Yesterday, the European Central Bank's Governing Council, which met for the first time since the institution adopted its new strategy of targeting inflation "close" to 2%. As expected, the ECB is maintaining its ultra-accommodating course by promising low rates "for a long time". In other words, the ECB will not put away its monetary artillery until inflation stabilizes at 2% on a sustainable basis. As a reminder, ECB economists are forecasting inflation of 1.9% this year, falling to 1.5% in 2022, before falling back to 1.4% in 2023. Therefore, not to mention the uncertainties raised by the spread of the coronavirus variants and its impact on the European economy, the ECB is not about to change course, especially since it now has the option of letting inflation run in line with its new strategy. In short, there is nothing new on the horizon, the ECB is maintaining its dovish tone, contrasting with some of the hawkish speeches from several Fed or BoE officials.
In this context, yesterday's poor economic figures in the US could finally boost morale, by ruling out any risk of overheating. Bad news is often good news on markets, as investors are very wary of seeing central banks reduce their monetary support. Let's stay with statistics, as there will be a slew of them today with the manufacturing and services PMIs.
Corporate earnings have been very good so far. According to data compiled by Bloomberg, more than 85% of the S&P500 companies that reported earnings beat analysts' expectations, even if medium-term forecasts are not always on track. Intel's results, released yesterday after the close of Wall Street, perfectly illustrate this gap between results and guidance. The group exceeded expectations in the second quarter, but is cautious in its forecasts for the second half of the year due to supply constraints.
Today's economic highlights:
June PMI indicators will be released throughout the day, including for France, Germany, the euro zone, the UK and the US.
The USD/EUR pair is stable at EUR 0.8499. The ounce of gold is down to USD 1100%. Oil is rising above USD 73.7 for Brent and USD 71.8 for WTI. The US government bond yield stands at 1.26% over 10 years. Bitcoin hovers around USD 32400.
* Intel loses 3% in pre-market trading after announcing an annual sales target that suggests a weaker fourth quarter, despite raising its full-year revenue forecast. The manufacturer believes the industry could only meet the growing demand for semiconductors within two years.
* Twitter gains 6.3% in pre-market trading after reporting better-than-expected profit growth in the second quarter on Thursday as the U.S. social network rolled out targeted ad improvements.
* Snap is up 17.3% in pre-market trading after reporting better-than-expected second-half revenue and user growth on Thursday, helped by new features in its Snapchat messaging app.
* Didi continued to fall, losing 11 percent before the Wall Street opening after Bloomberg News reported Thursday that Chinese regulators were considering fining it, bringing in a public investor or suspending some of its operations.
* American Express - The payments company reported a second-quarter profit on Friday that beat estimates as consumer spending rose after 18 months of containment.
* Veoneer - The Stockholm-listed company's shares jumped 55% after the Swedish automotive safety products supplier received a $3.3 billion takeover offer from Canadian equipment maker Magna. The group also reported a 116.3% increase in second-quarter sales.
* HoneyWell on Friday reported a 32% increase in quarterly profit, beating expectations, and raised its full-year outlook on the strength of its aerospace division as air traffic recovers from the pandemic-related slowdown.
* Schlumberger gained 1.5% in premarket trading after reporting a rise in second-quarter net income on Friday, as a rebound in crude prices boosted demand for oilfield services and equipment.
* JP Morgan - Executives at the largest U.S. bank said Thursday they plan to hire more than 500 financial advisers over the next five to seven years as the bank aggressively expands its wealth management services.
* Tesla has asked the Indian government to sharply reduce import duties on electric vehicles, a move the automaker says will boost local demand, said two sources familiar with the
Apple: Canaccord Genuity raises its target price from $165 to $175.
Arvinas : Wedbush lifts PT to $113 From $94 , maintains Outperform rating
Aviva: Company gets its only negative rating as Exane downgrades to underperfom from neutral
Biogen : Wedbush raises price target to $314 from $312, maintains neutral rating
The British Land Company: Goodbody cut the recommendation to hold from buy. PT at 525 pence
Centrica: Exane BNP Paribas upgrades to neutral from underperform. PT up 0.8% to 49 pence
Comerica Incorporated : Goldman Sachs adjusts price target to $76 from $77, maintains sell rating
Domino's Pizza: J.P. Morgan cuts to neutral from overweight. PT 1.6% down to $530
Lithia Motors : Goldman Sachs adjusts price target to $416 from $412, maintains neutral rating
Monster Beverage: Citi upgrades to buy with $110 target.
M&T Bank : Evercore ISI adjusts price target to $151 from $154, keeps in line rating
NASDAQ 100 : Goldman Sachs raises PT on Nasdaq to $177 from $172, maintains Neutral rating
Tesla: Credit Suisse is neutral and targets USD 800.
Texas Capital Bancshares : Truist adjusts PT to $77 from $85, maintains Buy tating
The Hershey Company: Deutsche Bank lifted price target to $173 from $166
Unilever: RBC is short and has lowered its target from GBp 3700 to GBp 3600.
Vodafone: Goldman Sachs advises its customers to buy the stock. The target price is unchanged at GBp 180.