The core personal consumption expenditure price index, often touted as the Fed’s preferred gauge to measure inflation, was in line with expectations, which reassured investors that the Fed would not turn too hawkish. It gained 0.5% for the month of December, as forecast by economists. Overall, inflation accelerated 4.9% year-on-year in December, the biggest rise since 1983.
Will this be enough to reverse the course of indexes? Since January 1, the Nasdaq 100 has lost 13% and the S&P500 8.7%. Yesterday, Wall Street lost more ground, especially the Nasdaq 100, which will have to work hard today if it wants to catch up with its weekly deficit of 3%. The week before, the Nasdaq 100 lost 7.5%. This index is the bellwether of US stock market, and its stars also weigh heavily in the broader S&P500 index. And in this respect, yesterday's session was very instructive. The technology index gave back 1.2%, with two big leaders in this contraction, Tesla (which sank by 11.5% after announcing that it was not immune to component shortages) and Nvidia (-3.6% because the star of the fall 2021 no longer looks like a must-have). I can add the entire semiconductor segment, including Intel and Advanced Micro Devices, which fell 7% but weigh less than the two aforementioned players.
On the other hand, the aristocrats of the index were not swept away this time. Microsoft gained ground and Apple and Google finished almost flat. The results of the owner of Windows were reassuring, as were Apple's results last night after the close.
As you may have noticed, the Fed didn't provide much reassurance on Wednesday. Economists generally took note of a rather soft written communication from the institution, but a more conservative and tighter tone from its chairman Jerome Powell in the press conference that followed. "They know they're behind, and in response they're announcing that they're going to go ahead and do what's necessary and still have plenty of room to act aggressively. But not for six weeks on rates and 18 weeks before they start to reduce the balance sheet," summarizes Steven Blitz of TS Lombard. This gives investors a little more time to prepare.
Meanwhile, corporate results continue to offer some guarantees. After the modern stars yesterday, the old economy is back to close the week, with Chevron and Caterpillar.
Economic highlights of the day:
The US consumer is in the spotlight with the December US household income and spending figure and the January University of Michigan consumer confidence index are on the agenda today. This morning, France reported a higher-than-expected 0.7% quarterly growth in Q4, bringing GDP growth to 7.0% year-over-year.
The dollar is down to 0.8964. The ounce of gold fell back below the USD 1,800 mark to 1788. Oil consolidated at high levels, with Brent crude at USD 90.95 and WTI at USD 88.27. US debt yields are down to 1.82% over 10 years. Bitcoin is stabilizing around USD 37,080.
* Apple on Thursday reported better-than-expected revenue and net income for the October-December quarter last year, as strong iPhone sales, particularly in China, more than offset supply chain challenges. The stock gained 4% in pre-market trading.
* Caterpillar warned that its operating margin for the current quarter could be hurt by higher production and labor costs, sending the stock down 1.6% in pre-market trading.
* Chevron reported a lower-than-expected fourth-quarter profit on Friday, despite strong growth in oil and gas prices. The stock lost 3% in premarket trading.
* Philips 66 - The refining company posted a fourth-quarter profit, compared with a loss in the same period in 2020, thanks to a rebound in demand.
* Visa reported a better-than-expected quarterly profit on Thursday, as increased travel and online shopping drove higher spending volumes. The global payment card giant is up 4.6 percent in pre-market trading.
* Mondelez International said Thursday that supply chain issues are expected to have a greater impact this quarter on its North American business after it reported a 37% drop in gross margin in the fourth quarter. The stock is down 3.5% in pre-market trading.
* VF Corp, owner of the Vans brand, lowered its annual sales forecast due to delivery delays and labor shortages at its Vietnamese factories.
* Biogen announced Friday that it will sell its entire stake in Samsung Bioepis to Samsung Biologics for 2.8 trillion won.
* 3M Company should pay $110 million to two U.S. military veterans who claimed that the company's earplugs caused them hearing damage, the courts said Thursday.
* Western Digital - The U.S. technology company fell 12.8% in premarket trading after reporting a third-quarter revenue forecast that fell short of market expectations.
* Citigroup to sell its Taiwan retail business to BS Group for S$956 million.
* Alphabet - Google announced Friday that it will invest up to $1 billion in Indian telecom operator Bharti Airtel.
* The Home Depot announced Thursday the appointment of Edward Ted Decker as chief executive officer in place of Craig Menear, who will remain president.
* Robinhood - The online brokerage reported Thursday a net loss of $423 million in the last three months of 2021, compared with a profit in the same period a year earlier. The stock fell 14.6 percent in pre-market trading.
Associated British Foods: Goldman Sachs downgrades from neutral to sell targeting GBp 2060.
AT&T: UBS adjusts PT to $32 from $34, maintains Buy rating
CarMax: Citic Securities initiated coverage with a recommendation of buy. PT set to $130.
Corning: UBS adjusts PT to $49 from $51, maintains Buy rating
Crown Castle: Raymond James upgrades to outperform from market perform. PT up 7.2% to $184.
Electronic Arts: KeyBanc adjusts Electronic Arts' PT to $165 from $180, reiterates Overweight rating.
General Electric: DZ Bank adjusts PT for General Electric to $125 from $135, maintains Buy rating
Intel: UBS adjusts Intel's PT to $53 from $58, maintains Neutral rating
Kimberly-Clark: Goldman Sachs lowers PT to $130 from $142, maintains Neutral rating
Las Vegas Sands: Stifel adjusts PT to $56 from $51, maintains Buy rating
Nasdaq 100: Morgan Stanley lowers Nasdaq's PT to $238 from $252, maintains Overweight rating
Polymetal: Ehrenberg remains Buy with a price target reduced from GBp 2200 to GBp 1500.
ResMed: RBC Capital Markets raised the recommendation to sector perform from underperform.PT up 7.2% to $241
Teradyne: Deutsche Bank downgrades to hold from buy. PT up 7.9% to $120
The Boeing Company: Goldman Sachs raises PT to $307 from $300, maintains Buy rating
Truist Financial: Stephens Raises Price Target for Truist Financial to $75 From $73.50, Maintains Overweight Rating
Verizon Communications: DZ Bank lowers PT to $55 From $58, maintains Hold rating
YouGov: Peel Hunt upgrades to buy from add. PT up 29% to 1,630 pence