Wall Street’s three main indices closed in the green yesterday. The S&P 500 gained 0.1%, the Dow Jones 0.24% and the Nasdaq 100 0.3%. Bond yields retreated sharply following comments by Christopher Waller, America's top central banker. He spoke of the possibility of a rate cut conditional on inflation returning to 2%, which is like valiantly kicking an open door, but the market once again had selective hearing, only registering "rate cut". Investors even decided not to listen to the comments of her sidekick Michelle Bowman, who warned of the possibility of another rate hike. Renowned investor Bill Ackman made it known that he was betting on a rate cut in the US as early as Q1 2024. As he hasn't been talking rubbish recently, his words carry some weight.

Speaking of famous investors, the stock market has just lost one of its finest, Charlie Munger, Warren Buffett's sidekick at Berkshire Hathaway. I won't go into Munger's biography - there are around 750 available as of last night in all languages. But since he was prolific in all kinds of good words and embodied a certain form of wisdom, here are two of his statements: “Invest in a business any fool can run, because some day a fool will,” and “We now have computer algorithms trading with other computers. And people buying stocks who know nothing, being advised by people who know even less. It’s an incredibly crazy situation … All this activity makes it easier for us.”

Elsewhere in the news, China is reportedly planning new, more vigorous measures to save its real estate sector, having so far failed to stop the downward spiral. According to Bloomberg, Beijing is preparing to roll out a financing plan that would underwrite developers' loans, while providing an influx of liquidity at low rates to state-owned banks to help real estate firms. Some economists see this as a kind of quantitative easing program.

US equity futures were up this morning as investors welcomed the dovish comments from Fed officials and Q3 economic growth data. The GDP was revised to 5.2% from 4.9% previously, while a Bloomberg consensus was forecasting 5%. Meanwhile, the trade deficit in goods, also published this morning, increased to $89.84 billion from $86.84 billion in September versus estimates of $86.5 billion. Preliminary wholesale inventories fell 0.2% in October, while a 0.2% gain was expected. In addition, retail inventories remained unchanged last month, compared with estimates for a 0.6% gain.

Investors are now awaiting US PCE inflation and Chinese PMI indicators on Thursday, before Jerome Powell's public speech on Friday, which may enable financiers to validate their hypothesis of an end to rate hikes. Oil prices are rising ahead of tomorrow’s OPEC+ meeting to discuss production quotas.

Economic highlights of the day:

German inflation, new US Q3 GDP estimates, wholesale inventories and DOE oil inventories are on the agenda.

The dollar bounces back a bit to EUR 0.9112 and GBP 0.7881. The ounce of gold is trading at USD 2038. Oil regained ground, with North Sea Brent at USD 82.35 a barrel and US light crude WTI at USD 77.41. The yield on 10-year US debt fell to 4.28%. Bitcoin is trading at around USD 38,000.

In corporate news:

  • Apple will end its credit card partnership with Goldman Sachs Group, the Wall Street Journal reported on Tuesday.
  • Uber announced on Wednesday its intention to open its platform to London cabs next year after ten years of tensions with the sector.
  • Berkshire Hathaway - The succession plan at the investment conglomerate became clearer after the death on Tuesday evening of vice-chairman Charlie Munger at the age of 99, while chairman Warren Buffett was 93.
  • UnitedHealth group announced Tuesday evening that it expects 2024 earnings to be broadly in line with Wall Street expectations, but warned that medical costs are likely to remain high. The health insurance giant expects adjusted earnings per share this year of between $24.85 and $25.00, against a consensus of $24.95.
  • Farfetch - The British daily Telegraph reported on Tuesday that group founder Jose Neves was considering a delisting of the online luxury goods retailer. On Tuesday, Farfetch warned that it would not announce its quarterly results this Wednesday as planned, adding that earnings forecasts were no longer reliable.
  • Netapp climbs 12.6% in pre-market trading after better-than-expected quarterly sales.
  • Gamestop soared 15.1% in premarket trading in high volumes, after having gained 13% the previous day, its best performance in a single session for eight months.
  • Crowdstrike Holdings gained 1.5% in pre-market trading, as the cybersecurity group published a quarterly profit forecast ahead of Wall Street expectations, against a backdrop of resilient demand.
  • Okta fell by 6.4% in premarket trading, as the cybersecurity company reported that hackers had stolen user data from its customer support system during an attack two months ago.
  • Workday gained 5.4% in after-hours trading after raising its full-year sales forecast.

