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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.

Earnings season continues to deliver

10/19/2021 | 09:57am EST
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Wall Street indexes were mixed yesterday, burdened by a slowing Chinese growth, but supported by good performance from technology stocks. The S&P 500 and the Nasdaq posted gains, while the Dow Jones fell slightly due to a poor performance from the health sector and Walt Disney's production delays.

On stock markets, the hesitation phase continues, while waiting for a new series of company results, which could help investors form a more precise opinion of the dynamics at work. The technology sector once again allowed Wall Street to shine, but cyclicals also joined the party, boosted by good US consumer figures published at the end of last week.

Today, investors already received good results from Johnson & Johnson, which raised risk appetite. All three Wall Street indexes are up. After the close, the results of Netflix will be published, which everyone is talking about thanks to Squid Game.

Meanwhile, the surge in energy prices forces political leaders to make some painful backtracking. At the end of last week, Joe Biden and his inner circle reportedly organized a discreet meeting with American oil producers to discuss a strategy to reduce prices. The same ones that have not been spared by the new tenant of the White House since the beginning of his mandate. Joe Biden is consulting with shale oil and gas producers to increase their production because he has no other way to counter the abuse of dominance by Opec, the world's largest legal cartel. It is easy to imagine that the American fossil fuel industry has asked for concessions in exchange.

This episode, like the temporary removal of coal production limits in China, the return to grace of nuclear power or the handbrake brutally pulled by Brussels on the extension of the carbon market, illustrates the difficulty of aligning current policies with fundamental issues. In other words, the climate emergency disappears faster than a jar of Nutella as soon as consumers' bills start to slip.

The share price of the leading American oil company Exxon Mobil has gained 83% in one year, while the world's number one wind turbine manufacturer Iberdrola has lost 15%. This is a bit of a cliche, because over the long term, the Spanish company could be doing better than the American group, but it does show that a short-term approach can be more profitable than a long-term vision.

 

Today's economic highlights:

Few indicators today, except for the US building permits figures for September.

The dollar is down to EUR 0.8586. The precious metal is trading slightly higher at USD 1778 per ounce. On the oil market, the barrel of Brent is hovering around USD 83.76, while the WTI is trading at USD 81.9. US debt is paying 1.58% (+1 points) on 10 years, while its German counterpart is trading at -0.15% (+2 points). Bitcoin is trading above USD 62,600.

 

On markets:

* Alibaba said Tuesday it has developed a chip to power servers in its cloud data centers, the latest move by the Chinese technology giant in the semiconductor industry, a priority for Beijing.

* Johnson & Johnson raised its adjusted profit forecast for 2021 while confirming that it expects $2.5 billion in sales from COVID-19 vaccines this year. The stock gained 1.6% in pre-market trading after these announcements.

* Halliburton fell 2.4% in premarket trading after the oil and gas company reported lower-than-consensus third-quarter sales, while quarterly earnings were in line with expectations.

* Procter & Gamble dropped 2% in premarket trading after the company warned that higher raw material and freight costs could impact the company by about $2.3 billion in fiscal 2022, compared with a previous forecast of $1.9 billion.

* The World Health Organization's (WHO) program to provide poor countries with equitable access to COVID-19 products sets a goal of providing antiviral treatment at $10 per dosage for patients with a moderate form of the disease, shows a draft document seen by Reuters. The molnupiravir pill developed by U.S. pharmaceutical company Merck is likely to be one of those drugs.

* U.S. gaming and betting group DraftKings is to decide on Tuesday whether to make a formal bid to acquire Britain's Entain after rejecting an $11 billion (€9.4 billion) proposal from U.S. casino operator MGM Resorts earlier this year.

* A dozen Democratic and Republican U.S. senators formally introduced a bill Monday night to prohibit large platforms like Amazon or Alphabet subsidiary Google from favoring their products and services.

 

Analyst recommendations:

Albemarle: RBC Capital Markets raised its recommendation to outperform from sector perform. PT up 18% to $280

Apple: JP Morgan maintains its recommendation on the stock with a Buy rating. The target price is unchanged at USD 180.

Aston Martin Lagonda: Jefferies resumes tracking at Hold with a GBp 2,000 target.

Crown Castle: Credit Suisse upgrades to outperform from neutral. PT up 16% to $195

Duke Energy: JPMorgan lowers price target to $108 from $113, maintains neutral rating

EasyJet: Berenberg upgrades from hold to buy with a target of GBp 800.

