The much talked about US recession looks like it’s not gonna happen at all. Nor does the collapse of private debt due to rising interest rates. Nor does the disappearance of cryptocurrencies.

The big event on the financial markets yesterday was the 5% plunge in oil prices. The rise in US inventories this week acted as a catalyst for the realization that global production seems excessive in relation to the economic context. Although weak demand is not good news for the economy, investors quickly concluded that this bodes well for prices, disinflation, and therefore for the easing of monetary policy.

Logically enough, energy stocks took a beating yesterday. This contributed to most European markets closing lower. In the US, the three main indices closed with variations of less than 0.15%, with the S&P500 and Nasdaq up slightly and the Dow Jones down slightly, weighed down by the plunges of Cisco and Walmart, torpedoed for their weak results. The tail end of the earnings season is causing some targeted volatility, but does little to alter the overall trend, which is for investors to let themselves be carried along by the hope of a series of Fed rate cuts next year.

This morning, the market's ranting about Applied Materials' poor figures, The Gap's good ones and Alibaba's fall from grace as it abandons its potentially lucrative plan to spin off its cloud division.

U.S. stock index futures were in the green in premarket trading, still powered by hopes of an end to rate hikes and potential rate cuts next years. Treasury yields continue to fall, with the 10-year US now at 4.43%, when it reached 5% just a few weeks ago.

Investors will assess comments from several Fed officials today, including Chicago Fed President Austan Goolsbee, to get more clues about monetary policy.

In premarket trading, Gap surged 18.4% after posting better-than-expected third-quarter earnings due to easing supply expenses and cost-control measures.

Economic highlights of the day:

On the agenda: a second estimate of European inflation for October and US housing starts and permits for October. The full agenda is here. 

The dollar is down 0.2% against the euro and the pound to EUR 0.9195 and GBP 0.8040. The ounce of gold trades at USD 1991. Oil fell sharply yesterday, but is lightly up today with North Sea Brent at USD 78.44 a barrel and US light crude WTI at USD 73.94. The yield on 10-year US debt is down to 4.43%. Bitcoin is trading at around USD 36,300.

In corporate news:

  • Gap shares soared 20% in premarket trading after reporting better-than-expected results on Thursday evening. However, the group said it expected sales for the current quarter, including the holiday season, to be below estimates.
  • Applied Materials fell by 7.3% in after-hours trading, as the semiconductor equipment maker came under investigation for shipments to Chinese chipmaker SMIC via South Korea in alleged violation of U.S. export rules.
  • Chargepoint Holdings plunges 24% in pre-market trading after the electric vehicle charging network provider lowers its quarterly sales forecast and announces the appointment of Rick Wilmer as CEO, effective immediately.
  • Alibaba falls a further 3.9% in pre-market trading in reaction to the abandonment of plans to list its cloud computing division.
  • Apollo Global Management - Panasonic Holdings said on Friday it was considering selling part of its automotive systems business to funds managed by US private equity firm Apollo.
  • Meta Platforms launched two new artificial intelligence (AI)-based features for video editing on Thursday that could be used for publishing on Instagram or Facebook.
  • Merck & Co - Bayer AG is not liable for allegations arising from certain lawsuits involving talc-based foot powder products it acquired from the U.S. group in a $14.2 billion deal in 2014, Delaware's highest court ruled Thursday.
  • Boeing announced on Thursday evening that Marc Allen, the Group's Chief Strategy Officer, would leave the aircraft manufacturer in 2024.

Analyst recommendations:

