Powell confirmed that the priority is to fight inflation and reduce the Fed's balance sheet. But he did not seem to want to accelerate the process, which is a bit contrary to recent statements from some of his followers and the content of the minutes of the last central bank meeting. Investors had feared more offensive comments that would have reinforced fears of a rapid rate hike and a forced reduction of the support plan. As a result, the Fed's boss continues to give the impression that the Fed's mandate also includes raising equity markets with full employment and controlling inflation.
In addition, the U.S. inflation data was not as bad as feared. Yes, US consumer price growth rose at the fastest pace in almost four decades in December, at a 7% year-on-year pace exactly. This is higher than the 6.8% rate registered in November and the largest jump since June 1982. But that was in line with expectations, while core CPI was only slightly higher at 5.5%.
The main U.S. indices saw their gains progress this morning after the release of inflation data, the Dow Jones Industrial Average (DJIA) futures contract gained 0.4%, while the broader S&P 500 index was up 0.6 percent. At the same time, the Nasdaq 100 gained 0.9%.
In the bond market, the 10-year U.S. Treasury yield gave up nearly 3 basis points.
Today's economic highlights:
European industrial production for November, US inflation for December and US weekly oil inventories are today’s main indicators. Overnight, China reported lower than expected inflation and producer prices in December.
The dollar is trading at 0.8757. The ounce of gold is up to USD 1823. Oil retreats slightly after the previous day's gains to USD 84.32 for Brent and USD 82.25 for WTI. Slight easing on the yield of the 10-year T-Bond, paying 1.73% (-3 points). Bitcoin stabilized at around USD 43807.
* Apple - The U.S. tech giant's stock gained 0.5 percent in premarket trading as Goldman Sachs said iPhone delivery times suggest supply is now more than meeting demand after last year's supply difficulties.
* Tesla - California authorities are seeking to determine whether Tesla's autonomous driving assistance FSD system qualifies for the state's autonomous vehicle standards, which would require the automaker to disclose information about any accidents involving its cars, the Los Angeles Times reported Tuesday. The stock is advancing 0.2 percent in pre-market trading.
* Morgan Stanley - The U.S. bank will increase by more than 20% the variable compensation granted to its best-performing employees after a year 2021 marked by a strong activity of mergers and acquisitions, several sources close to the file said.
* Citigroup - The U.S. bank announced Tuesday evening that it will withdraw from retail banking in Mexico after 20 years of presence in the country, as part of a strategy review.
* Biogen - The U.S. drugmaker, which has developed an Alzheimer's drug called Aduhelm, was down 7.3% in after-hours trading on Wall Street Tuesday, as the U.S. health agency CMS announced that the Medicare program would only cover treatments for the disease for patients enrolled in a clinical trial. In addition, Piper Sandler lowered its recommendation on the stock to "neutral" from "overweight."
* Novavax - The company's shares rose 1.2% in premarket trading after South Korean authorities gave the green light to its COVID-19 vaccine.
* Dish Network - The satellite TV operator is up 7% in premarket trading after a New York Post report cited five sources as saying it is discussing a merger with rival DirecTV, an AT&T subsidiary.
* Virgin Orbit - Richard Branson's company fell 5.9 percent in pre-market trading after the company announced on Twitter that it had postponed a satellite launch scheduled for Wednesday until Thursday.
* Didi Global - The Chinese VTC giant's stock gained 5% in pre-market trading after a report in the South China Morning Post that the group is expected to list on the Hong Kong stock exchange in the second quarter and simultaneously delist from Wall Street.
* Jefferies Financial Group - The investment bank is down 3.5% in premarket trading, heading for its worst session in nearly two months, after reporting lower-than-expected fourth-quarter earnings per share.
* Exxon Mobil - The energy company announced Tuesday night that it has begun the process of selling its shale gas assets in Ohio's Appalachian Basin. The assets are valued at about $200 million, according to a source close to the matter..
* Block (ex-Square) - Australian deferred payment group Afterpay announced Wednesday that its $29 billion takeover by digital payment company Block had received the green light from the Bank of Spain, the last hurdle for the project, which should therefore be completed on February 1.
- AMD: Barclays raises Price Target to $148 from $135, reiterates Overweight rating
- American Eagle: Cowen downgrades to $31 from $40. Maintains outperform rating.
- Apple: Baird adjusts Price Target to $185 from $170, maintains Outperform rating
- Bancorp: Keefe, Bruyette & Woods initiated coverage with a recommendation of outperform. PT set to $40
- Broadcom: Barclays adjusts PT to $700 from $650, reiterates Overweight rating
- FD Technologies: Berenberg downgrades from hold to sell targeting GBp 1,600.
- Fiserv: Jefferies downgrades to hold from buy. PT up 5.1% to $115
- Flutter: Jefferies remains Buy with target reduced from GBp 19,300 to GBp 16,500
- Globe Life: Piper Sandler upgrades to overweight from neutral. PT up 15% to $117
- Highwoods: Baird upgrades to outperform from neutral. PT up 13% to $53
- Premier Financial Corp.: Piper Sandler downgrades to neutral from overweight. PT up 6.7% to $34
- Southwest Air: Cut to Peerperform at Wolfe
- Snowflake: Barclays upgrades to overweight from equal-weight. PT up 22% to $367
- Take-Two: BMO Capital Markets upgrades to outperform from market perform. PT up 21% to $180
- Wells Fargo: Piper Sandler upgrades to overweight from neutral. PT up 14% to $64
- Wolfspeed: Wells Fargo Securities upgrades to overweight from equal-weight. PT up 19% to $130