The previous week was generally negative for financial markets, but it was far from the sharp correction feared a few sessions ago. In the United States, the recovery of technology stocks at the end of the week has erased some of the weekly losses. The Nasdaq nonetheless ended its fourth week in a row in the red, but on a relatively modest decline. Cyclical or low-value sectors continue to dominate. Financials are shining bright in the US, neck and neck with oil, while commodities follow.
So nothing new… But don't go away just yet, there are still some big changes on a larger scale. The scenario of a two-tier vaccination is confirmed between a pocket of countries that are starting to reach correct rates and a large number of others that are far from it, or even have no campaign at all, due to lack of vaccines or dedicated policies. And we are beginning to see the pandemic's virulence resurge in several Asian countries, not the least of which is Taiwan and Japan. We are still a long way from the Indian situation, but as ING economist Robert Carnell wrote this morning, tolerance for the virus is much lower in Asia than in the West, which means that even if the number of cases is low, political reactions can be brutal in some countries. This is a point of vigilance.
How can we not talk about cryptocurrencies? Bitcoin went from $60,000 a few weeks ago to $43,000 today. The phenomenon at work is still fascinating and not exactly reassuring for the sanity of the financial world. Basically, you have an asset that overexcites investors, to the point of seeing it included in the offerings of the world's largest banks and asset management firms. So far so good: based on blockchain, available in finite quantities and used for transactions, it can be part of a form of diversification. The problem is that this asset is subject to quite irrational winds, foremost among them billionaire Elon Musk, whose gospel makes and breaks the prices of several cryptos. Where will it go? An asset that can take or give back 10% at any time isn't exactly reassuring…
Economic highlights of the day:
The Empire Manufacturing Index and the NAHB Housing Index for May are expected in the US. China announced earlier today an April industrial production increase of 9.8% year-on-year (consensus 10%) and retail sales up 17.7% (consensus 25%).
The dollar is firm at EUR 0.8220. Gold is back up to USD 1850. Oil is steady with a barrel of Brent crude at USD 68.73 and a barrel of WTI at USD 65.37 USD. Bitcoin is falling heavily below USD 45,000.
* AT&T is close to closing a deal to combine its media assets, which include CNN and HBO, with Discovery, Bloomberg and The Wall Street Journal reported Sunday, citing people familiar with the matter.
* Australian casino operator Crown Resorts on Monday rejected Blackstone's $6.5 billion buyout offer as too low and said it was seeking more information about Star Entertainment's merger proposal.
* KKR is close to buying the EMR consulting group for up to $3 billion, Bloomberg reported Sunday, citing sources close to the matter.
- Avast: Jefferies remains Buy with a target cut from GBp 685 to GBp 679.
- Alibaba : Nomura adjusts Price Target to $285 From $325, Keeps at Buy
- The Bank of Nova Scotia : Credit Suisse stays Underperform, $75 TP
- Bilibili : Nomura lowers Bilibili's Price Target to $114 from $138, keeps Buy rating
- Centrica: Citigroup remains Buy with a target price raised from GBP 75 to GBP 80.
- Daimler: Barclays still consider the stock as a Buy opportunity. The target price is still set at EUR 115.
- Delta Air Lines : Wolfe Research raises PT to $39 From $35, maintains Underperform rating
- Drax: Citigroup upgrades from neutral to buy with a target of GBP 505.
- HSBC upgraded from Hold to Hold with a target of GBP 44.
- Hyve Group: Liberum upgraded from Hold to Buy targeting GBp 140.
- Just Eat Takeaway: J.P. Morgan remains neutral with target lowered from GBp 10,460 to GBp 9676.
- Marshalls: Berenberg remains Hold with a target price raised from GBP 740 to GBP 790.
- Microsoft : First Shanghai Securities raises PT to $300 From $290, maintains Buy rating
- Sage: Jefferies remains Buy with a target reduced from GBP 830 to GBP 810.
- United Airlines : Wolfe Research adjusts PT to $37 From $35, keeps Underperform rating