  • Air Products & Chemicals, Inc.: Redburn Atlantic downgrades to sell from buy with a price target reduced from USD 346.603 to USD 240.
  • American Express Company: Daiwa Securities maintains its outperform rating and reduces the target price from USD 187 to USD 185.
  • Anglo American Plc: Bernstein maintains its market perform recommendation and raises the target price from 2480 to GBX 2680.
  • Applied Materials, Inc.: Cowen maintains its outperform rating and raises the target price from USD 160 to USD 165.
  • Barclays Plc: HSBC maintains its buy recommendation and reduces the target price from 2.30 to GBP 2.10.
  • British American Tobacco P.L.C.: SBG Securities (Pty) Ltd maintains its buy recommendation and reduces the target price from GBP 32.50 to GBP 32.
  • Burberry Group Plc: Mediobanca downgrades to neutral from outperform with a price target reduced from GBX 2500 to GBX 2100.
  • Cardinal Health, Inc.: JP Morgan maintains a neutral recommendation with a price target raised from USD 101 to USD 112.
  • Copart, Inc.: Morningstar downgrades to hold from sell with a price target raised from USD 42 to USD 45.
  • Crowdstrike Holdings, Inc.: Guggenheim maintains its buy recommendation and raises the target price from USD 191 to USD 228.
  • Dcc Plc: RBC Capital maintains its outperform rating and raises the target price from 5150 to GBX 5500.
  • Elevance Health, Inc.: JP Morgan maintains its overweight rating and reduces the target price from USD 569 to USD 552.
  • Equinix, Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from USD 800 to USD 820.
  • Expedia Group, Inc.: Evercore ISI upgrades to outperform from in-line with a price target raised from USD 135 to USD 200.
  • First Citizens Bancshares, Inc.: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Glencore Plc: BNP Paribas Exane maintains its outperform recommendation and raises the target price from GBX 557 to GBX 600.
  • Humana Inc.: JP Morgan maintains a neutral recommendation with a price target reduced from USD 593 to USD 575.
  • Illumina, Inc.: Daiwa Securities maintains a neutral recommendation with a price target reduced from USD 167 to USD 90.
  • Intuitive Surgical, Inc.: HSBC initiates a Buy recommendation with a target price of USD 318.
  • Laboratory Corporation Of America Holdings: JP Morgan maintains its overweight recommendation and raises the target price from USD 259 to USD 261.
  • Land Securities Group Plc: JP Morgan maintains a neutral recommendation with a price target raised from GBP 6.50 to GBP 6.75.
  • Lloyds Banking Group Plc: Barclays maintains its overweight recommendation and reduces the target price from 0.67 to GBP 0.65.
  • Marks & Spencer Group Plc: Morgan Stanley maintains its overweight rating and raises the target price from GBX 280 to GBX 285.
  • Mastercard, Inc.: Daiwa Securities maintains a neutral recommendation with a price target reduced from USD 420 to USD 415.
  • Mckesson Corporation: JP Morgan maintains its overweight rating and raises the target price from USD 495 to USD 514.
  • Molina Healthcare, Inc.: JP Morgan maintains its overweight recommendation and raises the target price from USD 367 to USD 392.
  • Okta, Inc.: Wells Fargo maintains its overweight rating and reduces the target price from USD 95 to USD 80.
  • Palo Alto Networks, Inc.: DZ Bank AG Research maintains its buy recommendation and reduces the target price from USD 310 to USD 295.
  • Pg&E Corporation: Mizuho Securities maintains its buy recommendation and raises the target price from USD 19 to USD 20.
  • Quest Diagnostics Incorporated: JP Morgan maintains a neutral recommendation with a price target raised from USD 148 to USD 149.
  • Regions Financial Corporation: Wolfe Research maintains its outperform rating and raises the target price from USD 16 to USD 16.20.
  • Roblox Corporation: Wolfe Research upgrades to peerperform from underperform.
  • Ross Stores, Inc.: BMO Capital Markets maintains its outperform rating and raises the target price from USD 127 to USD 138.
  • Spirax-Sarco Engineering Plc: HSBC maintains its hold recommendation with a price target reduced from 100 to GBP 92.
  • The Clorox Company: D.A. Davidson maintains its buy recommendation and raises the target price from USD 152 to USD 162.
  • Visa, Inc.: Daiwa Securities maintains a neutral recommendation with a price target raised from USD 255 to USD 260.
  • Walmart Inc.: Citigroup maintains its buy recommendation and raises the target price from USD 180 to USD 190.
  • Warner Music Group Corp.: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 40 to USD 38.
  • Zoom Video Communications, Inc.: Citi downgrades to neutral from sell with a target price of USD 66.