US markets hesitated for a long time yesterday, but closed not far from the day's highs, allowing all three indices to post a third consecutive session of gains. Overall, the picture quickly reverted to what we have known for months, if not years: we are playing scare tactics, but only briefly, until the appetite for risk returns with a nice little cocktail comprising one-third FOMO, one-third TINA (there is no alternative to the equity markets) and one-third Covid vaccine. In the last 13 months, there has only been one episode of a contraction of more than 5% in the US markets.

Today, let’s look at a year-end tradition on markets, the 2022 predictions. Most financial intermediaries engage in such an exercise, often with the utmost seriousness, to gauge the trajectory of indexes next year.

But 2022 is particularly difficult to predict for managers and investment banks. The start of the pandemic nearly two years ago blurred the vision. It reintroduced equation variables that had long remained buried or unknown. Among them, inflation, the return of a more restrictive monetary cycle, supply chains disruptions or staff shortages.

Bloomberg compiled the expectations of several dozen strategists and realized that expectations for the S&P500 range from 4400 to 5300 points for the end of next year (vs. 4701 points currently). This gap is the second widest in the last ten years after 2011. What are these predictions actually worth? It depends, which means that their reliability leaves something to be desired. The American financial agency notes, mischievously, that last year the most optimistic strategist saw the S&P500 at 4400 points at the end of 2021. 300 points below its current level. But at least it is in the right direction, optimists would say. Poor us, the year is not over, would retort the prophets of doom.

 

Today's Economic Highlights:

In the US today, new jobless claims and October wholesale inventories are on the agenda. In China, consumer price inflation is slower than expected in November, but producer prices are accelerating a bit more than expected.

The dollar is up to EUR 0.8841. The ounce of gold is stagnant at USD 1781. Oil is on the upswing with Brent crude at USD 75.24 and WTI at USD 71.79. The yield on 10-year US debt is rising to 1.51%. Bitcoin remains close to USD 48910 per unit.

 

On markets:

* Gamestop is down 4.2% in pre-market trading after the video game distributor announced that it had received a subpoena from the SEC, the U.S. securities regulator, in August as part of an investigation into trading in its shares.* Halliburton is down 1.3% in the pre-market in the wake of the decline in oil prices.

* Citigroup is down 0.5% in premarket trading ahead of next week's Federal Reserve policy meeting.

* Uber - The European Commission unveiled a proposal Thursday to give people who work through digital platforms like Uber better rights and benefits. The U.S. VTC giant's stock is down 0.6% in pre-market trading.

* Amazon - Italy's competition regulator announced Thursday that it has fined the e-commerce giant 1.13 billion euros for alleged abuse of market dominance.

* Apple - Three top engineers have left Apple's car project to join startups, Bloomberg reported Thursday.

* KKR - Investment funds KKR, Advent, Silver Lake, EQT, Bridgepoint, Apollo, CVC Capital Partners and Bain Capital are among the likely bidders for a stake of up to 20 percent in the trading company that the Ligue de Football Professionnel (LFP) wants to set up to manage the broadcasting rights of French soccer, several sources told Reuters.

* Blackstone plans to float its subsidiary Cirsa on the stock market next year in a deal that could value the Spanish casino operator at up to three billion euros, Spanish newspaper Cinco Dias reported on Thursday.

 

Analyst recommendations:

  • Allison Transmission: Morgan Stanley downgrades to underweight from equal-weight. PT down 17% to $30
  • Brown-Forman: Barclays adjusts PT to $72 from $74, keeps Equalweight rating
  • Biogen: Wells Fargo Securities reinstated coverage  with a recommendation of equal-weight. PT up 6.5% to $250
  • Centamin: Berenberg downgrades from buy to hold with a target of GBp 104.
  • Cincinnati Financial: RBC Capital Markets downgrades to sector perform from outperform. PT up 11% to $130
  • CVR Energy: J.P. Morgan downgrades to underweight from neutral. PT up 15% to $19
  • Diageo: RBC lowers from Sector Perform to Underperform with a target of GBP 3100.
  • Eli Lilly and Company: Wells Fargo starts at Equalweight with $270 price target
  • Gilead Sciences: Wells Fargo starts at Equalweight with $72 price target
  • Marsh & McLennan: RBC Capital Markets downgrade to sector perform from outperform. PT up 5.8% to $183
  • Microsoft: President Capital Management raised the recommendation to buy from neutral. PT up 13% to $380
  • Occidental Petroleum: J.P. Morgan raised the recommendation to neutral from underweight. PT up 27% to $39
  • Penn National Gaming: Union Gaming downgrades to Hold from Buy, sets $60 price target
  • Phillips 66: J.P. Morgan upgrades to overweight from neutral. PT up 29% to $93
  • Polymetal: Morgan Stanley upgrades from Equalweight to Overweight targeting GBp 1650.
  • Tesla: UBS maintains his neutral opinion on the stock. The target price is being increased from USD 725 to USD 1000.
  • United Rentals: Morgan Stanley upgrades to equal-weight from underweight. PT up 11% to $395.
  • Yum: Atlantic Equities upgrades to overweight from neutral. PT up 15% to $151
  • Weibo: Goldman Sachs adjusts pt to $44.50 from $54, maintains neutral rating