Excluding volatile food and energy prices, the core CPI rose 3% year-on-year and 0.9% on a monthly basis. Markets remain calm as investors have been reassured by the Fed that it would not change its accommodative policy anytime soon and that this inflation surge should be transitory.
Meanwhile, Biden's $6 trillion budget is expected today and could help support stocks most linked to the economic recovery. These cyclical stocks, which have been suffering from a slight slump for several sessions, have already woken up. The plan will include promises made for infrastructure and basic public services. The additional funding needed is expected to come from higher taxes on corporations and wealthier households.
Financial markets were still moving within narrow limits yesterday. And in a nice sectoral jumble that seems to be the common denominator of the month of May, financial stocks shone, as well as industrials, after having been a little heckled. General Motors has reopened several production lines that had been frozen due to semiconductor shortages. This announcement benefited the entire ecosystem, which saw it as a sign of a reduction in this major bottleneck. GM's boss, Mary Barra, did not get carried away, reminding us that the second quarter will be the weakest of the year in terms of production. But the market considered the signal positive, as it appreciated rival Ford's ambitions in the electric vehicle. The news is benefiting automakers, whose shares had tumbled to a 2021 low in mid-May.
Economic highlights of the day:
On the agenda, the May business confidence index in the euro zone, U.S. April Household Income & Spending, PCE Inflation and Wholesale Inventories, the May Chicago PMI, and the May University of Michigan Consumer Confidence Index.
The dollar/euro pair is little changed at EUR 0.8227. The ounce of gold is down slightly at USD 1890. Oil is stable at USD 69.55per barrel of Brent and USD 67.29 per barrel of WTI. US debt yields rise slightly to 1.61% over 10 years. Bitcoin is trading down around USD 35,000.
* The Boeing Company has suspended deliveries of its 787 Dreamliner after the U.S. Federal Aviation Administration (FAA) requested new information on the company's proposed solutions to previously reported production problems, the Wall Street Journal reported Friday. The stock is losing 1.3% in pre-market trading.
* Google is close to an out-of-court settlement with French authorities on charges of abusing its dominant position in the online advertising market, the Wall Street Journal reported Thursday, citing people familiar with the matter.
* Salesforce raised its full-year revenue and profit forecasts after quarterly results showed better-than-expected revenue on increased demand for its cloud software. The stock gained 4.9% in pre-market trading.
* Johnson & Johnson and the U.S. Food and Drug Administration are expected to announce later today that production of COVID-19 vaccine at the Baltimore facility can resume. In April, an inspection concluded that there were significant quality control and sanitation failures, the Wall Street Journal reported Thursday.
* Dell was down 1% Thursday in after-hours trading and HP was down 5.3% in pre-market trading. Both groups warned that the semiconductor shortage could impact their businesses.
* Costco Wholesale - The retailer reported quarterly sales Thursday that beat analysts' forecasts and said it was optimistic about demand for high-margin items like jewelry and furniture.
* Gamestop and AMC Entertainment jumped 4.1% and 21.8%, respectively, in pre-market trading. Both stocks have been the subject of a stock market battle between retail investors and short sellers for several months. The value of AMC stock has doubled this week.
- Abercrombie & Fitch : Telsey Advisory changes Price Target to $55 from $48, keeps Outperform rating
- Airbus: J.P. Morgan remains Overweight with a price target raised from EUR 115 to EUR 138.
- American Eagle Outfitters : Wedbush lifts PT to $58 from $45 , maintains Outperform rating
- Best Buy : Jefferies raises Price Target to $136 from $125, maintains Buy rating
- Boston Omaha : Wells Fargo raises PT to $35 From $28, maintains Overweight rating
- CMC Markets: Goldman Sachs reiterates Neutral rating with a target of GBp 410.
- easyJet: Berenberg is keeping its Neutral rating. The target price is unchanged and still at GBp 1000.
- Fedex: Berenberg research considers the stock attractive and recommends it with a Buy rating. The target price remains set at USD 350.
- Ford Motor : Morgan Stanley adjusts PT to $11 From $9, maintains Underweight rating
- International Consolidated Airlines Group (IAG): Berenberg retains his positive opinion on the stock with a Buy rating. The target price is unchanged at GBp 230.
- Porsche: Goldman Sachs remains Buy with a target price raised from EUR 128 to EUR 134.
- Ryanair: Berenberg retains his positive opinion on the stock with a Buy rating. The target price continues to be set at EUR 20.
- Salesforce: JP Morgan keeps a Buy rating. The target price continues to be set at USD 250.
- Medtronic : Piper Sandler lifts PT to $140 From $130, maintains Overweight rating
- National Grid: Credit Suisse maintains its Buy rating on the stock. The target price is reviewed upwards from GBp 1020 to GBp 1075.
- Tate & Lyle: Jefferies remains Buy with a price target raised from GBp 790 to 850.
- Snowflake : Loop Capital lowers PT to $250 from $270, maintains Hold rating
- United Parcel Service Berenberg's research confirms its advice and maintains his neutral opinion on the stock. The target price remains set at USD 150.
- Vodafone: Goldman Sachs is keeping its Buy rating. The target price is unchanged and still at GBp 180.