European and US equity markets told a very different story on Friday. Just compare the 1% fall in the Stoxx Europe 600 and the 1.6% rise in the S&P500. The Nasdaq jumped 2.25%, helped by a solid contribution from its heavyweights. The performance gap continues to widen between the two continents. In the United States, the powerful story of the end of the Fed's rate hike triggered mechanical reactions: investors know that this is traditionally an excellent time to step up equity bets. One of the best times, in fact. Those who miss the first train usually fall behind the others, because the next phase is less frugal.

I should point out, however, that not all US equities are in the same boat. To get an idea of the impact of large-cap tech stocks in the US, we can compare the S&P500 and the S&P500 Equal Weighted. The former takes into account traditional stock variations, i.e. by weight. The latter is made up of the same stocks, but as if they were all equal. Apple therefore has the same influence as the last capitalization in the index, a stock like News Corp, which actually weighs 239 times less.

Put simply, if the S&P500 is outperforming the S&P500 Equal Weighted, it's because the big stocks are doing better than the small ones. Between January 1 and November 10 2023, the S&P500 gained 15%, while the S&P500 Equal Weighted was slightly negative. Big tech is dictating the overall trend. Roundhill's "Big Tech" ETF, which exclusively includes the "magnificent seven" (Microsoft, Apple, Alphabet, Amazon, Nvidia, Tesla, Meta). It gained 4.3% last week, compared with 1.6% for the S&P500.

Investors are seeing the glass half full when it comes to the future path of interest rates. They are convinced the Fed has no choice but to end its punitive monetary policy designed to curb inflation. This is despite Jerome Powell insisting that the fight against inflation is not over. He knows that his firm comments may be enough to spare the institution a final rate hike. In this respect, the market will face another major test on Tuesday with the US inflation figures for October. In all likelihood, they will confirm the trend of deflating price rises - not falling prices, which is not the same thing – due to year-on-year comparisons and specific factors, such as falling gasoline prices. On Friday, US investors seem to have anticipated positive or neutral news on the inflation front, which would reinforce the blue-sky scenario.

On Friday, Moody's lowered the credit rating outlook for the USA from stable to negative, but maintained the country's "triple A" rating. While we're on the subject of debt, House of Representatives Speaker Mike Johnson unveiled a measure on Saturday aimed at averting a partial shutdown of the US federal government before the November 17 deadline. Finally, Joe Biden and Xi Jinping will meet on Wednesday in San Francisco on the sidelines of the APEC summit. Economic and defense issues will be on the agenda.

The pace of earnings reports releases is slowing, but there are still some big names in the pipeline, including BAE Systems, The Home Depot, Tencent, Infineon, Cisco, Vodafone, Siemens AG, Walmart and Applied Materials.

Economic highlights of the day:

The dollar is stable at EUR 0.9369 and GBP 0.8169. The ounce of gold is trading at USD 1935. Oil is close to Friday's levels, with North Sea Brent at USD 81.83 a barrel and US light crude WTI at USD 77.57. The yield on 10-year US debt is stable at 4.66%. Bitcoin is trading at around USD 36,900.

In corporate news:

  • Boeing - Emirates announced Monday at the opening of the Dubai Airshow that it had ordered 90 Boeing 777Xs and added five Boeing 787s to an existing order, worth $50 billion at list price.
  • SunExpress Airlines, a joint venture between Turkish Airlines and Lufthansa, has also placed a firm order for 45 737 MAX aircraft to be delivered between 2029 and 2035, with options or purchase rights for a further 45.
  • China, meanwhile, is considering resuming purchases of 737 Max aircraft, Bloomberg reported on Sunday, citing people familiar with the matter.
  • Alphabet - Google is in talks to invest hundreds of millions of dollars in artificial intelligence startup Character.AI, two sources familiar with the matter told Reuters, which would strengthen the existing partnership between the two companies.
  • Ford - United Auto Workers (UAW) production workers at the Louisville assembly plant and Kentucky truck plants voted against a proposed four-and-a-half-year contract, while skilled workers voted in favor of the deal, the union's local unit announced on Facebook.
  • Exxon Mobil is expected to unveil its lithium strategy on Monday, announcing plans to start producing the essential metal for electric vehicle batteries in Arkansas by 2026, according to a source familiar with the matter.
  • Chevron said on Monday that it had resumed natural gas supplies from the Tamar offshore gas field to customers in Israel and the region, after the Israeli Ministry of Energy asked it to resume production.
  • Micron is down 0.4% in pre-market trading after Chinese chipmaker Yangtze Memory Technologies Co (YMTC) filed a lawsuit against the US group for infringement of eight of its patents.
  • Tesla - British service station operator EG Group said on Monday it would buy Tesla ultra-fast charging units to boost its electric vehicle charging network across Europe, and will extend its network to more than 20,000 chargers at its own sites over time, up from more than 600 at present.
  • Streaming groups will pay bonuses of around $40 million a year as part of a tentative agreement between actors' union SAG-AFTRA and major Hollywood studios, union officials said Friday.
  • Voting to ratify the agreement with Netflix, Walt Disney, Warner Bros Discovery and other members of the Alliance of Motion Picture and Television Producers (AMPTP) is expected to conclude in early December, said actors' union chief negotiator Duncan Crabtree-Ireland.
  • Wynn Resorts - Las Vegas hotel workers have reached a tentative agreement with the casino operator, their unions announced Friday, ending the threat of a strike that could have paralyzed tourism in the U.S. city.

