Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

Romain Fournier

Chief Editor
Having worked in the British, French and Swiss financial press, Romain is able to report on local and international issues, as comfortable in French as in the language of Shakespeare, Romain Fournier leads the editorial team at Marketscreener. Fine connoisseur of the English-speaking markets, Romain delivers an editorial every day on US and UK markets.

Today on Wall Street: There's a bit of caution in the air

07/19/2021 | 09:54am EST
share with twitter
share with LinkedIn
share with facebook
Receive by email

It seems clear that Covid-19 didn't disappear with the summer break and it looks like a new wave is around the corner. Indices have lost ground ahead of three intense weeks that are bound to shape the second half of 2021.

The rush of corporate half-year results has started. The 2021 vintage, from July 19 to August 6, will see all major listed companies report in a short amount of time. Also within this time frame, there are monetary policy decisions from the European Central Bank on July 22 and from the Fed on July 28, and a few important macroeconomic indicators on top of that.

The next weeks are important for several reasons. On the corporate side, investors are looking to see if the promised earnings boom will materialize. There is no longer a consensus on this point, largely because of a pandemic that is far from under control. It’s very likely that we'll quickly get back to talking about what is culturally, economically and politically acceptable. This debate had taken a back seat in the first half of the year, as we had returned to the binary thinking of vaccination and the end of restrictions. As is often the case, the reality is more complex. Governments now know that immunity targets will be difficult to reach, given the lack of confidence in vaccination, so they will start thinking in terms of the capacity of their health systems to cope with the pandemic. In such a context, the framework for a long and unbridled recovery is less clear. The updated business outlook will tell us a bit more about their confidence and the scenarios they have constructed for the rest of the year and beyond.

Another hot topic is monetary policy. Some central banks are starting to set new, more sober policy targets. This has been the case since mid-June in the US. It has been latent in the UK. The ECB has set a new inflation target but is not as advanced as its peers. The resurgence of coronavirus around the world, and particularly in Europe, may force the central bank to maintain a dovish rather than a hawkish policy. But the orthodox faction of the ECB, whose leaders are usually the German and Dutch representatives, is likely to lash out. This mismatch between the monetary policies of major central banks is a source of distortion and confusion for markets.

Business results and monetary policies are accompanied by a few other significant events, as I wrote above before getting lost in the pandemic-monetary reflections. First, Opec+ reached an agreement to increase production without clashing, and will continue the pumping control agreement until the end of 2022. Oil prices were under pressure since last week because of a less flamboyant economic outlook than expected and the environmental offensive of the European Commission. They remain bearish after the announcement of the Opec+, which formalizes a production slightly higher in the medium term than what was envisaged. At the end of the week, we should also keep an eye on July's Flash PMI indicators, which are good barometers of business morale since they survey purchasing managers. The following week, the US, German and French GDPs for the second quarter will be published.

Finally, there will be quite a few emblematic corporate earnings reports this week. In particular BlackRock, International Business Machine, Netflix, Johnson & Johnson, ASML, The Coca-Cola Company, Microsoft, SAP, Novartis, Roche and Unilever.


Economic highlights of the day:

The July house price index compiled by the US NAHB is the main indicator today.

The dollar is trading at EUR 0.8461. The ounce of gold lost some height at USD 1811. In the oil market, the agreement reached by Opec+ pushed Brent down to USD 70.98 USD and WTI to USD 69.0 The yield on US debt falls to 1.28% on 10 years. Bitcoin is trading around USD 30,600.


On markets:

* Zoom Video Communications announced Sunday that it has reached an agreement to buy cloud software provider FIVE9 in a deal valued at about $14.7 billion (€12.5 billion). Five9 stock gained 8.4% in pre-market trading and Zoom gave up 2%.

* Pershing Square Tontine Holdings announced on Monday that it would not pursue the acquisition of a 10% stake in Universal Music Group (UMG) from Vivendi, with the deal now to be led by U.S. billionaire William Ackman's investment fund.

* Autodesk - The U.S. software company announced Monday that it has ended negotiations to buy its Australian competitor Altium a few weeks after the latter rejected an offer of 5.5 billion Australian dollars.

* Johnson & Johnson is considering placing its disputed assets, such as its talcum powder products, into a new entity that could later seek bankruptcy protection, according to seven sources close to the matter. The U.S. conglomerate's stock is down 0.7% in premarket trading.

* Alibaba and Baidu - China's two largest Wall Street-listed companies are each down 2.1% in premarket trading, hurt by fears of a Chinese government anti-monopoly ruling against technology giants.

* International Business Machines (IBM) released its second quarter results on Monday after the close of the U.S. markets.


Analyst recommendations:

GlaxoSmithKline: Barclays maintains its Sell rating on the stock. Previously set at GBp 1250, the target price has been raised to GBp 1300.

