The Chinese economy is in a trough and economists are struggling to determine whether it will be brief or prolonged. Supply chains are still stretched to the limit and there are countless sectors that are forced to operate in fits and starts. At the same time, the fiscal consequences of the stimulus packages are beginning to be discussed again, and tax reform was passed yesterday in the UK to support the British social system. In the United States, criticism rises against Joe Biden's huge stimulus plan, at a time when the American president's grace period has come to an abrupt end with the Afghan debacle.
In short, from an economist clearly versed in the art of weather forecasting, "the horizon is still clear for vigorous global growth, but the clouds tend to accumulate, without necessarily aggregating for the moment".
It is against this backdrop that the European Central Bank is holding its first meeting of the year today. And the rumors that the ECB would be the first central bank to start reducing its asset purchase program were true. The institution said it will slightly reduce its bond purchases in the markets in the fourth quarter, adding that favorable funding conditions can be maintained with a slightly lower pace of net asset purchases under the pandemic emergency purchase program (PEPP) compared to the last two quarters.
However, it said that these purchases will continue to be made in a "flexible manner, depending on market conditions and with the aim of avoiding a tightening of financing conditions" that is incompatible with its inflation objective.
Meanwhile, it seems that the US labor market is heading towards full recovery since applications for state unemployment benefits dropped last week by the most since late June, to 310,000. This is below the 335,000 new applications forecast by a Bloomberg survey.
Economic highlights of the day:
Earlier today, China reported a sharp increase in producer prices of 9.5% in August (vs. 9.1% forecast), but annual inflation slightly lower than expected (0.8% vs. 1%).
The dollar is flat at EUR 0.8458. The ounce of gold is trading at USD 1792. Oil remains firm with Brent at USD 71.64 per barrel and WTI at USD 68.28 The US government bond yield is unchanged at 1.33% over 10 years, while the Bund yield is at -0.33%. Bitcoin has stabilized around the USD 46,500 mark.
* Ford will close its production plants in India, leading the automaker to take a $2 billion charge to its books.
* United Airlines warned Thursday that lower demand due to the impact of the Delta variant of the coronavirus on the health situation would weigh on its third-quarter revenue and capacity.
* Alphabet - Google, the company's main division, is the target of a new antitrust investigation by European authorities into suspected lobbying of electronics manufacturers using the Android operating system, an MLex reporter reported on Twitter.
* Lululemon Athletica - The athletic apparel specialist gained more than 14% in after-hours trading Wednesday, as investors hailed a better-than-consensus full-year earnings forecast after quarterly results beat expectations.
* T-Mobile US was down about 2% in after-hours trading Wednesday after JPMorgan put a block of shares on sale at a discount of up to 2.7%.
* Gamestop lost 7.3% in premarket trading Thursday after announcing a larger-than-expected quarterly loss per share despite a 25% increase in revenue and no announcement on its restructuring.
* Caesars Entertainment - The casino group is to sell the non-US operations of betting specialist William Hill to UK-based 888 for £2.2 billion (about €2.6 billion).
* Humanigen - The U.S. Food and Drug Administration (FDA) rejected the application for emergency approval of lenzilumab for the treatment of COVID-19 in hospitalized patients. The stock lost up to more than 52% in pre-market trading.
* Spectrum Brands Holdings announced on Thursday the sale of its hardware and renovation business to Sweden's Assa Abloy for $4.3 billion in cash.
- Atlassian : Baird adjusts price target to $400 from $345, keeps outperform rating
- Belden: Canaccord Genuity raised the recommendation to buy from hold. PT up 19% to $68
- BioMarin: Stifel upgrades to buy from hold. PT raised 25% to $96
- Boohoo: Credit Suisse upgrades from neutral to outperform with a GBP 350 target.
- The Boston Beer Company : UBS lowers pt to $850 from $1,080, maintains buy rating
- Cimarex Energy : Truist Securities adjusts pt to $100 from $80, maintains buy rating
- Cisco Systems: Morgan Stanley downgrades to equal-weight from overweight. PT adjusted by 0.5% to $59
- Diamondback Energy : Barclays adjusts price target to $100 from $95, keeps equalweight rating
- Draper: Jefferies upgrades from buy to hold with a target of GBp 1,200.
- Eversource: Mizuho Securities cut the recommendation to underperform from neutral. PT down 7.5% to $85
- Frontline: Pareto Securities raised the recommendation to buy from hold. PT up 32% to $10.22
- Goodrich Petroleum : Wells Fargo downgrades to hold from buy, adjusts price target to $23 from $21
- Grainger: Peel Hunt upgrades to buy targeting GBP 370.
- Hunting: Jefferies remains Buy with a reduced target price of GBP 350 to GBP 300.
- Ocwen: B Riley Securities initiated coverage of Ocwen Financial Corp. with a recommendation of buy. PT set to $50, implies a 84% increase from last price. Ocwen average PT is $39.33
- Pure Storage : Northland Securities upgrades pure storage to outperform from market perform, lifts pt to $36 from $26
- Spire Global : Baird initiates coverage on spire global with neutral rating, $12 price target
- Surmodics : Needham & Co adjusts pt to $76 from $68, maintains buy rating
- Vertex Pharmaceuticals: Stifel downgrades to hold from buy. PT up 11% to $213