The Federal Housing Finance Agency House Price Index for March is due today. Economists are forecasting an increase of 1.9% for March, compared with a 2.1% increase in February. Also today, President Joe Biden will meet with Fed Chair Jerome Powell to discuss inflation. 

In other news, the EU has finally agreed on a form of embargo on Russian oil, and it was not easy task. They reached a compromise, with some adjustments for Hungary and other countries ultra-dependent on energy supplies from Moscow. "Instead of targeting all Russian crude oil imports, the EU will ban Russian crude oil imports by sea over the next six months," ING points out, which could represent two-thirds of the volumes. But as Germany and Poland have announced their decision to reduce to zero their purchases via the pipeline that supplies them, this could concern about 90% of imports by the beginning of 2023. The aim is to increase the pressure on Russian finances. The barrel logically reacted upwards, but part of the news was already in the prices, so there was no explosion. Brent is still above USD 119, which will not help our energy bills.

There are some good news from China, with the reduction in the number of coronavirus infections in the country. Given China's importance on the global production stage, any improvement is good for reducing the disruption to supply chains. Secondly, the publication of a less deteriorated than expected manufacturing PMI indicator in April. The official purchasing managers' index rose more than 2 points to 49.6. This is above the average expectation of economists (49). While this indicator needs to be above 50 points to signal a positive economic phase, it has recovered in the right direction, which investors will be sensitive to.

 

Today's economic highlights:

Three important indicators today, May inflation in the Eurozone, US house prices and the Conference Board's US consumer confidence index. This morning, Japan announced a -1.3% contraction in industrial production in April, while the consensus was for -0.2%.

The dollar is up 0.7% to 0.9351. The ounce of gold is down a few dollars at USD 1849. North Sea Brent crude is trading at USD 119.89 per barrel and U.S. light crude WTI at USD 119.35. The yield on 10-year U.S. debt rises to 2.84%. Bitcoin is up to USD 31,700.

 

On markets:

* The Boeing Company - Norwegian Air announced Monday that it has placed an order for 50 737 MAX aircraft and an option for an additional 30 aircraft for an unspecified amount.

* Apple - The Taiwanese group Foxconn, one of the main subcontractors of the iPhone manufacturer, said Tuesday that the outlook for the second half of this year was "moving in the right direction" with the announced lifting of the lockdown in Shanghai. The stock is down 0.5% in pre-market trading.

* U.S. Airlines canceled more than 2,500 flights in total over the extended Memorial Day weekend due to weather disruptions but also labor problems. Delta Air Lines alone canceled about 700 flights over the past four days, according to FlightAware.

 

Analyst recommendations:

American Eagle: Morgan Stanley downgrades to underweight from equal-weight. PT down 39% to $8.

Atome Energy Plc: Liberum starts tracking as Buy, targeting GBp 181.

Bill.com: KeyBanc adjusts price target on bill.com holdings to $175 from $225, reiterates overweight rating.

Eastman Chemical: Credit Suisse initiated coverage with a recommendation of outperform. PT up 19% to $130.

FMC Corp: Credit Suisse reinstated coverage with a recommendation of underperform. PT down 13% to $109.

International Consolidated Airlines: Morgan Stanley moves from overweight to in-line weighting, targeting GBp 144.89.

Linde: Credit Suisse initiated coverage with a recommendation of outperform. PT up 15% to $380.

Mercury Systems: Credit Suisse reinstated coverage with a recommendation of underperform. PT down 12% to $115.

NuStar Energy: Wells Fargo Securities upgrades to overweight from equal-weight. PT up 12% to $18.

PPG Industries: Credit Suisse reinstated coverage with a recommendation of underperform. PT down 12% to $115.

The Sherwin-Williams Co: Credit Suisse reinstated coverage with a recommendation of underperform. PT down 11% to $245.

Steel Dynamics: Goldman Sachs downgrades to neutral from buy. PT up 4.8% to $92.