Futures on all three Wall Street indexes were up today, although stock markets are having some difficulty finding new bullish catalysts, after a very favorable first half of 2021. This situation is fueled by the sum of the annoyances that, when put together, are weighing on general sentiment. There is the omnipresence of coronavirus, when the summer of 2021 was touted as the beginning of a true normalization. There is China, which is tormenting its technological champions that prefer to get listed with the American rival. There are global industries that cannot fully recover because of multiple shortages. Yesterday, there was the EU's offensive against the internal combustion engine, the consequences of which are far more serious than many think. These adverse signals come on top of earlier concerns about inflation and monetary policy.
And then there are the quarterly corporate results coming up in the July 15/July 31 window, which will likely be the determinant of the month's stock market performance, barring any unforeseen events. Expectations are very high, as analysts have assumed a V-shaped recovery.
Overall market sentiment matters, especially during earnings season. We all know the feeling when your favorite company posts strong results, with sweet valuation ratios and a booming outlook, but yet its price drops on stock markets. Then you read comments such as "the results were good, but analysts were hoping for a little better cash flow generation" or "such and such a research firm has estimated that the outlook for such and such a subsidiary is a little worrying"…
Meanwhile, , the Commerce Department said today that retail sales bounced back 0.6% last month, after falling 1.7% in May. Economists polled by Reuters had forecast a 0.4% drop.
Today's economic highlights
The second estimate of European inflation, June retail sales, May wholesale inventories and the University of Michigan's consumer confidence index for July are released today. Earlier today, the Bank of Japan left rates unchanged, as expected, while revising its 2021 growth forecast downward and its 2022 forecast upward.
The dollar is trading at EUR 0.8471. The ounce of gold remains firm in the area of USD 1825. Oil is recovering slightly after its recent consolidation, with Brent crude trading at USD 73.62 per barrel and WTI at USD 71.83 per barrel. The yield on U.S. debt is back down to 1.32% on the 10-year. Bitcoin is trading just below USD 32,000.
* Intel is in talks to buy GlobalFoundries, a major semiconductor producer, for about $30 billion (€25.4 billion), The Wall Street Journal reported Thursday, citing sources close to the matter. In pre-market trading, Intel gained 0.9%.
* The Boeing Company - The U.S. Federal Aviation Administration (FAA) issued a directive Thursday requiring airlines using Boeing's 737 series to conduct inspections to ensure that the aircraft do not have a defect in the cabin pressurization controls.
* Moderna will enter the S&P-500 Index on July 21, taking the place of ALEXION PHARMACEUTICALS being acquired by AstraZeneca. Moderna stock is up nearly 8% in pre-market trading.
* Tesla - Tesla's vehicle registrations in California rose more than 85% in the second quarter thanks in large part to the success of the Model Y, according to data collected by research firm Cross-Sell.
* AT&T is up slightly in pre-market trading after announcing the loss of 473,000 subscribers to its premium video services in the second quarter, up from 887,000 in the same period last year.
* Pfizer will pay $345 million to settle consumer claims that it overpaid for EpiPen, a device for the emergency treatment of allergic reactions, because of the company's anti-competitive and unfair practices.
* Didi - Several Chinese regulatory agencies and ministries have sent inspectors to Didi's offices to conduct a cybersecurity audit of the VTC giant, the Cyberspace Administration of China announced Friday. Didi shares fall 6.3% in pre-market trading.
* Verizon and Ericsson have reached an $8.3 billion (seven billion euro) agreement to accelerate the rollout of the 5G network in the U.S., the Swedish telecom equipment group announced Friday.
* General Motors - The automaker's joint venture in China will recall 1.44 million vehicles under the Wuling and Baojun brands due to an engine problem, the Chinese market regulator announced Friday.
* Brookfield Infrastructure Partners has raised its hostile takeover bid for Inter Pipeline for the second time, to about C$8.58 billion, while the Canadian oil infrastructure operator is also being coveted by rival Pembina Pipeline. (Written by Laetitia Volga and Marc Angrand, edited by Jean-Michel Bélot)
- Asos: RBC remains Outperform with a price target reduced from GBp 7500 to GBp 7300
- BlackRock : JPMorgan adjusts pt to $1029 from $959, maintains overweight rating
- Cintas: Baird upgrades to outperform from neutral. PT set to $425, up 15%
- Cummins: Cowen raises to outperform from market perform. PT set to $284, up 18%
- GATX Corp: Cowen upgrades to outperform from market perform. PT set to $101,up 15%
- GP Strategies : Barrington Research downgrades to market perform from outperform
- Hammerson: HSBC upgrades from light to hold, targeting GBp 38.
- Ocado: Berenberg remains Hold with target reduced to GBP 2120 from GBP 2390.
- Prologis : Morgan Stanley adjusts price target to $131 from $120, keeps overweight rating
- US Bancorp : Wedbush adjusts price target to $64 from $61, maintains neutral rating
- Victrex: Jefferies remains Buy with target price raised from GBp 2,725 to 2,975.
- Wells Fargo & Company : BMO Capital adjusts pt to $43 from $45, maintains market perform rating
- Whitbread: Peel Hunt upgrades to buy from add. PT set to 3,600 pence, up 25%
- Williams-Sonoma: Exane BNP Paribas initiates coverage at neutral. PT set to $179, up 13%
- Zoetis: Raymond James downgrades to market perform from outperform.
- Zscaler : Canaccord Genuity lifts pt to $300 from $250, maintains buy rating