Analyst recommendations:

  • Airbnb, Inc.: Bernstein maintains its outperform rating and reduces the target price from USD 168 to USD 163.
  • Alliant Energy Corporation: Barclays maintains its overweight recommendation and reduces the target price from USD 53 to USD 50.
  • Anglo American Plc: HSBC maintains its buy recommendation and reduces the target price from GBP 26.50 to GBP 25.
  • Antofagasta Plc: HSBC maintains its reduce recommendation and reduces the target price from 11 to GBP 10.
  • Apple Inc.: Daiwa Securities maintains its outperform rating and raises the target price from USD 190 to USD 210.
  • Arista Networks, Inc.: BNP Paribas Exane maintains its outperform rating and raises the target price from USD 220 to USD 245.
  • Astrazeneca Plc: DZ Bank AG Research maintains its hold recommendation with a price target reduced from 111 to GBP 110.
  • Best Buy Co., Inc.: Wells Fargo maintains its equalweight recommendation and reduces the target price from USD 80 to USD 65.
  • Booking Holdings Inc.: Bernstein upgrades to market perform from underperform with a price target raised from USD 2600 to USD 2940.
  • Canadian Natural Resources Limited: Jefferies maintains its hold recommendation with a price target raised from 97 to CAD 98.
  • Carrier Global Corporation: Baptista Research maintains its hold recommendation and reduces the target price from USD 63.10 to USD 55.
  • Cheniere Energy, Inc.: Citigroup maintains its outperform rating and raises the target price from USD 192 to USD 210.
  • Chipotle Mexican Grill, Inc.: Wolfe Research maintains its outperform rating and raises the target price from USD 2075 to USD 2350.
  • Cme Group Inc.: Redburn Atlantic maintains its buy recommendation and raises the target price from USD 240 to USD 242.
  • Corebridge Financial, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 23 to USD 25.
  • Corteva, Inc.: Loop Capital Markets maintains its hold recommendation with a price target reduced from USD 71 to USD 57.
  • Dexcom, Inc.: Baptista Research maintains its buy recommendation and reduces the target price from USD 145 to USD 128.70.
  • Diageo Plc: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from GBX 3300 to GBX 3000.
  • Expedia Group, Inc.: Bernstein maintains its market perform recommendation and raises the target price from USD 105 to USD 117.
  • Ford Motor Company: Baptista Research downgrades to buy from hold with a price target reduced from USD 14.60 to USD 12.90.
  • Hologic, Inc.: Morgan Stanley maintains its market weight recommendation and reduces the target price from USD 86 to USD 82.
  • Hp Inc.: Citi upgrades to buy from neutral with a price target raised from USD 31 to USD 33.
  • Illumina, Inc.: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from USD 200 to USD 190.
  • Iqvia Holdings Inc.: JP Morgan maintains its overweight recommendation and reduces the target price from USD 262 to USD 239.
  • Keurig Dr Pepper Inc.: Baptista Research upgrades to buy from hold with a price target raised from USD 37 to USD 39.60.
  • Legal & General Plc: Autonomous Research upgrades to outperform from neutral with a price target raised from GBP 2.50 to GBP 2.60.
  • Mettler-Toledo International, Inc.: Stifel maintains its buy recommendation and reduces the target price from USD 1425 to USD 1270.
  • Phillips 66: Jefferies remains at hold with a target price raised from USD 125 to USD 129.
  • Pioneer Natural Resources Company: Jefferies maintains its hold recommendation with a price target reduced from USD 267 to USD 255.
  • Prudential Plc: Deutsche Bank maintains its buy recommendation and reduces the target price from 1430 to GBX 1420.
  • Republic Services, Inc.: Baptista Research downgrades to underperform from hold with a price target reduced from USD 162.90 to USD 142.60.
  • Shopify Inc.: Daiwa Securities maintains its outperform rating and raises the target price from USD 65 to USD 70.
  • Southwest Airlines Co.: BNP Paribas Exane downgrades to underperform from neutral with a price target reduced from USD 31 to USD 20.
  • Tesla, Inc.: Guotai Junan Securities Co., Ltd. initiates an overweight recommendation with a target price of USD 248.20.
  • The Hershey Company: Baptista Research upgrades to buy from hold with a target price reduced from USD 253 to USD 235.
  • The Trade Desk, Inc.: Baird maintains its outperform rating and reduces the target price from USD 88 to USD 85.
  • Tradeweb Markets Inc.: Redburn Atlantic maintains its buy recommendation and raises the target price from USD 94 to USD 108.
  • United Airlines Holdings, Inc.: BNP Paribas Exane maintains its outperform recommendation and reduces the target price from USD 82 to USD 66.
  • Unity Software Inc.: CICC maintains its outperform rating and reduces the target price from USD 49 to USD 41.
  • Valero Energy Corporation: Baptista Research upgrades to buy from hold with a price target raised from USD 138.90 to USD 158.40.
  • Veeva Systems Inc.: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 244 to USD 216.
  • Vodafone Group Plc: Societe Generale maintains its sell recommendation and reduces the target price from GBX 75 to GBX 70.
  • Vulcan Materials Company: Baptista Research downgrades to hold from outperform with a price target reduced from USD 249.50 to USD 235.
  • W. P. Carey Inc..: JMP Securities upgrades to market perform from under review.
  • W.W. Grainger, Inc.: Baptista Research downgrades to underperform from hold with a price target reduced from USD 793 to USD 696.
  • Wheaton Precious Metals Corp.: Berenberg maintains its buy recommendation and raises the target price from GBX 4700 to GBX 5000.