Analyst recommendations:

  • Airbnb, Inc.: Jefferies downgrades to hold from buy with a target price reduced from USD 155 to USD 140.
  • Avalonbay Communities, Inc.: JP Morgan upgrades to neutral from underweight with a target price reduced from USD 201 to USD 194.
  • Barratt Developments Plc: Investec maintains its buy recommendation and raises the target price from GBX 485 to GBX 535.
  • Crowdstrike Holdings, Inc.: Baird maintains its outperform rating and raises the target price from USD 190 to USD 225.
  • Diageo Plc: JP Morgan downgrades to neutral from overweight with a target price of GBP 35.
  • Duke Energy Corporation: JP Morgan maintains a neutral recommendation with a price target raised from USD 98 to USD 101.
  • Electronic Arts Inc.: Redburn Atlantic maintains a neutral recommendation with a price target raised from USD 135 to USD 150.
  • First Solar, Inc.: Daiwa Securities maintains its outperform rating and reduces the target price from USD 220 to USD 170.
  • Intuit Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 570 to USD 660.
  • Legal & General Plc: Deutsche Bank upgrades to buy from hold with a price target raised from GBX 290 to GBX 295.
  • Lowe's Companies, Inc.: Wolfe Research maintains its outperform rating and reduces the target price from USD 263 to USD 220.
  • M&G Plc: Deutsche Bank upgrades to buy from hold with a price target raised from GBX 230 to GBX 250.
  • Mid-America Apartment Community, Inc.: BTIG maintains its buy recommendation and reduces the target price from USD 175 to USD 145.
  • Netapp, Inc.: Barclays maintains its equalweight recommendation and raises the target price from USD 69 to USD 80.
  • Phoenix Group Holdings Plc: Deutsche Bank maintains its hold recommendation and reduces the target price from 630 to GBX 540.
  • Schroders Plc: Morningstar upgrades to buy from dropped coverage with a target price of GBX 470.
  • Splunk Inc.: Truist Securities downgrades to hold from buy with a target price of USD 157.
  • Stellantis N.V.: JP Morgan maintains its overweight recommendation and raises the target price from 21 to EUR 23.
  • Tc Energy Corporation: CIBC Capital Markets maintains a neutral recommendation with a price target raised from 53 to CAD 54.
  • The Allstate Corporation: Evercore ISI maintains its in-line recommendation and reduces the target price from USD 135 to USD 124.
  • The Bank Of Nova Scotia: RBC Capital maintains its sector perform recommendation and reduces the target price from 68 to CAD 62.
  • The Berkeley Group Holdings Plc: Investec maintains its buy recommendation and raises the target price from GBX 4500 to GBX 5160.
  • The Coca-Cola Company: Redburn Atlantic maintains its buy recommendation and raises the target price from USD 68 to USD 70.
  • The Cooper Companies, Inc.: JP Morgan maintains its neutral recommendation with a price target reduced from USD 385 to USD 375.
  • The Sherwin-Williams Company: Berenberg maintains its hold recommendation and raises the target price from USD 249 to USD 256.
  • Ulta Beauty, Inc.: JP Morgan maintains its overweight rating and reduces the target price from USD 526 to USD 505.
  • Walmart Inc.: Wolfe Research maintains its outperform recommendation and raises the target price from USD 170 to USD 181.
  • Willis Towers Watson Public Limited Company: Evercore ISI maintains its in-line recommendation and reduces the target price from USD 246 to USD 233.
  • Workday Inc.: Baird maintains its outperform rating and raises the target price from USD 260 to USD 277.