Today on Wall Street: Can the bull market last?

09/13/2021 | 10:27am

All Wall Street indexes are up today, recovering from last week’s strong losses. Investors are struggling to find ways to improve on already copious gains in 2021. Several indexes are stagnating around a 20% gain, such as the S&P500 and the Nasdaq.

This kind of double-digit increase would have been perfectly satisfactory a few years ago. But in an age of constant headlong rush and triple-digit asset gains, this string of five down sessions on Wall Street is almost as incongruous as a multi-billionaire without a spaceship.

Right now, investors are wondering if the endless bullish economic cycle they envisioned is likely to be thwarted by the sum of small signals flashing orange. Clouds have been gathering on the horizon, but they have not yet aggregated. Will they dissipate or become more threatening? That is the question central banks must ask themselves to set the right economic and monetary tempo.

The next key date on the calendar is September 22, when the Fed will take stock of its asset purchase program, probably to announce that the envelope will be reduced starting in November. Investors seem to be well aware of this schedule. In fact, the relatively close announcement from the ECB last week did not upset anyone.

To wait until the 22nd, there are several monthly indicators to watch this week. Three in the US, inflation (Tuesday), industrial production (Wednesday) and retail sales (Thursday). And two in China, industrial production and retail sales (Wednesday). Economists expect them to be weak, but that doesn't mean the impact on the markets will be negative: investors may find that such data would help calm inflationary pressures, or even push central banks to continue supporting activity. Market psychology at its best.

Meanwhile, investors are keeping an eye on Democratic lawmakers that are considering proposing a capital gains tax increase to 25%, lower than President Biden's desire, and a 26.5% corporate tax rate.

In China, the authorities are continuing their crusade by promising to clean up the electric vehicle sector, which is too congested for their liking, and by splitting up Alipay's credit business.

 

Economic highlights of the day:

There are no major indicators scheduled for today.

The dollar strengthened slightly to EUR 0.8475, while the ounce of gold did not benefit much from the rise in risk aversion, at USD 1792 per ounce. Oil is calming down after a rally that brought WTI to the doorstep of USD 70.90 and Brent to around USD 73.84. In the sovereign debt market, the yield on the US 10-year bond is at 1.33%, while the Bund is stable at -0.33%. Bitcoin lost 3% and fell back below USD 45,000.

 

On markets:

* Uber - Un tribunal néerlandais a jugé lundi que les chauffeurs de VTC du groupe américain devaient être considérés comme des employés et non comme des sous-traitants indépendants, une nouvelle victoire judiciaire pour les syndicats.

* Alibaba - L'action du groupe chinois cotée à Hong Kong a perdu 4,23% lundi après un article du Financial Times selon lequel Pékin envisage de démanteler Alipay, la très populaire application mobile d'Ant Group, filiale de paiements du groupe, et la décision du ministère de l'Industrie et des Technologies de l'information d'interdire aux groupes de hautes technologies de bloquer les liens vers leurs concurrents sur leurs sites internet, pratique très répandue en Chine. Le titre coté à New York abandonne 1,5% en avant-Bourse.

* Apple - Epic Games, l'éditeur du jeu vidéo Fortnite, a annoncé dimanche son intention de faire appel de la décision rendue vendredi par un juge fédéral américain dans le dossier qui l'oppose à Apple. Le titre Apple gagne près de 1% dans les transactions en avant-Bourse après avoir chuté de 3,3% vendredi.

* KKR - Le fonds d'investissement américain a offert lundi de racheter l'armateur norvégien Ocean Yield pour 7,2 milliards de couronnes norvégiennes, soit environ 703 millions d'euros.

* Kansas City Southern a annoncé dimanche son intention d'accepter l'offre d'achat soumise par Canadian Pacific Railway, qui le valorise à 27,2 milliards de dollars, la jugeant supérieure à celle de Canadian National Railway, d'un montant global affiché pourtant supérieur (29,6 milliards).

* Walt Disney a annoncé vendredi que les sorties de films prévues d'ici la fin de l'année auraient lieu exclusivement en salles, donc avant leur mise à disponibilité sur ses plates-formes de vidéo à la demande.

* ViacomCBS est en train de procéder à une restructuration des activités de production pour le cinéma et la télévision de sa filiale Paramount Pictures, a rapporté dimanche le Wall Street Journal.

* Pfizer - La décision des autorités sanitaires américaines sur la demande d'autorisation du vaccin de Pfizer et BioNTech pour les enfants de cinq à 11 ans pourrait être rendue d'ici la fin octobre, a-t-on appris vendredi de deux sources proches du dossier.

* Coinbase a annoncé lundi envisager de lever environ 1,5 milliard de dollars via une émission obligataire afin de financer le développement de nouveaux produits et d'éventuelles fusions-acquisitions.

* Carlyle envisage de céder pour six milliards de dollars ou d'introduire en Bourse la société de conditionnement Novolex Holdings qu'il a rachetée il y a plus de quatre ans, a rapporté dimanche l'agence Bloomberg, citant des personnes proches du dossier.

* Itamar - L'action du fabricant israélien d'appareils médicaux coté au Nasdaq bondit de 43% en avant-Bourse après l'annonce de son rachat par l'américain ZOLL Medical pour environ 538 millions de dollars.

 

Analyst recommendations:

888 Holdings: Berenberg remains Buy with target price raised from GBP 470 to GBP 600.
Alphabet: Goldman Sachs reinstated coverage of Alphabet Class A at buy. PT up 19% to $3,350
Amazon: Goldman Sachs reinstated coverage with a recommendation of buy. PT lifted 23% to $4,250
Berkeley: Jefferies remains Buy with target price raised from GBp 6051 to GBp 6182.
Booking: Goldman Sachs reinstated coverage with a recommendation of neutral. PT down 3.2% to $2,230
Cairn Energy: Berenberg upgrades from buy to hold with a target of GBP 215.
EasyJet: Berenberg remains in the hold category with a price target reduced from GBp 930 to GBp 720.
Expedia: Goldman Sachs reinstated coverage of Expedia Group Inc. Class A with a recommendation of buy. PT up 27% to $185
Facebook: Wolfe Research starts coverage with a recommendation of outperform. PT up 17% to $550
Gamma Communications: Jefferies upgrades to underperform from hold with a GBp1550 target. 
Lyft: Goldman Sachs reinstated coverage of Lyft Class A with a recommendation of buy. PT raised 28% to $64
Netflix: Goldman Sachs reinstated coverage with a recommendation of neutral. PT down 1.5% to $590
Snap: Goldman Sachs reinstated coverage of Snap Class A at  buy. PT up 21% to $90
Twitter: Goldman Sachs reinstated coverage of Twitter Inc. with a recommendation of sell. PT down 2.5% to $60
Tyler Tech: Wolfe Research initiated coverage of Tyler Technologies with a recommendation of outperform. PT up 17% to $550
Uber: Goldman Sachs reinstated coverage at buy. PT jumps 60% to $64
Vector Group: Barclays downgrades to underweight from equal-weight. PT down 9.5% to $13

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