Traders have reduced expectations for at least a 25-basis point cut in March, and currently see a 69% chance, down from around 86% in the last week of 2023, according to the CME FedWatch Tool.

Investors are also anticipating the latest earnings from US banks, with earnings from Bank of America, Wells Fargo, Citigroup and JPMorgan due on Friday.

It's about time companies started releasing results, because it's a little too quiet on markets at the moment. Well, there was still something that stood out: a smart guy who managed to hack the SEC’s X (ex-Twitter) account to announce that the first spot ETFs on bitcoin has been authorized. This potential approval has had the cryptosphere on hedge for several quarters. It is due to reach its epilogue today, as the deadline set by the US stock exchange regulator expires. We’ll have an answer in the next few hours. Wall Street's official endorsement of crypto-currencies - bitcoin is already unofficially endorsed - would have major economic consequences down the road, which we'll talk about another time.

Yesterday, investors rather logically chose caution in the face of weak macroeconomic data. US small business confidence improved a bit but remains below average. European equity markets took a small step backwards after a small step forward the previous day. It is worth noting that healthcare-rich markets such as Copenhagen and Zurich have fared better than others since January 1. US equity markets traded around equilibrium, with the S&P500 down and the Nasdaq 100 up. The Dow Jones underperformed, losing 0.4%, weighed down by Boeing and Chevron. The aircraft manufacturer is still feeling the pinch after the latest B737MAX fiasco, and the oil group has been struggling since oil began its roller-coaster ride. The increasing number of acquisitions I mentioned yesterday has continued unabated, providing some relief, but not enough to fully revive the shares. The latest transaction is the $14 billion takeover of Juniper Networks by Hewlett Packard Enterprise.

Let’s come back to inflation data. Investors' and the media's obsession with inflation is not really overdone, at least not if the statistic helps settle the question that has been dogging the market for the past few days: will the Fed start cutting rates in March, May or June? The data will probably move the cursor a little in one direction or the other, or keep it at current levels, in the absence of new information. Economists believe that, for reasons of comparability, annual US inflation will strengthen a little, rising from 3.1% in November to 3.2% in December. Any deviation from this expectation will trigger a reassessment of the outlook for key rates. And, as is often the case, the devil will be in the detail, in terms of components and core inflation, for example.

But that's for tomorrow. Today's session could therefore be a case of wait-and-see, with few macroeconomic indicators. Staying on the inflationary theme, doubts are growing about the impact of the rerouting of world trade out of the Suez Canal, due to the Houthi attacks. Shippers are beginning to complain about the rate hikes imposed by ocean carriers such as AP Moller Maersk and Hapag-Lloyd to take account of the increased risk and longer shipping routes. This is unlikely to improve fast-fashion's carbon footprint ahead of the spring collections, since the industry is a major consumer of air travel. As for the impact on prices, this has yet to be determined, but it probably won't be neutral. To conclude on macroeconomics, the World Bank has announced that it expects the global economy to grow by 2.4% this year, which is lower than in 2023 (2.6%) and the average for the ten pre-covid years (around 3.1%). The landing is therefore confirmed. It remains to be seen how gently.

In Asia Pacific this morning, Japan was unstoppable (+2% for the Nikkei 225) and Hong Kong depressing (-0.7% for the Hang Seng). South Korea is still losing ground (0.6%) and Australia is reversing course (-0.7%). India is hovering around equilibrium. European markets are bearish.

Today's economic highlights:

French industrial production and US wholesale inventories are on the agenda today.

The dollar is down 0.1% to EUR 0.9138 and GBP 0.7854. The ounce of gold is stable at USD 2030. Oil rises slightly, with North Sea Brent at USD 78.57 a barrel and US light crude WTI at USD 73.31. The yield on 10-year US debt is stable at 4.02%. Bitcoin is trading at USD 45,000.

In corporate news:

  • Hewlett Packard Enterprise announced on Tuesday evening that it was buying network specialist Juniper Networks for $14 billion to enhance its artificial intelligence (AI) offering. Juniper shares gained 1.3% in premarket trading on Wednesday, after jumping 21.8% the previous day on the first news of the deal.
  • Boeing met its airliner delivery targets and recorded a 70% increase in net orders in 2023, reflecting the recovery in air transport. Its European rival Airbus, however, remained the world's leading aircraft manufacturer for the fifth year running.
  • Tesla launched a restyled version of its Model 3 sedan in North America on Wednesday and kept prices unchanged, the automotive group's website and a message posted on the social network X (formerly Twitter) show.
  • Intel announced on Tuesday its intention to offer artificial intelligence (AI) versions of its chips to the automotive sector, in order to compete with Qualcomm and Nvidia.
  • Amazon is set to cut 35% of the workforce in its Twitch streaming division, or around 500 people, Bloomberg reported on Tuesday, citing sources close to the group's plans.
  • Ares is close to completing fundraising for a record €20 billion direct lending vehicle, according to a Bloomberg News report.
  • Surgical - The manufacturer of surgical robots was up 5.41% before the opening, as the company forecast fourth-quarter sales of $1.93 billion, compared with estimates of $1.87 billion.
  • P3 Health Partners - The healthcare management company rose 8.9% before the open, with the group forecasting sales of $1.45 to $1.5 billion for fiscal 2024, against estimates of $1.42 billion.

