Investors can no longer rely on central banks to address their concerns, since they are currently more inclined to act as a Cassandra on inflation. The bullish trend started in May has now vanished, with the Nasdaq 100 closing down 1.3% yesterday.

The time has come for caution. The German business confidence index continued to decline for the third month running, returning to its December 2022 levels. Sentiment will also be on the agenda today, but this time with the Conference Board's US consumer confidence index, to be published at 10.00 am. This is an important marker for the Federal Reserve on the state of consumer spending in the US.

Durable goods orders were just published, showing new orders for US manufactured durable goods rose 1.7% month-over-month in May 2023, against expectations of a 1% decline. This follows a 1.2% rise in April. This is a good sign for the economy and shows that recession is not imminent.

After the release of this data, futures on the main three Wall Street indices moved in the green.

Things are moving quite a bit in acquisitions, since IBM acquired software company Appatio for $4.6 billion, Prologis bought industrial properties from Blackstone for $3.1 billion and asset manager Ares Management purchased PacWest Bancorp assets for $3.5 billion, while UnitedHealth acquired Amedisys for $3.3 billion.

To finish today’s column, Aramco's CEO said he expects a "healthy" oil market for the second half of the year, thanks to the contribution of demand from China and India.

 

Economic highlights of the day:

In the United States, durable goods orders, the Conference Board's consumer confidence index and new housing figures are scheduled, along with the Richmond Fed's manufacturing index. The full macro agenda is here. 

The dollar is down 0.5% against the euro to EUR 0.9020. The ounce of gold rebounds slightly to USD 1927. Oil is little changed, with North Sea Brent at USD 74.16 a barrel and US light crude WTI at USD 69.30. The yield on 10-year US debt climbed to around 3.73%. Bitcoin is still trading above USD 30,000.

 

In corporate news:

  • Lordstown Motors filed for bankruptcy protection on Tuesday and declared itself for sale after the electric truck manufacturer failed to resolve a dispute over a promised investment by Foxconn. The group's shares lost 35.6% before the opening.
  • Robinhood Markets gained 0.9% in pre-market trading, the group having announced on Monday evening that it was laying off 7% of its employees.
  • Walgreens Boots Alliance gained 1.1% in pre-market trading. The group will publish its quarterly results on Tuesday, which are expected to be up year-on-year.
  • American Equity Investment Life  gained nearly 7% in pre-market trading, with private equity group Brookfield close to an agreement to buy the US company.

 

Analyst recommendations:

  • Alphabet: UBS downgrades from buy to neutral but raises its target from 123 to 132 USD.
  • Amgen: Argus remains Buy, but has lowered its target from USD 270 to USD 260.
  • BT Group: UBS downgrades from neutral to sell with a target of GBp 120.
  • Dechra Pharmaceuticals: Stifel downgrades to hold from buy. PT up 6.7% to 3,875 pence.
  • GSK: Intron Health downgrades its Buy recommendation to Hold with a target of GBp 1450.
  • Informa: Berenberg resumes its monitoring with a Buy recommendation and a GBp 820 target.
  • Kellogg: Goldman Sachs upgrades to buy from neutral. PT up 19% to $78.
  • Moderna: UBS upgrades its opinion from neutral to buy but lowers its target from 221 to 191 USD.
  • Roper: Jefferies initiated coverage with a recommendation of buy. PT up 15% to $530.
  • Smiths Group: HSBC initiates coverage with a hold recommendation and a target of GBp 1860.
  • Stewart Information: Keefe, Bruyette & Woods downgrades to market perform from outperform. PT up 7.3% to $45.