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: All eyes on Powell

01/11/2022 | 10:19am EDT
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Yesterday, Wall Street was off to a bad start, with the ongoing purge in the tech sector. But the return of buyers in the second half of the day allowed the losses to be recouped. The Nasdaq even ended with a slight gain, helped by some heavyweights and health care stocks. The Fed's normalization push, though it has been spoke about for months, continues to cause a stir.

This morning, US indexes remain mixed in anticipation of a speech from Federal Reserve Chair Jerome Powell. He is testifying before a Senate Banking Committee hearing since 10 am ET.

Congress is expected to question Powell on how the Fed plans to deal with inflation. According to prepared remarks released Monday, Powell is stressing that the Fed will “use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched"

Jerome Powell is  also voicing his support for the poorest households hit by inflation.  "We are strongly committed to achieving our statutory goals of maximum employment and price stability,"

The Fed chair said he expected that the Fed would raise interest rates this year and end its asset purchases, but that no decision was made yet about the timing.

Investors will be closely assessing his every word to get some more clues about the Fed’s monetary policy and the timing of interest rates.

The United States offered yesterday a choppy stock market session full of volatility, thanks to bipolar technology stocks. Fortunately for investors, the pendulum swung from a sharp decline to a symbolic rise and not the other way around. Specifically, the Nasdaq 100 lost up to 2.7% during the session but closed with a gain of 0.14%. In this context, the 0.14% decline in the S&P500 and the 0.45% decline in the Dow Jones are almost anecdotal. In the game of hindsight, the theory of cheap buybacks holds true, as the return of the buying flow coincided with the approach of the "contraction zone" on the Nasdaq. This does not mean that the index will necessarily deliver a rebound, although the Nasdaq is up 0.2% as I write this, but it is an important marker for investors.


Today's economic highlights:

No major indicators today, but a hearing of Jerome Powell by the Senate.

The dollar is trading at EUR 0.8827, while the ounce of gold is up to USD 1805. In the oil market, North Sea Brent crude is trading at USD 81.6 per barrel, while U.S. light crude WTI is at USD 78.95 The T-Bond has a stable 10-year yield of 1.76%. Bitcoin is regaining some color at USD 41604.


On markets:

Apple - South Korea's telecom regulator said Tuesday that Apple has submitted a proposal to allow third-party payments on the App Store, its app store, in line with a new law that prohibits major platforms from imposing their payment systems on developers.

* Tesla - The U.S. automaker sold 70,847 vehicles produced in China in December, the highest monthly pace since its Shanghai plant opened in 2019, data from the China Passenger Car Association (CPCA) released Tuesday show. The stock rises 1.5 percent to $1,074 in pre-market trading.

* Intel- The U.S. semiconductor manufacturer, which last month banned its suppliers from sourcing from Xinjiang, removed in its annual letter to its partners any reference to this Chinese region where Beijing is accused of carrying out a policy of repression and violating the rights of the Muslim minority of Uyghurs. In other news, Intel chose David Zinsner, the current finance boss at Micron Technology, as the group's new CFO on Monday evening, effective January 17. Intel shares jumped 5% in after-hours trading, while Micron fell 1.5%.

* Amazon - The online retailer's stock gained 1% in pre-market trading after Morgan Stanley raised its price target on the stock from $4,000 to $4,200. The intermediary noted an improvement in the supply chain situation.

* IBM - The U.S. computer giant is down 2.4% in premarket trading after UBS lowered its recommendation on the stock to "sell" from "neutral".

* Merck & Co - The company said Monday that its oral treatment for COVID-19 should be effective against the Omicron variant and other strains of Sars-CoV-2.

* Rivian Automotive - The automaker said Monday it will produce 1,015 electric vehicles in 2021, a figure in line with its lowered guidance announced last month. In other news, the group announced the departure of its deputy CEO, Rod Copes.

* Abercrombie & Fitch - The American ready-to-wear chain announced on Monday that it expected its fourth quarter sales to increase by 4%-6%. The stock jumped 7% in after-hours trading.

* Illumina - The life sciences company announced Monday that it has signed four healthcare partnerships and said it expects this year's sales to beat Wall Street expectations on strong demand for its genetic sequencing products.

* KKR - Qonto, a specialist in corporate financial management, announced on Tuesday that it had raised funds led by KKR, among others, bringing its valuation to 4.4 billion euros. In addition, the chairman of Telecom Italia (TIM) TLIT.MI, a telecom operator that the U.S. fund KKR wants to buy, will convene the board of directors of the group on January 21 to appoint a new managing director, according to a source familiar with the matter.


Analyst recommendations:

