The real stuff begins this week for corporate results. These figures are of considerable importance to the financial world, since they allow investors to value a company and to gauge its potential. And to know if it is likely to make money for a shareholder. The published figures are compared with the expectations of research departments, which are themselves based on the forecasts of companies. This comparison between actual and expected numbers helps assess whether a reporting season is good or not. Investors compare revenues and earnings trajectories, balance sheet items or shareholder compensation. In the United States, where it is easier to get to the bottom line than elsewhere, earnings per share are the key indicator.
In the midst of thousands of results, those of markets leaders are of course more important than others. And that's probably even more true in October 2021, as they are an important anchor equity markets, which are still reeling from the accumulation of worrisome macroeconomic indicators. So far, the first results have been quite good, but the pace will accelerate this week, with players in healthcare (Johnson & Johnson or Roche), technology (Netflix, Intel, ASML, PayPal), luxury (Kering, L'Oreal), manufacturing (Atlas Copco, Honeywell) or "technautomobile" (Tesla). Of course, this is just a sample, as hundreds of companies of all sizes will be reporting in the coming days.
On the "macro" level, it is China that still largely occupies the field to start the week. The country's GDP grew by 4.9% in the third quarter, according to official statistics released this morning, slightly less than expected (5 to 5.2% according to surveys). In reality, this is not really a surprise: August and September were complicated by energy restrictions that have plunged production and aftershocks from the China Evergrande earthquake. On this issue, the Chinese central bank was rather reassuring over the weekend, in an attempt to calm down a local real estate market that is buzzing with rumors. But on this subject as on the rest, nobody knows Beijing's true intentions. To end on a positive note, we note that Chinese retail sales for September, also released this morning, were stronger than expected.
Economic highlights of the day:
September's U.S. industrial production and the NAHB housing index are the main indicators today. This morning, China reported a GDP growth of 4.9% in the third quarter (consensus 5%), but retail sales in September were more dynamic than expected (+4.4% vs. +3.5% expected).
The dollar is trading at 0.8617, while an ounce of gold is worth USD 1768. Oil, on the other hand, is still on a roll, at USD 85.34 per barrel of Brent and USD 83.12 per barrel of WTI. In the sovereign debt market, yields are rather up, with 10-year maturities at 1.61% (+4 points) in the US and -0.17% (unchanged) in Germany. Bitcoin is approaching its record highs by passing the USD 62,000 mark again.
* Exxon Mobil and Chevron gain 0.8% and 0.6% respectively in pre-market trading amid rising oil prices, at the highest since October 2018 for Brent crude.
* Facebook announced Monday that it plans to hire 10,000 people in the European Union over the next five years to help create a "metaverse," an online world in which users interact in shared virtual spaces.
* Netflix estimates that its "Squid Game" series, which is the most successful startup in the online video platform's history, could bring in nearly $900 million, Bloomberg reports, citing figures from an internal document.
* Apple is expected to unveil new versions of its MacBook laptop line on Monday that could rely on a new processor developed in-house to replace chips from INTEL, most analysts believe ahead of an online presentation by the group.
* Goldman Sachs announced Sunday that it has received approval from China's securities regulator to take control of its Chinese joint venture.
* Square plans to build a bitcoin mining system based on an open source platform for individuals and businesses, CEO Jack Dorsey said Friday.
* Zillow Group - The online real estate group was down 4.7 percent in pre-market trading after a Bloomberg report that it has stopped buying U.S. residential real estate.
* United Therapeutics announced Monday that the Food and Drug Administration (FDA) has denied approval for its treatment of a type of lung cancer, developed in partnership with Mannkind.
- Antero Resources: Mizuho Securities raised the recommendation to buy from neutral. PT jumps 63% to $32
- Avaya Holdings: J.P. Morgan downgrades to neutral from overweight. PT up 15% to $23
- Coterra Energy: Mizuho Securities raised the recommendation to buy from neutral. PT lifted 52% to $31
- Drax: Jefferies upgrades the rating to Buy from Hold with a target of GBP 660.
- GlaxoSmithKline: Berenberg remains Buy with a price target reduced from GBP 1625 to GBP 1540.
- Goldman Sachs: JP Morgan maintained his recommendation on the stock with a Buy rating. Previously set at USD 458, the target price has been slightly modified to USD 460.
- Hostess Brands: Credit Suisse initiated coverage with a recommendation of outperform. PT set to $22
- J.P. Morgan : Berenberg analyst reiterate his Sell rating on the stock. The target price is increased from USD 110 to USD 125
- The PNC Financial Services: BofA Securities downgrades pnc financial services group to neutral from buy
- NetApp: Goldman Sachs downgrades NetApp to sell from neutral. PT down 14% to $81
- Steel Dynamics: Morgan Stanley cut the recommendation to equal-weight from overweight. PT down 1.4% to $61
- Summit Materials: RBC Capital Markets analyst Michael Dahl cut the recommendation on Summit Materials Inc. Class A to sector perform from outperform. PT set to $37, implies a 11% increase from last price. Summit Materials average PT is $38.40
- United States Steel: Morgan Stanley cut the recommendation to underweight from overweight. PT down 23% to $17