbolic USD 1900 per ounce mark, a first since the beginning of January. A combination of dollar weakness, rising inflation and a lack of investment ideas explain this rebound. We forget that Keynes' "barbarian relic" was the most profitable "classic" asset class in 2020, with a gain of 24.8%, ahead of US stocks (+16.3% for the S&P500). It had been suffering for several months from the return of risk appetite in the markets. Let's stay in the macroeconomic field with the criticisms aimed at the global minimum tax rate for companies defended by the Biden administration, which has largely watered down its initial proposal by proposing to set the cursor at 15%. This rate is still bothering the United Kingdom, which is talking about the need to find a compromise, and Ireland, which is rejecting the project.


Economic highlights of the day

Weekly oil inventories in the US is the most important indicator of the day.

The dollar is rising to 0.8177. The ounce of gold is up to USD 1912. Oil is almost stable at USD 65.67 per barrel WTI and USD 68.33 per barrel Brent. The yield on the 10-year U.S. government bond falls to 1.57%. Bitcoin rebounds to USD 40,200.


On markets:

* Facebook may be investigated by the European competition authority in the coming weeks over its Facebook marketplace classifieds service, a source familiar with the matter said.

* Amazon - a potential takeover of MGM studios by amazon would only benefit the online retail giant, according to a Citigroup note.

* Capri, owner of luxury brands Michael Kors, Versace and Jimmy Choo, issued a better-than-expected annual sales forecast Wednesday, betting on customers returning to stores in the U.S. The stock gained 3% in pre-market trading.

* Nordstrom - the department store group reported a larger-than-expected quarterly loss on Tuesday night, the result of massive discounting in an attempt to clear inventory and heightened competition in the sector. The stock was down 7% in after-hours trading.

* Abercrombie & Fitch reported better-than-expected quarterly sales on Wednesday.

* Zscaler gained 10.6% in premarket trading after the cloud security specialist reported better-than-expected quarterly results and guidance.

* Agilent technologies gained about 3% in after-hours trading Tuesday in response to better-than-expected quarterly results and an increase in guidance.

* Carlyle - the private equity group is to buy British pharmaceutical company Vectura, which specializes in inhalers, for £958 million (€1.1 billion).

* Pinduoduo - the Chinese online shopping group reported above-expected quarterly revenue on strong demand. The share price rose 2.9% in pre-market trading.

* Microsoft and Italian defense group Leonardo announced Wednesday a partnership for the digital transformation of Italian public administration and critical national infrastructure.


Analyst recommendations:

  • America's Car-Mart : Janney raises fair value estimate to $170 from $123, stays Neutral 
  • Antofagasta: Peel Hunt upgrades from 'light' to 'hold' with a target of GBp1520.
  • Close Brothers: Jefferies upgrades from Underperform to Hold with a target of GBp 1,500.
  • Croda: Goldman Sachs upgrades from sell to buy with a target of GBP 8,000.
  • easyJet: Bernstein retains his positive opinion on the stock with a Buy rating. The target price remains unchanged at GBp 1150
  • Flutter: HSBC upgrades from light to hold targeting GBp 14,000.
  • Illinois Tool Works : Barclays downgrades to Underweight from Equal-Weight, PT adjusted to $220 from $240
  • Intuit : KeyBanc raises PT to $475 From $450, keeps Overweight rating
  • Johnson Controls International : Barclays upgrades to Overweight from Equal-Weight, PT to $75 from $67
  • Prudential Bancorp : Piper Sandler starts coverage at Neutral with $15 Price Target
  • Shake Shack : Wedbush upgrades Shake Shack to Outperform 
  • Travis Perkins: Jefferies remains Buy with a price target reduced from 1953 to 1906 GBp.
  • Virgin Galactic : Canaccord Genuity starts coverage at Buy with $35 Price Target
  • Walmart : Argus adjusts Price target to $165 from $164, keeps Buy rating


© MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
ABERCROMBIE & FITCH CO. -5.66% 36.17 Delayed Quote.84.33%
AGILENT TECHNOLOGIES, INC. 0.16% 154.11 Delayed Quote.29.85%
AMAZON.COM, INC. -0.15% 3360.22 Delayed Quote.3.36%
AMC ENTERTAINMENT HOLDINGS, INC. -8.78% 30.37 Delayed Quote.1,484.43%
ANTOFAGASTA PLC 0.00% 1529 Delayed Quote.6.14%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.25% 0.73763 Delayed Quote.-4.33%
BARCLAYS PLC 1.41% 178.84 Delayed Quote.20.23%
BITCOIN - EURO 3.21% 33294.58 Real-time Quote.36.60%
BITCOIN - UNITED STATES DOLLAR 2.92% 39389.64 Real-time Quote.32.47%
BRITISH POUND / US DOLLAR (GBP/USD) -0.07% 1.39042 Delayed Quote.1.58%
CANACCORD GENUITY GROUP INC. -0.07% 13.51 Delayed Quote.20.70%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.09% 0.79685 Delayed Quote.1.86%
CAPRI HOLDINGS LIMITED 0.74% 59.9119 Delayed Quote.41.43%
CARLYLE COMMODITIES CORP. 6.67% 0.08 Delayed Quote.-40.00%
CITIGROUP INC. -0.25% 68.64 Delayed Quote.11.71%
EASYJET PLC 0.12% 827.2 Delayed Quote.-0.46%
EURO / US DOLLAR (EUR/USD) -0.26% 1.18381 Delayed Quote.-2.79%
FACEBOOK INC 2.01% 358.01 Delayed Quote.28.58%
GAMESTOP CORP. -1.86% 149.31 Delayed Quote.710.77%
HSBC HOLDINGS PLC 0.59% 400.4 Delayed Quote.5.07%
ILLINOIS TOOL WORKS INC. -0.92% 228.56 Delayed Quote.13.12%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.07% 0.013477 Delayed Quote.-1.77%
INTUIT INC. 0.38% 532.337 Delayed Quote.38.87%
JOHNSON CONTROLS INTERNATIONAL PLC -0.84% 71.78 Delayed Quote.55.16%
KOSS CORPORATION -3.17% 17.515 Delayed Quote.422.97%
LEONARDO S.P.A. 0.57% 6.674 Delayed Quote.12.28%
LONDON BRENT OIL -2.28% 70.68 Delayed Quote.41.61%
MICROSOFT CORPORATION -0.21% 286.525 Delayed Quote.29.09%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.02% 0.70451 Delayed Quote.-2.69%
NORDSTROM, INC. -0.52% 34.36 Delayed Quote.10.96%
PINDUODUO INC. 0.00%End-of-day quote.0.00%
PIPER SANDLER COMPANIES 1.55% 131.13 Delayed Quote.27.97%
PRUDENTIAL BANCORP, INC. 0.87% 13.91 Delayed Quote.-0.43%
S&P 500 -0.34% 4407.44 Delayed Quote.16.80%
S&P GSCI CRUDE OIL INDEX -2.76% 375.041 Delayed Quote.45.42%
SHAKE SHACK INC. -0.44% 92.5 Delayed Quote.9.80%
THE CARLYLE GROUP INC. 0.19% 47.95 Delayed Quote.52.32%
THE GOLDMAN SACHS GROUP, INC. -0.27% 378.82 Delayed Quote.44.23%
TRAVIS PERKINS PLC -0.21% 1692.5 Delayed Quote.13.06%
VECTURA GROUP 0.65% 154 Delayed Quote.22.79%
VIRGIN GALACTIC HOLDINGS, INC. -1.40% 30.9128 Delayed Quote.32.32%
WALMART INC. -0.47% 143.1403 Delayed Quote.-0.23%
WTI -2.83% 68.41 Delayed Quote.48.11%
ZSCALER, INC. 1.02% 245.8682 Delayed Quote.21.71%