September 11 holds deep emotional significance, especially since the 2001 terrorist attacks in the United States and the 50th anniversary of the military coup in Chile. These events have shaped our world, highlighting how unexpected historical shocks can alter the playing field. The Russian-Ukrainian conflict, discussed at the recent G20 summit in India, is another example of such events, with uncertain consequences, including the noticeable impact on our daily lives through rising energy prices.
 
Although the G20 summit showcased the increasing influence of major South and East countries, it's unlikely to significantly impact financial markets. Last week, global stock markets mostly declined, though there was a slight rebound on Friday. Current concerns primarily revolve around monetary policies: can central banks, despite high inflation, prevent excessive economic damage? Equity markets still have faith in their ability to do so but react nervously to any signals of potential tightening.
 
The Federal Reserve will announce its policy update next week, with US central bankers observing a period of silence beforehand to quell the ongoing debate. The European Central Bank (ECB) will make its move on Thursday, with economists divided between a rate hike and maintaining the status quo, making this meeting more uncertain than usual.
 
Asian central banks are also in the spotlight, particularly in China, where the People's Bank of China (PBoC) helped the yuan recover from a 16-year low. The central bank's unconventional exchange rate move is a significant signal from an institution known for its stability. The Governor of the Bank of Japan, who has been in office for a few months, recently suggested that the BoJ might end negative interest rates by year-end. Kazuo Ueda emphasized that accommodative policies are still necessary for the time being. However, this message caused the yen to strengthen significantly against the dollar. Some experts believe this unconventional stance may help avoid BoJ interventions in the foreign exchange market to support the yen, and it's ahead of market expectations for a shift towards less exotic monetary policy.
 
Moving on from central banks, the upcoming week's macroeconomic calendar is filled with significant data from the United States: August consumer prices on September 13, followed by producer prices and retail sales on September 14, and concluding with the Empire State and University of Michigan consumer confidence indices on September 15. Investors will also closely monitor China's industrial production and retail sales on Thursday to gauge its economic progress. Over the weekend, Beijing reported an annual inflation rate of 0.1% in August, in line with expectations, while producer prices continued to decline (-3% year-on-year), indicating that China's economic recovery remains uncertain.

There are concerns about the US consumer's outlook, and several financial news outlets have raised alarms on this issue. Last Friday, the US consumer credit data, though often considered less significant, showed a notable decline. Economists are now questioning whether American households might be losing their spending momentum. After dipping into their savings and using credit extensively to sustain their high consumption levels, there's a worry that they may be losing steam.
 
A Bloomberg survey, prominently featured in financial media, delves into this concern from an investor's perspective. The headline, "America's almighty consumer is about to hit a wall, say investors," highlights the worry among financiers that a consumer slowdown could begin in early 2024. This potential slump is attributed to reduced Covid-related savings and higher borrowing costs. It's crucial to keep an eye on this situation, especially if the Federal Reserve is compelled to maintain or even raise interest rates. Central banks continue to be a focal point in the economic landscape.

In Asia Pacific this morning, the week got off to a shaky start. The Nikkei 225 lost 0.5% in Tokyo, while the KOSPI gained 0.3% in Seoul, the ASX200 around 0.4% in Sydney and the SENSEX was up 0.5% in India. In China, while Shanghai gained 1%, Hong Kong returned -0.8%. European leading indicators are moderately bullish, with the CAC40 starting the session up 0.6% at 7,286 points. 

Today's economic highlights

There will be no major macroeconomic indicators today. Full agenda here.

The dollar stabilizes at around 0.9321 EUR and 0.7987 GBP. The ounce of gold is trading around 1925 USD. Oil is stable, with North Sea Brent at 90.21 USD a barrel and US light crude WTI at 86.42 USD. The yield on 10-year US debt rises to 4.29%. Bitcoin rises to 25,600 USD.

In corporate news:

  • Tesla climbs 6.3% in pre-market trading, with Morgan Stanley upgrading its "in-line weighting" to "overweight" on the automaker due to the potential of its Dojo supercomputer, designed to power artificial intelligence (AI) models for autonomous vehicles. The intermediary believes it gives Tesla an "asymmetric advantage" and could boost the group's market capitalization by almost $600 billion, representing a potential upside of 76% and a price target of $400.
  • Meta Platforms is working on a new artificial intelligence (AI) system intended to be as powerful as the most advanced model proposed by OpenAI, the creator of ChatGPT, the Wall Street Journal reported on Sunday.
  • Boeing gained 1% in pre-market trading, as the White House announced that the aircraft manufacturer was close to signing an agreement with Vietnam Airlines for an order of 50 Boeing 737 Max jets worth $7.8 billion.
  • Alibaba, whose shares were down 3% on the Hong Kong Stock Exchange on Monday, could be volatile in New York after the surprise announcement that the group's former CEO, Daniel Zhang, is leaving to head the cloud computing arm, which is to be spun off next year. Analysts are divided on the impact of this departure, with some believing it offers the Chinese e-commerce giant an opportunity to "wipe the slate clean", and others that it could weigh on the share price in the short term.
  • JM Smucker, the maker of Jif peanut butter, is close to signing a deal to buy Hostess Brands, the owner of Twinkies cupcakes, for nearly $5 billion. Hostess Brands jumped 6.7% in pre-market trading.
  • Goodyear Tire & Rubber gave up around 1% in after-hours trading after announcing a plan to cut 1,200 jobs in Europe, the Middle East and Africa.

Analyst recommendations:

  • Amcor plc: Zacks maintains a neutral recommendation with a reduced target price of $9.75.
  • Bank of america: Odeon Capital Group LLC maintains a hold recommendation with a reduced target price of $28.
  • Broadcom: Bernstein maintains its outperform rating and raises the target price from USD 875 to USD 1000.
  • Church & dwight: Evercore ISI maintains its in-line recommendation with a target price increase from USD 100 to USD 105.
  • Eqt corp: Truist Securities maintains a hold recommendation with a revised target price of USD 39.
  • Equinix: Zacks maintains a neutral recommendation with a reduced target price of USD 822.
  • Equity residential: Evercore ISI maintains its outperform rating with a reduced target price of $70.
  • General motors c: Zacks maintains its outperform rating with a reduced target price of USD 34.
  • Halliburton: Piper Sandler & Co maintains its overweight rating with a target price raised from 46 to USD 56.
  • Ingersoll-rand: Zacks maintains its outperform rating with a target price raised from 79 to USD 80.
  • International paper: Sadif Investment Analytics maintains its hold recommendation on the stock with a revised target price of USD 30.
  • Intuit: Piper Sandler & Co upgrades to overweight from neutral. PT up 21% to USD 642.
  • Kenvue: Deutsche Bank maintains its hold recommendation with a target price of USD 27.
  • Kraft heinz: Sadif Investment Analytics maintains its buy recommendation on the stock with a revised target price of USD 39.
  • Kroger: JP Morgan downgrades to neutral from overweight. PT reduced from USD 56 to USD 54.
  • M&t bank corp: RBC Capital downgrades to hold from outperform. PT reduced by 8.6% to USD 160.
  • Marvell technology: Zacks maintains a neutral recommendation on the stock with a reduced target price of $59.
  • Procter & Gamble: Evercore ISI maintains its outperform rating with a slightly reduced target price of $174.
  • Transunion: Sadif Investment Analytics maintains its hold recommendation on the stock with a revised target price of USD 78
  • Zebra technology: Sadif Investment Analytics maintains its strong buy recommendation on the stock with a reduced target price from USD 309 to USD 431.