The trade deficit grew to $80.73 billion in December from $79.33 billion in November, which is below the Bloomberg consensus expecting $83 million, according to Bloomberg data.

In the absence of macroeconomic data, today's session is dominated by quarterly earnings  and financial transactions such as the promise of an IPO for semiconductor design group Arm after its failed takeover by Nvidia.

The stock market landscape is globally bearish for indexes. It gives a lot of room to stocks that are discounted compared to those that are more richly valued and weigh the most in the stock market. Tech stocks are the victims of this rotation, with Meta Platforms, for example, falling by another 5%. Its valuation has been cut by a third since January 1. The ex-Facebook company dropped yesterday from 7th to 8th place in the U.S. capitalization rankings, behind Nvidia.

More generally, investors are still hesitating about what to do. This attitude is well summarized in the current strategy of Kepler Cheuvreux, which recommends that its clients remain tactically positioned in discounted stocks (value), particularly financials, energy, base metals and themes related to the post-Covid reopening, "as long as real rates remain under upward pressure". Rates are on an upward slope, as shown by the rise of the 10-year T-Bond to 1.95% this morning, not far from the symbolic 2% mark. For the record, they had ended the year 2021 around 1.51%. In parallel, the financial intermediary is tempted by a return to bolder bets. It explains that entry points are being formed "on secular growth themes", even if the compression of multiples is not yet over.

In the absence of important macroeconomic data, the day's session will still be dominated by earnings releases, such as Amgen. Softbank also published its accounts: the Japanese group took the opportunity to announce that Arm will not be sold to Nvidia but will be listed on the stock exchange.

 

Economic highlights of the day:

No major indicators today, except for the US trade balance for December.

The dollar is up 0.2% to EUR 0.8765, while gold is up to USD 1827 per ounce. Oil is down to USD 90.7 per barrel of Brent and USD 89.36 per barrel of WTI. The T-Bond now has a 10-year yield of 1.95%, up 3 points. Bitcoin is down 0.9% to 43518.

 

On markets:

* Pfizer - The U.S. drugmaker is down 3.9% in premarket trading after reporting annual sales forecasts for its COVID-19 vaccine and oral treatment for the disease that fell short of market expectations.

* Nvidia's talks to buy British chip designer Arm from Softbank failed, the three groups announced Tuesday, blaming regulatory hurdles to the deal. Nvidia's stock is down 1.3% in pre-market trading.

* Tesla - Faced with a global shortage of semiconductors, the U.S. automaker has decided to do without some electronic components in its Model 3 and Model Y cars produced in China to meet its fourth-quarter sales targets, CNBC reported Monday. In addition, Tesla said Monday that it received a subpoena from the Securities and Exchange Commission (SEC), the U.S. securities regulator, on Nov. 16 regarding tweets by its chief executive Elon Musk.

* Meta Platforms- Peter Thiel, one of the earliest investors in Facebook's parent company and a member of the company's board of directors since 2005, decided to withdraw from the group a few days after its stock market drop of nearly 30%.

* KKR - Telecommunications operator Orange is considering merging its Spanish subsidiary with MasMovil, a company owned by KKR, Cinven and Providence, Expansión newspaper reported Tuesday. Separately, KKR said Tuesday it more than doubled its fourth-quarter profit on strong asset sales from its private equity portfolio and record transaction fees from its capital markets operations.

* Fedex - The package-delivery giant is talking with Boeing and Airbus about buying new generations of cargo planes amid a boom in e-commerce, but no decision is expected before the summer because of ongoing discussions with pilots, sources close to the industry said.

* Dupont - The industrial materials group on Tuesday reported better-than-expected adjusted fourth-quarter profit and announced a 10% increase in the quarterly dividend paid to shareholders.

* Thomson Reuters reported higher fourth-quarter sales on Tuesday and announced a dividend increase and sales forecast, but operating profit was down 73% from the same period a year ago.

* Harley-Davidson on Tuesday reported a 40% jump in fourth-quarter sales on strong demand for its most expensive motorcycle models. The stock is up 8.7 percent in pre-market trading.

* Take-Two - The video game publisher said Monday it expects adjusted revenue for the current quarter to fall short of market expectations, sending the stock down 2% in premarket trading.

* Amgen - The biotech company reported quarterly sales close to expectations Monday on strong sales of a COVID-19 antibody treatment it produces for Eli Lilly and Co., but its own drug sales fell 1% due to pricing pressure.

* Raytheon Technologies, Lockheed Martin - The U.S. has approved the possible sale to Taiwan of $100 million in equipment and services designed primarily by the two groups to enable the island nation to "maintain and improve" its Patriot missile defense system, the U.S. Department of Defense announced Monday.

 

Analyst recommendations:

  • Air Products & Chemicals, Inc.: BMO Capital Markets downgrades to market perform from outperform. PT up 10% to $280.
  • BAE Systems: Jefferies starts tracking as Buy, targeting GBp 695.
  • Ceres Power: HSBC upgrades from sell to hold, targeting GBp 600.
  • First Citizens: Piper Sandler initiated coverage with a recommendation of overweight. PT up 29% to $1,000.
  • General Electric: Argus Lowers PT to $110 from $136, maintains Buy Rating
  • General Motors: Morgan Stanley downgrades to equal-weight from overweight. PT up 8.5% to $55.
  • O'Reilly Automotive: Evercore ISI lowers price target to $725 from $730, maintains outperform rating
  • Meta: KGI Securities downgrades to neutral from outperform. PT up 20% to $270.
  • M&G PLC: Morgan Stanley moves from equal-weight to Overweight, targeting GBP 270.
  • Qualcomm: DA Davidson lifts price target to $220 from $204, buy/add rating kept
  • Rolls-Royce: Jefferies starts tracking at Hold with a target of GBp 109.
  • St. James's Place: Morgan Stanley upgrades from in-line to overweight targeting GBp 1900.
  • Zimmer: Canaccord Genuity downgrades to hold from buy. PT up 12% to $125.