Wall Street's upbeat finish yesterday was largely thanks to Snowflake's great fiscal Q3 results, which melted analysts' expectations. Snowflake shares soared 24%, helping the Dow Jones Industrial Average close up 1.1% at 43,870.35. Meanwhile, the S&P 500 ticked up 0.5% to 5,948.71, and the Nasdaq Composite inched to 18,972.42.

Western equity markets finally decided to embrace optimism yesterday, taking cues from Nvidia's rollercoaster performance. The tech giant, the largest in the free world and beyond, saw its shares dip, rebound, and then settle with a modest 0.5% gain, mirroring the S&P 500. Nvidia's results and forecasts were tasked with reigniting market enthusiasm. While the numbers were impressive in absolute terms, they fell short of sky-high expectations. Eventually, investors chose to focus on the absolute, buoyed by the ongoing artificial intelligence boom. With the narrative intact, Wall Street seems poised for another ascent.

Across the Atlantic, Europe's storyline has been marred by a dearth of positive news and an abundance of negative developments. Russia's latest missile launch at Ukraine, a non-explosive warning shot, rattled nerves. Moscow had preemptively informed Washington to prevent escalation, given the missile's nuclear capabilities. This geopolitical tension sent gold and oil prices soaring, while the dollar pushed the euro to its lowest point since October 2023.

Meanwhile, bitcoin continues its audacious climb towards the USD 100,000 mark. SEC Chairman Gary Gensler, known for his cautious stance on digital assets, is set to resign on January 20, coinciding with Donald Trump's inauguration. The crypto community won't shed tears over his departure. Rumor has it that Chris Giancarlo, the former CFTC chairman affectionately dubbed "Crypto Dad," might take the helm, signaling a potential shift in regulatory tone.

In other news, China is making overtures to the USA for negotiated trade solutions. Vice Minister of Commerce Wang Shouwen emphasized the mutual benefits of stable trade relations, in a statement that was as predictable as it was diplomatic. Additionally, keep an eye on the PMI indicators, which offer insights into the economic mood across major economies.

Tokyo bounced back, recovering 0.8% after previous losses, though the Nikkei remains down 2% for the month. China, however, is struggling, with markets in Hong Kong and the mainland declining due to a lack of fresh stimulus announcements. The Hang Seng index, which surged 17.5% in September, has since lost ground, dropping 4% in October and over 5% in November. India saw a 2% rebound despite legal challenges facing the Adani group. The Indian market remains positive for 2024, but investor caution is evident. In South Korea and Taiwan, Nvidia's positive influence led to strong gains. Sydney's ASX rose 0.8%, closing the week at a record high. Europe's main indices are also up, with the Stoxx Europe 600 gaining 0.7%. Wall Street futures are treading water.

Today's economic highlights:

The November PMI indices for the major economies will be published throughout the day tomorrow. They will be completed by the University of Michigan's confidence index at 4:00 pm. Full agenda here.

The dollar is worth EUR 0.9584 and GBP 0.7985. The ounce of gold rose to USD 2,691. Oil regained some ground, with North Sea Brent at USD 73.43 a barrel and US light crude WTI at USD 69.67. The yield on 10-year US debt is slightly down to 4.39%. Bitcoin is worth USD 97,700.

In corporate news:

  • The UK Competition and Markets Authority has provisionally found issues in the mobile browser market, particularly with Apple, while the EU has closed multiple antitrust investigations into Apple's e-book and audiobook practices due to a withdrawn complaint.
  • Corporation US equities mostly rose as markets reacted to Nvidia's mixed earnings report, which showed lower than expected sales growth but strong demand for AI chips, alongside the evaluation of recent macroeconomic data.
  • Amazon is expected to undergo multiple investigations by the European Union for potentially favoring its own products on its online marketplace and violating technology regulations under the Digital Markets Act, while unrelatedly, Northvolt has filed for bankruptcy in the US, leading to significant job cuts and halted expansion plans.
  • Alphabet's Google is under pressure to sell its Chrome browser as part of antitrust measures, while facing competition from potential new entrants like OpenAI, amidst a backdrop of rising tech stocks and mixed financial reports from other major companies.
  • Intuit reported higher-than-expected revenue for the fiscal first quarter, driven by strong performances in QuickBooks and Credit Karma, and reaffirmed its 2025 guidance, although its second-quarter estimates fell short of Wall Street expectations and its shares dropped after hours.
  • Boeing has secured a $2.38 billion contract to deliver 15 additional KC-46A tankers to the U.S. Air Force and faces a review by the FAA concerning safety issues with the CFM LEAP-1B engines on 737 MAX planes following recent bird strike incidents.
  • Gap shares surged 15% premarket on Friday as the company raised its annual sales forecast following a return to growth across all brands, robust holiday demand, and third-quarter earnings and revenue that beat expectations.
  • NetApp reported a strong Q2 with earnings of $1.87 per share and revenue of $1.66 billion, both surpassing estimates, and raised its Q3 guidance to an EPS of $1.85-$1.95 on revenue of $1.61-$1.76 billion, although it forecasts FY 2025 revenue below analyst expectations with an EPS range of $7.20-$7.40.
  • Ross Stores raised its full-year earnings outlook for 2024 after reporting a third-quarter earnings beat and a revenue of $5.07 billion that missed estimates, attributing the optimistic forecast to lower costs despite challenges from soft consumer spending and execution issues.
  • Gap raised its annual sales outlook following third-quarter market share growth, while Intuit forecasted a weaker fiscal second quarter, and Matthews International exceeded expectations with its fiscal Q4 results, despite a year-over-year decline in earnings and revenue.

Analyst recommendations:

  • Abbvie Inc.: Leerink Partners upgrades to outperform from market perform with a target price of USD 206.
  • Arthur J. Gallagher & Co.: Baptista Research downgrades to underperform from hold with a target price raised from USD 298 to USD 307.
  • Bright Horizons Family Solutions Inc.: Baird upgrades to outperform from neutral with a target price of USD 140.
  • C.h. Robinson Worldwide, Inc.: Citi downgrades to neutral from buy with a price target reduced from USD 125 to USD 115.
  • Cloudflare, Inc.: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Datadog, Inc.: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Edwards Lifesciences Corporation: Baptista Research downgrades to hold from outperform with a price target reduced from USD 82.90 to USD 74.30.
  • Elastic N.v.: Baird upgrades to outperform from neutral with a price target raised from USD 95 to USD 135.
  • Flowserve Corporation: RBC Capital upgrades to outperform from sector perform with a price target raised from USD 57 to USD 69.
  • Hca Healthcare, Inc.: Raymond James downgrades to market perform from outperform.
  • Knight-Swift Transportation Holdings Inc.: Citi downgrades to neutral from sell with a price target reduced from USD 56 to USD 55.
  • Mcdonald's Corporation: Baptista Research upgrades to hold from underperform with a price target raised from USD 280 to USD 321.30.
  • Merck & Co., Inc.: Baptista Research downgrades to buy from outperform with a price target reduced from USD 140.60 to USD 134.60.
  • Palo Alto Networks, Inc.: HSBC downgrades to reduce from hold with a target price reduced from USD 304 to USD 291.
  • Rbc Bearings Incorporated: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 375.
  • Sunrun Inc.: Piper Sandler & Co downgrades to neutral from overweight with a target price reduced from USD 23 to USD 11.
  • Super Micro Computer, Inc.: Wedbush downgrades to neutral from outperform with a target price of USD 24.
  • The Timken Company: KeyBanc Capital Markets downgrades to sector weight from overweight.