According to the CME Group's FedWatch barometer, the probability of a rate cut is now estimated at almost 55% in March, compared with 22% a month ago. But let’s move to another topic.

Yesterday's drop in the price of a barrel of oil sent the oil sector into a tailspin, helping to drag Wall Street into the red at the end of the day. However, it is yet another positive signal for disinflation and looser monetary policies. Indeed, investors are still speculating on the date of the first rate cut by the Fed and ECB, which seems closer by the day.

Wall Street continued its consolidation yesterday. The S&P 500 lost ground for the third time in a row, weighed down by its oil stocks. The more turbulent Nasdaq 100 lost the benefit of the previous day's small rebound. This wait-and-see attitude confirms the predictions of some financiers, who believe that a pause is needed after November's sharp rebound. Earlier in Europe, all markets had gained between 0 and 1%, with the exception of Oslo, penalized by the over-representation of Norwegian oil stocks.

Energy stocks took another beating, crippled by falling oil prices. WTI US light crude fell below the symbolic USD 70 mark yesterday, the first time this price has fallen below this level since July. This deterioration in the price of black gold is a wake-up call for investors: if oil is falling, it's because economic uncertainty is threatening demand. In their euphoric mood, however, financiers pay little attention. They even prefer to think (partly rightly) that this is good news for inflation. And anything that reduces inflation is a confirmatory signal for a cut in key interest rates.

The prospect of lower interest rates is indeed the driving force behind the rebound in equities that started at the end of October. But there’s another induced factor supporting this acceleration: the slowing global economy. And this also justifies the restraint shown by investors in recent days. Bloomberg's Kristine Aquino produced an interesting psychological analysis of the market this morning. Basically, she explained that the stock market rally would have more strength if the Fed, rather than validating the more dovish expectations of the rates market, managed to convince investors that it’s going to leave rates unchanged for longer than they think. Why? Because if the central bank dispels expectations of a rate cut, the market will see it as a sign that the Fed continues to bank on a soft economic landing. Obviously, such a configuration would disappoint the market in the very short term, but it would allow the Fed to pick up the thread of the narrative and keep equity markets on the move, with a positive bias, as we understand it.

Let's switch continents and head for China, where indicators are still mixed and Moody's credit offensive continues. First of all, November's import-export figures delivered a mixed picture, in any case hardly compatible with a strong recovery. The good news of a slight rise in exports, the first in six months, was overshadowed by imports which continued to contract. But it was Moody's decision last night to place Hong Kong, Macau and a large proportion of China's state-owned enterprises and banks under credit watch that was the talk of the town. On Tuesday, the credit rating agency had already taken an identical measure concerning mainland China. The Hang Seng has just broken through its annual lows.

Back in the US, new data shows weekly jobless claims were stable last week.

Today's economic highlights:

  • Challenger layoffs, new jobless claims and wholesale inventories are on the agenda.
  • The dollar is slightly down to EUR 0.9274 and GBP 0.7950. The ounce of gold is stable at USD 2035.Oil stalled yesterday, with North Sea Brent at USD 75.13 a barrel and US light crude WTI at USD 70.26. The yield on 10-year US debt stood at 4.17%. Bitcoin is trading just below USD 44,000.

In corporate news:

  • Alphabet gains 2.8% in pre-market trading following the presentation of Gemini, its most advanced artificial intelligence (AI) model.
  • AMD announced on Wednesday that it estimates the market for its artificial intelligence (AI) processors in data centers at $45 billion this year, as the company launches a new generation of AI chips. Its shares gained 3.1% and Nvidia advances 0.3% in pre-market trading.
  • Robinhood Market - The trading platform announced on Thursday the launch of a commission-free cryptocurrency trading service for customers in the European Union. Shares advance 1.1% in pre-market trading.
  • Cerevel Therapeutics jumps 16.1% in premarket trading after Wednesday's announcement that it has been acquired by ABBVIE for $8.7 billion, as the latter seeks revenue substitutes for Humira, its arthritis treatment that faces competition from cheaper drugs.
  • Bristol-Myers Squibb gains 1.2% in pre-market trading, as the company announces an additional $3 billion share buyback plan.
  • Gamestop dropped 7.6% in premarket trading after the video-game distributor reported lower-than-expected quarterly sales amid slowing consumer spending and economic uncertainty.
  • JetBlue Airways gained 4.65% in premarket trading, as the airline raised its adjusted annual earnings per share forecast, saying it now expected a smaller net loss of $0.50 to $0.40 per share.
  • Meta Platform announced on Wednesday its intention to fully encrypt all calls and personal messages on Messenger and Facebook.
  • KKR & CO wants to raise up to $7 billion for its first global climate fund, which will invest in energy transition projects, according to a source with direct knowledge of the matter.
  • Chevron announced on Wednesday that it expects to spend between $15.5 and $16.5 billion on capital expenditure in 2024, and around $3 billion for its affiliated companies.
  • Dollar General climbed 2.9% in pre-market trading, as the low-cost retailer reported a smaller-than-expected decline in third-quarter sales.
  • Chargepoint Holdings is down 2.9% in premarket trading, as the group reported quarterly sales below analysts' estimates, while third-quarter net loss widened to $158.2 million.
  • Nikola plummets 14.5% in pre-market trading, as the electric vehicle manufacturer seeks to raise funds via convertible bonds.
  • C3.AI - The software company falls 10.7% in premarket trading after reporting quarterly sales below analysts' expectations.
  • Chewy - The pet products distributor plunges 10% in premarket trading after lowering its annual sales forecast and appointing David Reeder as CFO.

