Fed Chair Jerome Powell said yesterday that "it is not time yet" to start discussing any change in its monetary policy. It kept interest rates and its bond-buying program unchanged, and was optimistic about the country's economic recovery.

The U.S. central bank passed its test. As expected by economists, the Fed's April meeting did not have too much at stake. All that remained was to avoid a communication faux pas, which Jerome Powell accomplished without much difficulty. The only real inflection in the speech was a more optimistic view of the economic outlook thanks to the pace of vaccination and the job market. But this is not likely to scare the institution, which still believes that the inflation spike will be a non-issue and will not require rate action in the near future. The blue-sky economic scenario that is emerging nevertheless raises the question of the future of the asset purchase program.

In fact, it is the first inflection in this area that investors are watching for, as it will launch a new sequence of monetary policy, which will likely lead to a rate hike cycle. And inevitable adjustments in asset allocation. But to paraphrase a U.S. economist, "we're getting closer, but we're still not there".

The other big story of the day is the first quarter earnings reports from a number of iconic companies. Yesterday, it was Apple and Facebook's turn to enter the fray, with results that clearly appealed to the markets, if we are to believe the fairly sharp positive change in both stocks after the close in the US. Apple is still a bit bothered by  tensions in the semiconductor supply chain. But not as much as Ford, whose stock is floundering at the same time because of the impact of chip shortages. The manufacturer estimates that it could lose up to 50% of its production in the second quarter because of this situation. This gives an idea of how messy the market is right now. Ford's management expects a return to normalcy in 2022 at best, a deadline regularly cited by other players, who for the time being have no more visibility on the return to balance.

On the other hand, these tensions remain very promising for semiconductor manufacturers, from designers of production tools such as ASML or LAM Research to founders such as Taiwan Semiconductor and Samsung and producers such as STMicroelectronics, NXP, Renesas or Melexis. For a summary of industry relations, read this recent article on the tensions between suppliers, OEMs and automakers.
Today's new round of earnings releases includes Amazon.com in the US. So far, the figures are overwhelmingly better than expected, a trend that has largely dominated for several quarters, which is due in particular to a certain caution on the part of analysts in their expectations. This contributes to the positive sentiment that drives investors.

Meanwhile, Biden proposed during a speech to Congress yesterday a $1.8 trillion investment in children, families and education to boost the economic recovery. He has also proposed nearly doubling the tax on investment income, which stunned stock markets last week.

Economic highlights of the day:

In Germany, April unemployment figures were disappointing. March housing sales are also on the agenda. US GDP grew 6.4% in the first quarter. The US has now recovered about 95% of its pandemic-era decline in output.

On markets:

* Apple is up 2.7% in pre-market trading after reporting quarterly revenue and earnings Wednesday that were well above Wall Street expectations and announcing a $90 billion share buyback program amid the 5G-enabled iPhone craze. Goldman Sachs raises its recommendation to "neutral" from "sell."
* Facebook reported better-than-expected quarterly revenue and profit on Wednesday but warned that its growth could suffer from measures announced by Apple to protect iPhone users' data. The stock is up 7.3% in pre-market trading.
* Comcast reported better-than-expected quarterly revenue on Thursday as demand for its internet and mobile services offset weakness in its theme park and movie business.
* McDonald's reported quarterly sales well above market expectations on Thursday, returning to a level of growth not seen since the health crisis.
* Bristol-Myers Squibb reported a worse-than-expected first-quarter profit as sales of its high-margin cancer drugs Revlimid and Opdivo came in lower-than-expected. The pharmaceutical company is down 2.3% in pre-market trading.