  • Ambarella: BofA Securities raises PT for Ambarella to $140 from $119, maintains Underperform rating
  • AMD: KeyBanc Capital Markets upgrades to overweight from sector weight. PT up 17% to $155
  • American Air: Morgan Stanley upgrades to equal-weight from underweight. PT up 12% to $21
  • Aveva: Jefferies remains Hold with a price target reduced from GBp 3,700 to GBp 3,300.
  • Computacenter: Jefferies resumes Buy rating on the stock, targeting GBp 4100.
  • Danaher: Bernstein starts at outperform with $365 price target
  • Darktrace: Jefferies remains Buy with a price target reduced from GBp 1030 to GBp 800.
  • Great Portland: Berenberg downgrades from buy to hold with a target of GBp 750
  • Intel Corporation: BofA Securities raises price target for intel to $55 from $50, maintains underperform rating
  • Las Vegas Sands: J.P. Morgan upgrades to overweight from neutral. PT up 32% to $48
  • L3Harris: Wolfe Research upgrades to outperform from peerperform. PT up 19% to $266
  • Micro Focus: Jefferies upgrades from hold to buy with a GBp 600 target.
  • Northern Trust: Keefe Bruyette & Woods lifts to outperform from market perform, price target to $152 from $130
  • Northrop Grumman: Cut to Peerperform at Wolfe
  • Tesla: Morgan Stanley adjusts price target to $1,300 from $1,200, reiterates overweight rating
  • The Bank of New York Mellon Corporation: Keefe Bruyette & Woods downgrades to market perform from outperform
  • The Home Depot: Evercore ISI lowers price target to $435 from $445, maintains outperform rating
  • United Health: Edward Jones initiates coverage with buy rating
  • Workspace: Berenberg upgrades from sell to hold with a target of GBp 850.
  • Wynn Resorts: Citigroup downgrades Wynn Resorts to Neutral from Buy

© 2022
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Stocks mentioned in the article
ChangeLast1st jan.
ABERCROMBIE & FITCH CO. -1.71% 21.85 End-of-day quote.-37.27%
AMAZON.COM, INC. 4.03% 2221.55 End-of-day quote.-33.37%
AMBARELLA, INC. 6.71% 80.15 End-of-day quote.-60.50%
AMDOCS LIMITED -0.70% 84.98 End-of-day quote.14.35%
AMERICAN AIRLINES GROUP INC. 6.88% 17.24 End-of-day quote.-4.01%
APPLE INC. 2.32% 143.78 End-of-day quote.-19.03%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.53% 0.7136 End-of-day quote.-2.35%
AVEVA GROUP PLC 2.73% 2221 End-of-day quote.-34.75%
BANK OF NEW YORK MELLON CORPORATION (THE) 2.10% 45.66 End-of-day quote.-23.00%
BITCOIN (BTC/EUR) -1.51% 27209.9 End-of-day quote.-35.26%
BITCOIN (BTC/USD) -0.65% 29315.8 End-of-day quote.-38.59%
BRITISH POUND / US DOLLAR (GBP/USD) 0.16% 1.2636 End-of-day quote.-6.98%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.17% 0.7841 End-of-day quote.-1.39%
CITIGROUP INC. 2.64% 54.09 End-of-day quote.-10.43%
COMPUTACENTER PLC 1.19% 2544 End-of-day quote.-12.58%
DANAHER CORPORATION 0.56% 251.71 End-of-day quote.-23.49%
DARKTRACE PLC 2.95% 362.7 End-of-day quote.-13.68%
EURO / US DOLLAR (EUR/USD) 0.19% 1.0753 End-of-day quote.-6.01%
EVERCORE INC. 2.67% 111.84 End-of-day quote.-17.67%
GREAT PORTLAND ESTATES PLC 1.48% 650 End-of-day quote.-10.71%
ILLUMINA, INC. 0.48% 243.57 End-of-day quote.-35.98%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.05% 0.0129 End-of-day quote.-3.94%
INTEL CORPORATION 3.03% 43.48 End-of-day quote.-15.57%
KKR & CO. INC. 7.59% 54.44 End-of-day quote.-26.93%
L3HARRIS TECHNOLOGIES, INC. 0.06% 236.79 End-of-day quote.11.04%
LAS VEGAS SANDS CORP. 6.55% 34.17 End-of-day quote.-9.22%
LONDON BRENT OIL -0.19% 117.19 End-of-day quote.45.92%
MERCK & CO., INC. -1.54% 92.31 End-of-day quote.20.45%
MICRO FOCUS INTERNATIONAL PLC 1.72% 378.5 End-of-day quote.-9.43%
MICRON TECHNOLOGY, INC. 4.02% 70.6 End-of-day quote.-24.21%
MORGAN STANLEY 3.37% 85 End-of-day quote.-13.41%
NASDAQ 100 2.79% 12276.79 End-of-day quote.-26.81%
NASDAQ COMP. 2.68% 11740.65 End-of-day quote.-26.91%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.50% 0.6513 End-of-day quote.-5.22%
NORTHERN TRUST CORPORATION 2.03% 109.74 End-of-day quote.-8.25%
NORTHROP GRUMMAN CORPORATION -0.04% 467.43 End-of-day quote.20.81%
ON SEMICONDUCTOR CORPORATION 5.49% 59.33 End-of-day quote.-12.65%
RIVIAN AUTOMOTIVE, INC. 7.27% 29.23 End-of-day quote.-71.81%
S&P 500 1.99% 4057.84 End-of-day quote.-16.52%
S&P GSCI BRENT CRUDE INDEX -0.17% 970.0437 End-of-day quote.42.86%
S&P GSCI CRUDE OIL INDEX -0.19% 624.0818 End-of-day quote.46.70%
TESLA, INC. 7.43% 707.73 End-of-day quote.-33.03%
THE HOME DEPOT, INC. 3.15% 302.81 End-of-day quote.-27.04%
TIM S.A. 0.71% 14.25 End-of-day quote.8.37%
UBS GROUP AG -0.20% 17.745 End-of-day quote.8.07%
UNITED HEALTH PRODUCTS, INC. -1.76% 0.5403 End-of-day quote.-8.42%
WORKSPACE GROUP PLC 2.63% 703 End-of-day quote.-13.05%
WTI -0.10% 113.897 End-of-day quote.46.73%
WYNN RESORTS, LIMITED 7.89% 64.43 End-of-day quote.-24.24%
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