Analyst recommendations:

  • Agilent Technologies, Inc.: Goldman Sachs maintains its buy recommendation and raises the target price from USD 128 to USD 145.
  • Autozone, Inc.: Morgan Stanley maintains its overweight rating and raises the target price from USD 2750 to USD 2900.
  • Biogen Inc.: Raymond James upgrades to outperform from market perform with a target price of USD 283.
  • Boeing: JP Morgan maintains its overweight recommendation and raises the target price from USD 245 to USD 270.
  • Builders Firstsource, Inc.: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 135 to USD 150.
  • Charter Communications, Inc.: JP Morgan maintains its overweight rating and reduces the target price from USD 465 to USD 445.
  • Chevron Corporation: Citigroup remains neutral recommendation with a price target reduced from USD 170 to USD 148.
  • Chewy, Inc.: MoffettNathanson LLC downgrades to neutral from market perform with a price target reduced from USD 34 to USD 21.
  • Chipotle Mexican Grill, Inc.: Raymond James maintains its outperform rating and raises the target price from USD 2100 to USD 2450.
  • Danaher Corporation: Goldman Sachs downgrades to neutral from buy with a price target reduced from USD 215 to USD 205.
  • Ferguson Plc: Barclays maintains its overweight recommendation and raises the target price from USD 185 to USD 208.
  • Idexx Laboratories, Inc.: BNP Paribas Exane initiates an Outperform recommendation with a target price of USD 602.
  • Lennar Corporation: Evercore ISI maintains its outperform rating and raises the target price from USD 161 to USD 177.
  • Mcdonald's Corporation: Gordon Haskett maintains its buy recommendation and raises the target price from USD 300 to USD 325.
  • Mettler-Toledo International, Inc.: Goldman Sachs maintains a neutral recommendation with a price target raised from USD 1030 to USD 1050.
  • Norfolk Southern Corporation: Wells Fargo maintains its overweight rating and raises the target price from USD 220 to USD 250.
  • Pultegroup, Inc.: Evercore ISI maintains its outperform rating and raises the target price from USD 107 to USD 118.
  • Quanta Services, Inc.: Goldman Sachs maintains its buy recommendation and raises the target price from USD 211 to USD 227.
  • Rio Tinto Plc: Citigroup maintains its buy recommendation with a price target raised from GBP 57 to GBP 65.
  • Salesforce.com, Inc.: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 265 to USD 293.
  • Servicenow, Inc.: Oppenheimer maintains its outperform rating and raises the target price from USD 640 to USD 750.
  • Shopify Inc.: BNP Paribas Exane maintains a neutral recommendation with a price target raised from USD 62 to USD 73.
  • Smiths Group Plc: Redburn Atlantic initiates a Buy recommendation with a target price of GBX 2000.
  • T-Mobile Us: HSBC maintains its buy recommendation and raises the target price from USD 165 to USD 175.
  • The Cigna Group: Baptista Research maintains its hold recommendation with a price target reduced from USD 325 to USD 292.10.
  • The Home Depot, Inc.: Baptista Research downgrades to underperform from hold with a price target reduced from USD 346.50 to USD 331.70.
  • Thermo Fisher Scientific: Goldman Sachs maintains its buy recommendation and raises the target price from USD 500 to USD 520.
  • Tyson Foods, Inc.: Baptista Research downgrades to hold from buy with a price target reduced from USD 74.30 to USD 55.
  • Veeva Systems Inc.: Canaccord Genuity maintains its hold recommendation with a price target reduced from USD 210 to USD 185.
  • Zoetis Inc.: BNP Paribas Exane initiates an outperform recommendation with a target price of USD 237.