This comes after the three main U.S. stock indexes rallied on Friday to score weekly gains after reassuring comments from several Fed policymakers that called for smaller rate hikes.

Obviously, this week is important, but the stock market is not going to crumble or double over the next months because of what is going to happen in the coming days. However, it's reasonable to think that it will take a nosedive or resume its rebound after the publication of data and decisions.

And the rest of March also includes quite a few important events, with US inflation data for February unveiled on Tuesday March 14, while the Fed will announce its next monetary policy decision on Wednesday March 22.

The fate of equity markets remains intimately tied to the path of U.S. monetary policy. Investors seem to have decided to keep rates high for longer, so the fear has shifted to the risk of further rate hikes beyond what is projected. That's why the statistics of the coming days and the measures that will be decided by the Fed are so important.

These fears did not stop Western equity markets from resuming their ascent last week, after a difficult February. MSCI regional indices gave gains of 2% in the US, 1.7% in emerging markets, 1.6% in Japan and 1.4% in Europe. The rise was concentrated at the end of the week, especially on Friday. At the same time, the fall in bonds and the associated rise in their yields ended on Friday. The yield on 10-year U.S. debt fell sharply from 4.05% to 3.94%. This somewhat unexpected easing helped to reinforce the rebound in risk assets.

Meanwhile, China set an economic growth target of about 5% for 2023, with military spending growing at 7.2%. This target is considered disappointing by the market. It is also weighing on the price of some commodities this morning.

In premarket trading, the three main Wall Street indexes remained subdued, as investors adopt a wait-and-see attitude before Powell’s testimony.

 

Economic highlights of the day:

European retail sales and US factory orders are on today's agenda.

The dollar is unchanged at EUR 0.9388 and GBP 0.8329. The ounce of gold is worth USD 1851. Oil is firm, with North Sea Brent at USD 84.87 a barrel and US WTI light crude at USD 78.94. The yield on 10-year US debt is falling back to 3.94%. Bitcoin remains around 22,400 dollars.

 

In corporate news:

* Tesla has lowered prices on its two most expensive electric vehicle models sold in the U.S. by 4% to 9%. The company also announced a U.S. recall of 3,470 Model Y vehicles registered between 2022 and 2023 for potentially loose bolts in the seats, according to a notice issued Saturday by the National Highway Traffic Safety Administration (NHTSA).

* Apple gained 1% in premarket trading after Goldman Sachs upgraded the stock to "buy" with a price target of $199.

* Wall Street-listed Chinese groups Alibaba and PDD Holdings fall 0.9% and 1.3% in premarket trading, respectively, in reaction to China's announcement of a GDP growth target of about 5% this year, a rate below market expectations.

* Several crypto asset stocks, like Coinbase Global, which gave up 4.3% in pre-market trading, were in the red on Monday after Silvergate Capital warned about its ability to continue operations.

* KKR - The board of directors of Italy's Caisse des Dépôts (CDP) approved on Sunday a non-binding offer to buy the telecom operator's fixed-line network, for which the U.S. fund KKR has already bid.

* Goldman Sachs - The U.S. bank's asset management arm is among the suitors to buy U.S. fast-food chain Subway, which is up for sale for an estimated $10 billion, Sky News reported Saturday.

* Biogen and its Japanese partner Eisai announced Monday that the U.S. Food and Drug Administration has granted priority review status to Lecanemab, their Alzheimer's treatment.

* American Airlines, Alaska Airlines and Frontier Airlines have pledged to no longer charge parents extra to ensure that they do not have separate seats for their children when booking flights if they are available, the U.S. Department of Transportation (USDOT) announced Monday.

 

Analyst recommendations:

  • Aston Martin Lagonda: Jefferies remains at Underperform with a price target raised from GBp 120 to GBp 160.
  • Avid Technology: Truist Securities initiated coverage with a recommendation of buy. PT set to $45.
  • D.R. Horton: J.P. Morgan downgrades to neutral from overweight. PT up 10% to $102.50.
  • Eli Lilly: Jefferies initiated coverage with a recommendation of hold. PT down 8.9% to $290.
  • Haleon: Jefferies maintains a Hold rating with a price target reduced from 335 to 330 GBp.
  • Hilton Grand Vacations: Truist Securities raises PT to $75 from $62. Maintains buy rating.
  • InterContinental Hotels: Barclays moves from Overweight to Equal-Weight in line with GBp 6000 target.
  • KB Home: J.P. Morgan downgrades to underweight from overweight. PT down 9.1% to $32.50.
  • Kingfisher: Jefferies upgrades from hold to buy targeting GBp 330.
  • Merck & Co: Jefferies initiated coverage with a recommendation of buy. PT set to $125
  • Nichols: HSBC raised its recommendation to buy from hold. PT up 16% to 1,200 pence.
  • Pfizer: Jefferies initiated coverage with a recommendation of hold. PT set to $43.
  • Rathbones: Jefferies upgrades from Underperform to Hold with a target of GBp 2,000.
  • Ryman Hospitality: Truist Securities raised the target to $115 from $104. Maintains buy rating.