A Reuters consensus expects that U.S. consumer prices will rise to 8.5% in March year-on-year, due to higher energy prices.

Investors are also worried about the new wave of coronavirus in China. On the scale of the country's population, the contamination figures look very low. But the policy of systematic isolation is creating major disruptions, as more than 7,500 areas are closed, including major urban centers. The population is clearly impacted by the situation, which is causing shortages of certain medicines and food. Overnight, China's March consumer and producer price data exceeded expectations, adding to the negative sentiment. Chinese markets are paying the price this morning with heavy contractions in Shanghai and Hong Kong.

On Wall Street, many investors are talking about a "Dudley moment". The economist and former Fed vice-chairman had warned in December 2020 that inflation would soar and that if the Fed was too slow to react, it would be forced to use brutal action to catch up. Obviously, Bill Dudley's scenario seems to be coming true and he is more listened to now than he was then. He now thinks that a recession is inevitable.

For Bank of America, the question is how long Atlas can withstand the pressure. Atlas is the American consumer, according to the bank. "The Fed is belatedly addressing inflation and imbalances, but Atlas is being hit by inflation and soon by rates…"

 

Economic highlights of the day:

No major indicators are expected today.

The dollar/euro remains unchanged at EUR 0.9185. The ounce of gold rallies to USD 1955. Oil is stabilizing with North Sea Brent just below USD 98.15 a barrel and US WTI light crude at USD 93.70. US 10-year debt yields rise to 2.77% over 10 years. Bitcoin rallies slightly to USD 41,100 a unit.

 

On markets:

* Twitter announced on Sunday that Elon Musk had rejected the proposal made to him to join the board of directors of the social network after becoming its first shareholder. In pre-market trading, the stock is down 4%.

* The global online retail giant Amazon on Friday called for a new vote by employees at a New York warehouse that approved the creation of the first union in the group's history. The company's management accuses the Amazon Labor Union of influencing the vote.

* Pfizer announced the appointment of David Denton, who currently serves as CFO of home improvement retailer Lowe's, to the position of CFO.

* Cyber security group Sailpoint Technologies announced Monday that it has been acquired by private equity firm Thoma Bravo in a deal valued at $6.9 billion. The stock jumped 29.5% in pre-market trading.

* Apple has launched production of the iPhone 13 in India, the U.S. group announced Monday, seeking to reduce its dependence on the Chinese supply chain.

* Warner Bros Discovery is set to debut on the Nasdaq on Monday after the completion of the merger between WarnerMedia, which includes AT&T's media operations, and Discovery. JP Morgan upgraded its coverage of AT&T to "overweight," saying the U.S. company can now refocus on its telecommunications business.

* Goldman Sachs announced Monday that it has completed the acquisition of asset manager NN Investment Partners from NN Group for 1.7 billion euros.

* Curevac and GSK announced on Monday that they have signed a five-year contract with the German government to ensure the rapid supply of mRNA vaccines in the event of a public health emergency. CureVac is up 2.8% in pre-market trading.

 

Analyst recommendations:

  • A.G. Barr: Berenberg upgrades from hold to buy, targeting GBp 660.
  • American Express: J.P. Morgan downgrades to neutral from overweight. PT up 8.9% to $200.
  • Epam Systems: Wolfe Research upgrades to outperform from peerperform. PT up26% to $390.
  • Warner Bros Discovery: Atlantic Equities LLP upgrades to overweight from neutral. PT up 64% to $40.
  • John Wood: Jefferies upgrades from Underperform to Hold with a target of GBp 150.
  • KeyCorp: Jefferies downgrades to hold from buy. PT up 5.9% to $22.
  • London Stock Exchange: Jefferies remains Buy with a price target raised from GBp 8500 to GBp 9800.
  • Match Group: Loop Capital Markets initiated coverage with a recommendation of buy. PT up 39% to $140.
  • Nvidia: Baird cut the recommendation to neutral from outperform. PT down 2.7% to $225.
  • Photronics: Stifel upgrades to buy from hold. PT up 45% to $21.
  • Schlumberger: Piper Sandler upgrades to overweight from neutral. PT up 29% to $55.
  • T. Rowe: Jefferies downgrades to hold from buy. PT up 6.7% to $156.
  • WPP: Goldman Sachs downgrades from buy to neutral with a target of GBp 1235.