Markets fell Austria announced a full lockdown to try to stop the spread of a new Covid wave. Germany said that it could not rule out doing the same.
Technically, today is the last day of the trading month. By convention, it is the third Friday of each month that derivatives such as index futures and options on expiring stock market products are unwound. This session, dubbed "Three Witches Day", can be a source of some volatility, often limited to movements that are mostly visible to insiders.
After Nvidia's prowess yesterday, the semiconductor sector could be shaken by the counter-example Applied Materials, whose share price is floundering after disappointing results. Management explained that its own supply chain is struggling to keep pace with intense demand for microchips. The industry has problems, and it is affecting markets’ expectations, which are high. Another stock market victim of the day, after half and half results, is Alibaba, the Chinese Amazon, which sank by 11% yesterday and is still falling in Hong Kong, which is weighing down the Hang Seng weekend.
On the geopolitical front, the latest statements from the White House towards China seemed rather calming in the wake of the videoconference held between Joe Biden and Xi Jinping earlier this week. But the American president said yesterday that the United States is considering a diplomatic boycott of the Beijing Winter Olympics, which are to take place in February. There will be no major economic statistics today.
In other news, Standard & Poor's is trying to capture a current trend, the weight of social networks. It is releasing the "S&P500 Twitter Sentiment Index", based on an algorithm that measures the bullish and bearish sentiment on each stock of the US S&P500 based on tweets containing a cashtag (since 2012, the use of the $ tag allows tweets to be placed in the financial category). The index keeps only the top 200 rated companies. Scores are calculated in real time but the composition is only reviewed once a month. In order to get the most out of the Twittosphere's sentiment, S&P also offers an equally weighted version of its index, which includes only the 50 best companies (S&P 500 Twitter Sentiment Select Equal Weight Index). Does positioning yourself on such an index allow you to do excellent business? Let's start with a backtest provided by S&P over three years: the S&P500 Twitter index has gained 20.55% on an annualized basis compared to 19.80% for the S&P500.
Economic highlights of the day:
No major macroeconomic indicators are in sight today.
The dollar is up to EUR 0.8858. Gold is holding down to USD 1859 per ounce. Oil drops to USD 79.00 a barrel of Brent and USD 76.2 a barrel of WTI. The T-Bond yield rises to 1.59% on 10-year, while the German Bund yield eases to -0.28%. Bitcoin continues its decline towards USD 57,917.
* Apple is stepping up efforts to launch an electric vehicle as early as 2025 and has refocused the project around features that enable fully autonomous driving, Bloomberg reported Thursday night, citing sources close to the matter. The stock ended up nearly 3% after the news was released. Wedbush expressed confidence in the project on Friday, estimating that the planned vehicle would soon see the light of day and that it would represent a potential of more than 30 dollars per share over the next few years.
* Pfizer announced Thursday that the U.S. government would pay $4.29 billion for 10 million doses of its experimental COVID-19 antiviral treatment. The German weekly Wirtschaftswoche, citing sources, also reported that the U.S. laboratory would submit an application for approval of the same treatment to European authorities on Friday.
* Merck & Co is down 1.2% in pre-opening trading after a clinical trial of a combination of its MK-8507 and islatravir drugs for the oral treatment of AIDS was halted midway through.
* PayPal is up 1% in pre-market trading after the payment group announced that cryptocurrencies, including bitcoin, would now be accepted to make purchases on sites in its network.
* Intuit - The accounting software company jumps nearly 11% in premarket trading after announcing Thursday it expects revenue growth of 26% to 28% for fiscal 2022, up from 15% to 16%.
* Alibaba fell 0.3% to $143.15 in premarket trading after plunging 11.12% after lowering its annual revenue growth forecast.
* Foot Locker is down 5% in premarket trading and headed for its worst session since September, as the athletic footwear retailer said it expects continued stress on global supply chains in the fourth quarter.
* Farfetch - The online high-end fashion specialist fell 22.4% in pre-market trading after reporting a larger-than-expected net loss in the third quarter.
* Phil Spencer, the head of Microsoft's Xbox division, said Thursday that his group is reviewing its relationship with Activision, which has been hit by accusations of sexual abuse among its employees.
* Blackstone - The U.S. private equity group submitted a $6.2 billion bid for Australian casino group Crown Resorts after Star Entertainment Group withdrew its $6.6 billion proposal.
* Delta Air Lines is considering a stake in Italian airline Italia Trasporto Aereo (ITA), the former Italian airline, to strengthen its presence in the European market, the daily La Repubblica reported Friday, citing government sources.
* Applied Materials announced Thursday that it expects sales and profits for the first quarter of its fiscal year to fall short of market expectations due to supply chain tensions. The stock is down 5.7% in after-hours trading.
- The Allstate Corporation: Jefferies initiated coverage with a recommendation of hold. PT up 7% to $121
- American Software: B Riley Securities cut the recommendation on American Software Inc. Class A to neutral from buy. PT up 1.6% to $31.
- Callon Petroleum: Wells Fargo Securities upgrades to equal-weight from underweight. PT rises 30% to $75.
- Chubb: Jefferies initiated coverage with a recommendation of buy. PT up 22% to $235
- CNH Industrial: Bestinver Securities downgrades to hold from buy. PT up 5.5% to $19.80
- Jacobs: Raymond James initiated coverage with a recommendation of outperform. PT up 15% to $170.
- Kilroy: RBC Capital Markets raised the recommendation to outperform from sector perform. PT up 12% to $80.
- NCR: Stephens Inc initiated coverage with a recommendation of overweight. PT set to $55
- Progressive: Jefferies initiated coverage with a recommendation of underperform. PT down 11% to $81
- Range Resources: Morgan Stanley downgrades to underweight from equal-weight. PT up 18% to $26.
- Sirius XM Holdings: Barclays cut its recommendation to underweight from equal-weight. PT down 5.1% to $6
- The Travelers Companies: Jefferies initiated coverage with a recommendation of hold. PT set to $165
- Willis Tower: Jefferies initiated coverage with a recommendation of hold. PT up 13% to $258
- W. R. Berkley Corporation: Jefferies initiated coverage with a recommendation of hold. PT up 0.1% to $82