It’s been roller-coaster. Wall Street was in pretty bad shape before a mid-session trend reversal, which allowed the three major indexes to close in the green, with gains ranging from 0.3% for the Dow Jones to 0.6% for the Nasdaq. Bloomberg tells me that this is the biggest reversal in a session since February for the S&P500, which has indeed been more bullish.
But what happened? The spark that sent Wall Street up is Mitch McConnell. The senator from Kentucky, leader of the Republicans in the upper house, proposed to shift the deadline for raising the US debt ceiling to December, instead of mid-October.
This outstretched hand from the Republicans - who themselves have raised the debt ceiling three times during Donald Trump's term in office - is not the only factor easing markets today. In China, the Evergrande shockwave seems to be subsiding, with capital transactions under negotiation. In addition, it was announced that a call between Joe Biden and Xi Jinping will be scheduled by the end of the year. On the energy front, the United States has officially announced that it is considering using its strategic reserves to ease tensions on oil prices. At the same time, Vladimir Putin helped deflate a new speculative surge in gas prices yesterday, by raising the possibility of increasing Russian gas deliveries to Europe. He called for new agreements with his national champion Gazprom. Angela Merkel seized the opportunity to point out that Russia keeps its commitments and that tensions are also the fault of the Europeans, who may not have sufficiently anticipated their orders.
Finally, rumors are circulating that the ECB is planning to deploy a new bond repurchase program to take over from the exceptional program designed to counter the effects of the pandemic, which is to be gradually deconstructed. It would complement the 2015 €20bn per month quantitative easing (QE) program, which has never been extinguished. The rumor comes from Bloomberg, which states that the plan is intended to ensure that the end of the extraordinary support measures will go smoothly. It would be like replacing buyback with buyback. Just business as usual.
That's how life is on the financial markets. Investors have been crushed by the weight of bad news for the past week, and now they are smiling again thanks to this series of positive announcements.
In other news, the number of Americans filing new claims for jobless benefits fell last week, but layoffs increased in September, partly due to hospitals firing unvaccinated staff. They dropped by 38,000 to 326,000 for the week ended Oct. 2, against 348,000 applications expected in a Reuters survey.
Today's Economic Highlights:
The two main indicators today are the Challenger survey on September layoffs in the United States and the new weekly US unemployment claims. This morning, Germany reported a drop in industrial production in August.
The dollar is worth EUR 0.8654, while the ounce of gold remains stuck in the USD 1750 to USD 1760 area. Oil is easing to USD 80.65 per barrel of Brent and USD 76.80 per barrel of WTI. Bond yields have stabilized around 1.53% for the US 10-year and -0.18% for its German counterpart. Bitcoin is flirting with USD 55,000 again.
* Apple - The Dutch competition authority said Apple's scheme requiring software developers to use its own payment system was anti-competitive and ordered it to make changes, four people close to the case told Reuters.
* General Motors said on Wednesday it plans to double its revenue by 2030, relying on a combination of combustion engines, new electric models and digital services to compete with Tesla.
* Twitter announced Wednesday that it sold mobile advertising group MoPub to Applovin for $1.05 billion
* Goldman Sachs - Japanese oil company Eneos Holdings plans to buy Japan Renewable Energy for about 200 billion yen from Goldman Sachs and Singapore's sovereign wealth fund GIC, the Nikkei daily reported.
* Conagra Brands gained 1.5% in premarket trading after reporting better-than-expected first-quarter sales on Thursday.
* Moderna - Finland on Thursday suspended the use of Moderna's Covid-19 vaccine for young men following a study of a slightly higher risk of developing myocarditis after an injection.
* Tilray erased its pre-market gains as the Canadian cannabis producer widened its first-quarter net loss.
* Levi Strauss gained 4.5% in pre-market trading after the company reported third-quarter sales and earnings above market expectations on Wednesday as demand picked up.
* Dotdash, the digital media arm of IAC, announced Wednesday that it has completed the acquisition of newspaper publisher Meredith, which owns People magazine, among others, in a deal valued at about $2.7 billion.
- Britvic: Berenberg remains Buy with a price target raised from GBp 900 to GBp 1050.
- Centrica: Morgan Stanley upgrades to Overweight targeting GBP 75.
- Delta Air Lines: Wolfe Research downgrades to peerperform from outperform
- Discover Financial Services: Evercore ISI adjusts pt to $132 from $127, maintains in line rating
- DoorDash : Truist Securities adjusts pt to $250 from $220, keeps buy rating
- East West Bancorp: Wells Fargo Securities upgrades to overweight from equal-weight. PT up 21% to $95
- EasyJet: Exane BNP Paribas resumes its Outperform rating with a target of GBP 900.
- Essex Property: J.P. Morgan raised the recommendation to overweight from neutral. PT up 9.2% to $359
- Five Below: Morgan Stanley upgrades to overweight from equal-weight. PT up 31% to $230
- Oxford Instruments: Jefferies remains in the hold category with a price target raised from GBp 2,415 to 2,445.
- The PNC Financial Services group: Evercore ISI adjusts price target to $230 from $211, maintains outperform rating
- Schlumberger: J.P. Morgan raised the recommendation on Schlumberger NV to overweight from neutral. PT up 24% to $37
- Southwest Airlines: MKM Partners adjusts pt to $65 from $67, maintains buy rating
- Teradyne: D.A. Davidson & Co raised the recommendation on Teradyne Inc. to buy from neutral. PT up 28% to $140
- United Airlines: MKM Partners adjusts pt to $58 from $59, maintains neutral rating
- SVB Financial: Evercore ISI adjusts pt to $689 from $599, maintains in line rating
- Wells Fargo: Evercore ISI adjusts price target to $54 from $49, maintains outperform rating