A lot is being said and not much is actually happening. That's how you could sum up yesterday, in a financial world that seems to be getting sleepier every day as the summer season approaches. Meanwhile, the G7 met in the southwestern tip of the UK for Joe Biden's first major international outing.
Yesterday’s two major macroeconomic data did not cause any trouble. So much so that economists are having a bit of trouble explaining some of the market reactions, including the sharp drop in the yield on 10-year U.S. government bonds as inflation numbers beat expectations. Could it be further evidence of the divorce between finance and the economy? Or is it data showing that the labor market improved in May. Or perhaps, this is due to the Fed’s confidence that it is a transitory overinflation.
In Europe, the ECB’s growth and inflation projections have been released, with no surprises. The traditional North-South friction has resumed between central bankers. Countries in the North (Germany and the Netherlands in particular) would have preferred Christine Lagarde to prepare markets for a reduction in support plans. The Southern countries would prefer the economy to have recovered its cruising speed before any reversal. For the moment, they are the ones who have won.
The "when will central banks start phasing out" debate is far from over. It's a hot topic in the U.S., with less than a week to go before the Fed's June meeting. Economists think the central bank could announce something at its July 28 meeting or at the Jackson Hole symposium in late August. Or rather, start preparing markets for a reduction in its support, before a planned kick-off next year. This is the beginning of the "tapering" of central bank intervention, which will move the economy into a new phase, which should lead to a cycle of rising rates, with new problems and new opportunities. Provided, of course, that traditional patterns fall back into place.
On Thursday, the ECB / US inflation conjunction did not cause any major upheaval. Indices did experience a spike in volatility at the time of the announcements, but everything quickly fell back. In the end, several markets, including Wall Street, ended in the green.
In Washington, a bipartisan group of senators is working on the Biden administration's controversial infrastructure plan. In Britain, the G7 leaders are meeting in Cornwall, under the British presidency, until Sunday to discuss the economy, vaccines, international relations and other seasonal topics.
Economic highlights of the day
The monthly British GDP figures and the June University of Michigan consumer confidence index are expected today.
The dollar/euro pair is little changed at $0.8247. Gold ounce is down to USD 1888. Oil is down slightly at USD 70.22 per barrel WTI and USD 72.44 per barrel Brent. U.S. debt yields are down at 1.43% over 10 years. Bitcoin is moving slightly above 37,000 USD.
* Apple confirmed Thursday night that it has hired Ulrich Kranz, a former top executive at BMW's electric vehicle division, to strengthen its electric vehicle business.
* Alphabet - Google, the group's main subsidiary, has made commitments to British authorities regarding the removal of cookies from its Chrome browser so as not to restrict competition in the advertising market, the Competition and Markets Authority announced Friday.
* Blackrock announced Friday that its Chinese fund management subsidiary has received the green light from Beijing to start operations, making it the first international asset manager to enter the domestic mutual fund market in China.
* Riot Blockchain is gaining 1.1% in pre-market trading after more than tripling its bitcoin production in May compared to the same month last year.
Auto Trader: Liberum remains Buy with a price target raised from GBp 660 to GBp 700.
Brown-Forman Corporation : Deutsche bank adjusts price target to $70 from $75, keeps hold rating
Casey's General Stores : Goldman Sachs adjusts pt to $240 from $262, maintains buy rating
Crescent Point Energy : RBC Capital upgrades stock to outperform from sector perform, adjusts price target to C$7.50 from C$6.50
GameStop : Wedbush adjusts price target on underperform-rated stock to $50 from $39,
Hunting: Jefferies remains Buy with a price target reduced from GBp 360 to GBp 350.
Johnson Controls International : Oppenheimer adjusts pt to $75 from $70, maintains outperform rating
KLX Energy Services : R.F. Lafferty downgrades klx energy to hold from buy, adjusts pt to $8 from $15
Qiagen: Berenberg retains its Buy rating. The target price is reduced from EUR 56 to EUR 54.
Reckitt Benckiser: JP Morgan retains his positive opinion on the stock with a Buy rating. The target price is still set at GBp 9000.
RH : BofA Securities adjusts rh price target to $775 from $685, maintains buy rating
The Sherwin-Williams Company : BofA Securities upgrades to buy from underperform
Spire : Sidoti & Co upgrades to buy from neutral, raises pt to $83 from $76
United Parcel Service : Oppenheimer adjusts pt to $222 from $210, maintains outperform rating