Analyst recommendations:

  • American Express Company: BMO Capital Markets downgrades to underperform from market perform with a price target reduced from USD 188 to USD 157.
  • Apple: Redburn Atlantic downgrades to neutral from buy with a target price of USD 200.
  • Block: BNP Paribas Exane maintains its outperform rating and raises the target price from USD 75 to USD 95.
  • Canadian National Railway Company: Barclays maintains its equalweight recommendation and raises the target price from CAD 155 to CAD 170. CIBC Capital Markets downgrades to neutral from outperform with a target price of CAD 176.
  • Capital One Financial Corporation: BMO Capital Markets downgrades to market perform from outperform with a price target reduced from USD 128 to USD 124. RBC Capital maintains its sector perform recommendation and raises the target price from USD 107 to USD 140.
  • Citigroup: BMO Capital Markets downgrades to market perform from outperform and reduces the target price from USD 66 to USD 57.
  • Compass Group: RBC Capital upgrades to outperform from sector perform with a price target raised from GBX 1925 to GBX 2400.
  • Dcc: RBC Capital downgrades to sector perform from outperform with a price target raised from GBX 5500 to GBX 5700.
  • Discover Financial Services: Barclays maintains its equalweight recommendation and raises the target price from USD 99 to USD 124. RBC Capital maintains its outperform rating and raises the target price from USD 108 to USD 130.
  • Dow: Deutsche Bank downgrades to hold from buy with a target price of USD 58.
  • Duke Energy Corporation: RBC Capital upgrades to outperform from sector perform with a price target raised from USD 101 to USD 113.
  • Etsy: Goldman Sachs downgrades to neutral from buy with a price target reduced from USD 84 to USD 80.
  • Exelon Corporation: Mizuho Securities upgrades to buy from neutral with a price target raised from USD 36 to USD 39.
  • Fair Isaac Corporation: Baird maintains a neutral recommendation with a price target raised from USD 935 to USD 1264.
  • Fortinet: Morgan Stanley maintains its overweight rating and raises the target price from USD 60 to USD 77.
  • Fiserv: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from USD 120 to USD 156.
  • Gsk: Deutsche Bank maintains its buy recommendation and raises the target price from GBX 1700 to GBX 1850.
  • Goldman Sachs: BMO Capital Markets downgrades to market perform from outperform with a price target reduced from USD 421 to USD 357.
  • Informa: Berenberg maintains its buy recommendation and raises the target price from GBX 850 to GBX 975.
  • Intertek Group: RBC Capital upgrades to outperform from sector perform with a price target raised from GBX 3900 to GBX 4700.
  • Lyondellbasell Industries: Deutsche Bank downgrades to hold from buy with a target price of USD 105.
  • Oneok: Wolfe Research upgrades to peerperform from underperform.
  • Palo Alto Networks: Morgan Stanley maintains its overweight rating and raises the target price from USD 304 to USD 375.
  • Pinterest: Goldman Sachs maintains its buy recommendation and raises the target price from USD 33 to USD 42.
  • Quanta Services: KeyBanc Capital Markets initiates sector weight on the stock.
  • Raymond James Financial: JP Morgan upgrades to overweight from neutral with a price target raised from USD 110 to USD 135.
  • Rollins: Zacks downgrades to neutral from outperform with a price target reduced from USD 50 to USD 47.
  • Rocket Companies: Barclays maintains its underweight recommendation and raises the target price from USD 6 to USD 9.
  • Charles Schwab : Citi downgrades to neutral from buy with a price target reduced from USD 75 to USD 70.
  • Snap: Goldman Sachs maintains a neutral recommendation with a price target raised from USD 7 to USD 15. Morgan Stanley maintains its underweight recommendation and raises the target price from USD 7 to USD 13.
  • Solaredge Technologies: Morningstar upgrades to hold from sell with a target price of USD 75.
  • Southwest Airlines Co: Susquehanna maintains a neutral recommendation with a price target raised from USD 23 to USD 30.
  • Synchrony Financial: BMO Capital Markets downgrades to market perform from outperform with a price target reduced from USD 54 to USD 40. RBC Capital maintains its sector perform recommendation and raises the target price from USD 33 to USD 41.
  • United Airlines Holdings: Susquehanna upgrades to positive from neutral with a price target raised from USD 40 to USD 60.
  • Wise: Berenberg initiates a Buy recommendation with a target price of GBX 1140. BNP Paribas Exane upgrades to outperform from neutral with a price target raised from GBX 780 to GBX 1100.
  • Workday: D.A. Davidson downgrades to neutral from buy with a target price of USD 300.