International Consolidated Airlines Group: Bestinver Securities initiates coverage with a recommendation of buy. PT up 32% to 210.41 pence

Qualcomm: Goldman Sachs raised its recommendation to neutral from sell. PT raised by 5.9% to $148

Rio Tinto: J.P. Morgan remains Overweight with a target cut from GBP 8310 to GBP 8250.

State Street: DA Davidson adjusts price target to $91 from $89, buy/add rating kept

Tate & Lyle: Jefferies remains Buy with a price target raised from GBP 850 to GBP 880.

Trainline: Berenberg remains Buy with a price target reduced from GBp 520 to GBp 350 .

Travis Perkins: J.P. Morgan upgrades to overweight from neutral. PT up 20% to 2,000 pence.

Virgin Money UK: Investec raised to buy from hold. PT raised 11% to 205 pence.

Yara: Berenberg remains Hold with a price target raised from GBp 465 to GBp 480.


ę MarketScreener.com 2021
share with twitter
share with LinkedIn
share with facebook
Receive by email
Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED -7.59% 112.7786 Delayed Quote.-47.37%
ASML HOLDING N.V. -1.38% 681.2 Real-time Quote.73.74%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -1.28% 0.6186 Delayed Quote.-0.32%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -1.13% 0.70061 Delayed Quote.-7.63%
AUTODESK, INC. -0.47% 256.1472 Delayed Quote.-15.62%
BAIDU, INC. -8.28% 136.73 Delayed Quote.-31.11%
BARCLAYS PLC -0.31% 186.66 Delayed Quote.27.65%
BITCOIN (BTC/EUR) -4.41% 47821.39 Real-time Quote.112.12%
BITCOIN (BTC/USD) -4.43% 54017.7 Real-time Quote.97.90%
BRITISH POUND / EURO (GBP/EUR) -0.58% 1.1694 Delayed Quote.4.82%
BRITISH POUND / US DOLLAR (GBP/USD) -0.40% 1.32457 Delayed Quote.-2.90%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.20% 0.688667 Delayed Quote.7.15%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.04% 0.7792 Delayed Quote.-0.62%
EURO / US DOLLAR (EUR/USD) 0.17% 1.13226 Delayed Quote.-7.33%
FIVE9, INC. -6.08% 128.375 Delayed Quote.-20.96%
GLAXOSMITHKLINE PLC 0.04% 1534.6 Delayed Quote.14.31%
INDIAN RUPEE / EURO (INR/EUR) -0.53% 0.011737 Delayed Quote.5.07%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.31% 0.013298 Delayed Quote.-2.61%
INVESTEC GROUP -1.35% 80.1 End-of-day quote.118.61%
JOHNSON & JOHNSON 0.87% 158.535 Delayed Quote.-0.18%
LONDON BRENT OIL -0.94% 69.8 Delayed Quote.33.23%
MICROSOFT CORPORATION -2.96% 319.69 Delayed Quote.48.14%
NETFLIX, INC. -2.66% 599.88 Delayed Quote.14.01%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.79% 0.67556 Delayed Quote.-5.13%
NOVARTIS AG -0.31% 73.57 Delayed Quote.-11.78%
PERSHING SQUARE HOLDINGS, LTD. -0.64% 38.7 Real-time Quote.11.29%
PERSHING SQUARE TONTINE HOLDINGS, LTD. -0.15% 20.03 Delayed Quote.-27.67%
QUALCOMM, INC. -0.66% 175.755 Delayed Quote.16.21%
RIO TINTO PLC -3.07% 4576 Delayed Quote.-13.69%
S&P 500 -1.50% 4507.42 Delayed Quote.20.15%
S&P GSCI CRUDE OIL INDEX -2.24% 363.8056 Delayed Quote.37.26%
STATE STREET CORPORATION -2.48% 90.02 Delayed Quote.21.76%
TATE & LYLE PLC 0.60% 635.6 Delayed Quote.-6.32%
TRAINLINE PLC -1.80% 272.6 Delayed Quote.-40.17%
TRAVIS PERKINS PLC 1.68% 1517 Delayed Quote.-1.15%
UNILEVER PLC 0.18% 3879 Delayed Quote.-11.84%
UNIVERSAL MUSIC GROUP N.V. -2.44% 24.785 Real-time Quote.0.00%
US DOLLAR / EURO (USD/EUR) -0.15% 0.883189 Delayed Quote.7.91%
VIRGIN MONEY UK PLC -0.88% 168.8 Delayed Quote.26.62%
VIVENDI SE 0.09% 11.25 Real-time Quote.-57.39%
WTI -1.67% 66.201 Delayed Quote.37.48%
YARA INTERNATIONAL ASA 1.68% 441.9 Real-time Quote.22.08%
ZOOM VIDEO COMMUNICATIONS, INC. -3.74% 184.26 Delayed Quote.-41.39%