Eagle Materials: Exane BNP Paribas cut the recommendation to neutral from outperform. PT up 10% to $159.50

Xcel Energy: Morgan Stanley upgrades to equal-weight from underweight. PT up 0.5% to $65

Eversource: Morgan Stanley upgrades to equal-weight from underweight. PT inches up 0.7% to $86

Goldman Sachs:  RBC Capital adjusts price target to $435 from $370, maintains sector perform rating

Hikma: Morgan Stanley upgrades its in-line weighting to Overweight with a target of GBP 2,800.

IHS Markit: BMO Capital adjusts price target to $142 from $128, maintains market perform rating

Netflix: UBS adjusts price target to $720 from $620 on rising subscriptions, keeps buy rating

Otis Worldwide: Vertical Research raises price target to $100 from $90, maintains buy rating

Pearson: Berenberg upgraded from sell to hold with a target of GBP 590.

Royal Dutch Shell: HSBC upgraded from Hold to Buy with a target of GBP 1,795.

SBA Communications: Credit Suisse upgrades to outperform from neutral. PT up 19% to $384

State Street: DA Davidson adjusts price target for state street to $104 from $91, maintains buy rating

S&P Global: BMO Capital adjusts price target to $507 from $460, maintains outperform rating

Truist Financial: Jefferies Adjusts Price Target for Truist Financial to $68 From $66, Maintains Hold Rating

UnitedHealth : Bernstein adjusts price target to $508 from $489, maintains outperform rating

Wizz Air: Berenberg upgrades from buy to hold with a target of GBP 5,200.

Zillow : Piper Sandler adjusts pt to $117 from $174, maintains overweight rating


ę MarketScreener.com 2021
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Stocks mentioned in the article
ChangeLast1st jan.
ALBEMARLE CORPORATION -3.41% 266.49 Delayed Quote.87.02%
ALIBABA GROUP HOLDING LIMITED -3.10% 127.53 Delayed Quote.-43.45%
ALPHABET INC. -2.50% 2837.95 Delayed Quote.66.07%
AMAZON.COM, INC. -1.53% 3507.07 Delayed Quote.9.35%
APPLE INC. 3.16% 165.3 Delayed Quote.20.76%
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC -1.66% 1481.5 Delayed Quote.-25.01%
CROWN CASTLE INTERNATIONAL CORP. -2.25% 181.65 Delayed Quote.16.73%
DRAFTKINGS INC. -1.85% 34.55 Delayed Quote.-24.40%
DUKE ENERGY CORPORATION -3.20% 97.01 Delayed Quote.9.46%
EAGLE MATERIALS INC. -4.25% 154.22 Delayed Quote.58.92%
EASYJET PLC -0.70% 499.1 Delayed Quote.-28.08%
ENTAIN PLC -4.41% 1669 Delayed Quote.54.04%
EVERSOURCE ENERGY -3.52% 82.27 Delayed Quote.-1.43%
GOLDMAN SACHS BDC, INC. -1.00% 18.83 Delayed Quote.-0.52%
HALLIBURTON COMPANY -2.97% 21.59 Delayed Quote.17.72%
HIKMA PHARMACEUTICALS PLC -0.27% 2224 Delayed Quote.-11.44%
IHS MARKIT LTD. -1.78% 127.82 Delayed Quote.44.86%
JOHNSON & JOHNSON -2.39% 155.93 Delayed Quote.1.16%
MERCK & CO., INC. 0.03% 74.91 Delayed Quote.-8.45%
NETFLIX, INC. -3.31% 641.9 Delayed Quote.22.77%
OTIS WORLDWIDE CORPORATION -3.80% 80.4 Delayed Quote.23.73%
PEARSON PLC -3.48% 593.2 Delayed Quote.-9.67%
PROCTER & GAMBLE COMPANY -2.98% 144.58 Delayed Quote.7.10%
ROYAL DUTCH SHELL PLC -1.45% 18.58 Real-time Quote.29.01%
S&P GLOBAL INC. -1.98% 455.73 Delayed Quote.41.43%
SBA COMMUNICATIONS CORPORATION -3.31% 343.8 Delayed Quote.26.03%
STATE STREET CORPORATION -4.53% 88.97 Delayed Quote.28.04%
TRUIST FINANCIAL CORPORATION -2.87% 59.31 Delayed Quote.27.39%
UNITEDHEALTH GROUP -1.72% 444.22 Delayed Quote.25.44%
WIZZ AIR HOLDINGS PLC 0.20% 3941 Delayed Quote.-13.83%
XCEL ENERGY -2.84% 63.73 Delayed Quote.-2.86%
ZILLOW GROUP, INC. -0.09% 54.11 Delayed Quote.-60.16%