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Dynamic quotes 
OFFON

A step closer to tapering

09/09/2021 | 09:29am EDT

Good job data and a hawkish move from the ECB are the latest signals that could lead the Fed might start tapering soon. Although the Delta variant continues to circulate and is clearly slowing the US economic momentum, central banks are looking to take advantage of the window of opportunity they will have this fall to reduce their support.

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.

 

On markets:

* 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.

 

Analyst recommendations:

  • 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

© MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. -1.02% 2835.38 Delayed Quote.61.78%
ASSA ABLOY AB -0.20% 251.5 Delayed Quote.24.20%
ATLASSIAN CORPORATION PLC -0.19% 409.69 Delayed Quote.75.18%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -0.23% 0.64326 Delayed Quote.2.01%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.24% 0.7495 Delayed Quote.-2.86%
BELDEN INC. -0.26% 60.47 Delayed Quote.44.32%
BIOMARIN PHARMACEUTICAL INC. 1.36% 75.15 Delayed Quote.-14.30%
BITCOIN (BTC/EUR) -1.74% 55714.041495 Real-time Quote.133.71%
BITCOIN (BTC/USD) -1.75% 64914 Real-time Quote.123.43%
BOOHOO GROUP PLC -0.55% 198.9 Delayed Quote.-42.01%
BRITISH POUND / EURO (GBP/EUR) -0.06% 1.18527 Delayed Quote.5.96%
BRITISH POUND / US DOLLAR (GBP/USD) -0.09% 1.38078 Delayed Quote.0.85%
CAESARS ENTERTAINMENT, INC. -0.35% 113.53 Delayed Quote.52.86%
CANACCORD GENUITY GROUP INC. 2.54% 14.14 Delayed Quote.26.70%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.01% 0.696296 Delayed Quote.8.14%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.02% 0.8106 Delayed Quote.3.06%
CIMAREX ENERGY CO. -3.11% 87.2 End-of-day quote.132.47%
CISCO SYSTEMS, INC. 0.83% 56.2 Delayed Quote.25.59%
DIAMONDBACK ENERGY, INC. 0.19% 111.15 Delayed Quote.129.65%
DRAPER ESPRIT PLC -4.95% 960 Delayed Quote.45.45%
EURO / US DOLLAR (EUR/USD) -0.02% 1.16498 Delayed Quote.-4.78%
EVERSOURCE ENERGY 0.16% 86.3 Delayed Quote.-0.24%
FORD MOTOR COMPANY 4.02% 16.04 Delayed Quote.82.48%
FRONTLINE LTD. -1.56% 9.49 Delayed Quote.54.98%
GAMESTOP CORP. -1.22% 184.52 Delayed Quote.879.41%
GOODRICH PETROLEUM CORPORATION 0.05% 20.76 Delayed Quote.105.75%
GRAINGER PLC -2.29% 307.4 Delayed Quote.8.39%
HUMANIGEN, INC. -0.15% 6.55 Delayed Quote.-62.57%
HUNTINGTON BANCSHARES INCORPORATED 2.20% 16.7 Delayed Quote.32.22%
INDIAN RUPEE / EURO (INR/EUR) -0.03% 0.011469 Delayed Quote.2.12%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.06% 0.013364 Delayed Quote.-2.75%
JPMORGAN CHASE & CO. 1.35% 170.84 Delayed Quote.32.66%
LONDON BRENT OIL -0.26% 85.58 Delayed Quote.62.71%
LULULEMON ATHLETICA INC. -0.54% 414.4 Delayed Quote.19.07%
MORGAN STANLEY -1.07% 100.66 Delayed Quote.46.88%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.13% 0.71872 Delayed Quote.-0.37%
OCWEN FINANCIAL CORPORATION 5.28% 32.9 Delayed Quote.13.80%
PURE STORAGE, INC. -0.80% 25.89 Delayed Quote.14.51%
S&P 500 0.37% 4536.19 Delayed Quote.19.45%
S&P GSCI CRUDE OIL INDEX 1.89% 456.8123 Delayed Quote.69.35%
SPECTRUM BRANDS HOLDINGS, INC. 0.20% 94.49 Delayed Quote.19.64%
SPIRE GLOBAL, INC. -0.87% 5.72 Delayed Quote.-42.86%
SURMODICS, INC. -0.47% 55.1 Delayed Quote.26.61%
T-MOBILE US 2.85% 121.94 Delayed Quote.-9.57%
THE BOSTON BEER COMPANY, INC. 0.25% 511.52 Delayed Quote.-48.55%
UBS GROUP AG 0.53% 16.02 Delayed Quote.28.47%
UNITED AIRLINES HOLDINGS, INC. -0.58% 45.95 Delayed Quote.6.24%
VERTEX PHARMACEUTICALS 0.04% 185.49 Delayed Quote.-21.52%
VERTEX, INC. 0.54% 18.56 Delayed Quote.-46.74%
WELLS FARGO & COMPANY -0.36% 50.16 Delayed Quote.66.20%
WTI -0.28% 83.332 Delayed Quote.71.11%