Financial markets like to abuse paradoxes, contradictions and other lack of verisimilitude, which nonetheless take on a relative form of rationality (another paradox, you might say!). In yesterday's case, the slide in the Philly Fed's manufacturing index (at 31.5 points, it was at 50.2 in April) mitigates the risks of an overheating US economy, as well as the fears of high inflation that go with it, so the Federal Reserve is unlikely to tighten monetary policy quickly. In other words, bad news is always good news and this is good news for equity investors, who are extremely wary of seeing the Fed reduce its asset purchases in the near future.
The S&P500 rose 1.06% to 4,159 points, a wind of optimism that also benefited technology stocks, as did the Nasdaq, which gained 2% daily. Only banking stocks and oil companies have been left behind, but we will talk about this a little further down.
Let's talk about crypto-currencies, which did not fail to their reputation as yesterday's rebound was explosive. After their express crash the day before, bitcoin and ethereum recorded double-digit positive swings during the session, reminding us that it's important to have a strong heart and, above all, to remain reasonable when investing in cryptoassets. Roughly summarized, everything went up, aside from oil, which acted as an interloper by stringing together its third down session yesterday, despite a weakening greenback.
Behind the scenes, talks between the International Atomic Energy Agency (IAEA), an organization under the aegis of the United Nations, and Tehran on the subject of Iranian nuclear power are being played out. Negotiators are optimistic about getting Iran and the United States back to the negotiating table and thus reviving the 2015 deal, which Donald Trump buried in 2018. A consensus would pave the way for a lifting of the sanctions reinstated by the former US president and consequently for Iran's comeback on oil markets. The Islamic Republic could increase its exports by just over a million barrels a day, raising concerns about the market's ability to absorb this excess supply.
Today's economic highlights:
The May PMI indicators are being published throughout the day, notably for France, Germany, the euro zone, the UK and the US. April housing figures are also scheduled.
The EUR/USD pair is stable at USD 1.223. The ounce of gold is trading at USD 1876. Oil is trading at the lowest of the week at USD 65 for Brent and USD 62 for WTI. The US government bond yield stands at 1.63% over 10 years. Bitcoin, we talked about, is trading above USD 40,000.
* Deere & Co on Friday raised its full-year profit forecast after seeing its profit jump 169% in the first quarter, as the recovery of the global economy boosted demand for its agricultural and construction equipment. The stock is up 1% in pre-market trading.
* Foot Locker - The sporting goods retailer gained more than 4% in premarket trading after reporting quarterly sales and earnings above the IBES consensus by Refinitiv.
* McDonald's - Two companies owned by businessman Byron Allen are seeking at least $10 billion (€8.2 billion) from the fast-food company for racial discrimination, accusing it of limiting its advertising investments in black-owned media.
* Tesla- Employees of several Chinese government agencies that own Tesla have been instructed to stop parking their vehicles on the premises of their workplaces for security reasons related to the presence of cameras in the vehicles, two sources close to the case said.
* Applied Materials - The semiconductor manufacturing equipment specialist said Thursday night it expects third-quarter sales to beat Wall Street expectations. The stock was still giving up nearly 1% in after-hours trading; it had finished the session on the Nasdaq up 4%.
- Airbus: AlphaValue remains Buy with a price target reduced from EUR 110.40 to EUR 104.
- Cisco : Oppenheimer adjusts PT to $55 From $50, maintains Outperform rating
- easyJet: Berenberg remains long with a target price raised from GBP 960 to GBP 1000.
- GDS : Nomura adjusts Price Target to $102 From $118, keeps Buy rating
- JD.COM : JPMorgan lowers PT to $90 From $105, maintains Overweight rating
- Hargreaves Lansdown: Citigroup changes from neutral to sell, targeting GBp1560.
- L Brands : UBS increases Price Target to $102 From $96; stays Buy
- Mattel : UBS Price Target down to $25 From $22, maintains Buy rating
- PPG Industries : Royal Bank of Canada lifts PT on PPG Industries to $193 From $180, maintains Overweight rating
- Salesforce: Goldman Sachs retains his positive opinion on the stock with a Buy rating. The target price is still set at USD 315.
- Travis Perkins: Morgan Stanley resumes its Overweight rating with a target of GBp 2,000.