The European statistics agency Eurostat confirmed that inflation eased to 2.4% year-on-year in November, down sharply on previous months. The 2% target set by the ECB is well within reach, which raises hopes that rates cuts could come in the region early in 2024.

ECB Governing Council member François Villeroy de Galhau even confirmed today that the ECB is expected to cut rates "at some point" in 2024. He does not rule out a "technical" rebound in inflation in the coming months, but noted that even that would not be enough to "break this fundamental trend towards disinflation".

Meanwhile, the Bank of Japan released its decision today, keeping rates steady at current levels, remaining in negative territory at -0.1%. The BoJ has long been a lone voice on monetary policy, given the absence of inflation in the country for years, at least until the post-Covid era. The market believes it will have to raise rates from next year, starting in April, according to the latest forecasts. It's worth noting that the pressure for swift action has eased since the yen's slide was halted a few weeks ago. In any case, the situation has very little impact on Western equity markets.

San Francisco Fed President Mary Daly said yesterday that cuts in the Fed benchmark rate would probably be appropriate next year, the Wall Street Journal reported. Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee are due to speak later today.

Yesterday, the Nasdaq 100 came very close to breaking its November 22, 2021 record, which had been hit during the session at 16,764.85 points. The figures after the decimal point are important, because the technology index climbed to 16,764.32 points during the session. So we'll have to wait a little longer before we can claim a new ATH (all-time high). Unless, of course, the Nasdaq 100 gave its all yesterday, and the session of December 18 heralds the start of a collapse? Given the current relatively benign environment, there's little chance of a cataclysmic scenario materializing, let's be honest. Wall Street ended yesterday up 0.45% for the S&P500 and 0.64% for the Nasdaq, in stark contrast to European markets, which tended to move backwards, albeit moderately. Only London fared better, buoyed by Vodafone's offer to merge its Italian operations with those of Iliad. It was also buoyed by the resilience of its large contingent of energy stocks.

Among the hottest assets at the start of the week is oil, which is climbing back towards USD 80 a barrel for Brent on the back of the growing number of attacks in the Red Sea, forcing transport ships to turn away and take the outer ring road. However, the United States is building a coalition to secure the area, with support from other Western navies. Around 15% of the world's maritime traffic passes through the Suez Canal, the shortest sea route between Europe and Asia. Tensions in the Gulf of Aden and the Red Sea have succeeded in pushing up the price of black gold, something that OPEC+ restrictions had failed to do recently. Shale oil production in the USA is higher than expected, causing the cartel to lose some of its grip on supply.

In other news, Hunter Biden will be arraigned on January 11 in a tax case in Los Angeles. The son is a big pebble in the shoe of his father, a candidate for his own succession to the White House.

The BoJ's non-event pushed down the yen and led to a sharp rise in the Nikkei 225, which closed up 1.4%. Chinese markets, on the other hand, remained depressed. The Hang Seng lost 1% during the session. Although the Hong Kong index is not at its lowest point of the year, it has lost 16% since January 1, underperforming the MSCI World index by 36%. Yet another annus horribilis for China's largest stock market, which is now on course for a fourth year of decline. South Korea and India were up slightly, while Australia continued to benefit from a recovery in the energy sector, closing up 0.8%. Sydney has risen in 7 of the last 8 sessions. All the main European indices are in the green, and so are Wall Street futures on the Nasdaq, the S&P 5àà and the Dow Jones.

Yields retreated after the BOJ's monetary policy decision and European inflation figures. Investors are now focusing on the release of UK inflation figures tomorrow, followed by US PCE inflation on Friday.

Economic highlights of the day:

The BOJ decision, the eurozone CPI and US building permits and housing starts are on the agenda today.

The dollar is down to EUR 0.9125 and GBP 0.7848. The ounce of gold is firm at USD 2030. Oil is slightly up, with North Sea Brent at USD 77.86 a barrel and US light crude WTI at USD 72.75. The yield on 10-year US debt is 3.90%. Bitcoin is trading just under USD 43,000.

In corporate news:

  • Apple announced on Monday that it was suspending sales of its Series 9 and Ultra 2 connected watches in the United States as of Thursday, due to a patent dispute with MASIMO, is preparing to modify the algorithms of these watches, according to Bloomberg. The group, whose shares are treading water in pre-market trading, intends to preserve this activity, which accounts for $17 billion in sales, Bloomberg adds.
  • Google (Alphabet) has agreed to pay $700 million and allow greater competition on its Play store of smartphone applications, according to an agreement reached to settle an antitrust dispute, the content of which was unveiled Monday by a California court.
  • AbbVie filed suit against startup Adcentrx Therapeutics in California federal court, accusing it of stealing trade secrets to develop competing treatments.
  • Comcast- The group's Xfinity service, which provides video, broadband and telephony offerings, said Monday it had detected suspicious activity during a routine cybersecurity exercise.
  • TSMC said Tuesday that its chairman Mark Liu would retire next year, and that the board had recommended the company's current CEO and vice-chairman, C.C. Wei, as his successor.
  • Archer-Daniels-Midland announced on Monday its intention to acquire Revela Foods, a manufacturer of dairy flavor ingredients. Revela's sales are expected to reach $240 million by 2023.
  • Crinetics Pharmaceuticals gains 10.8% before opening after releasing initial data from an interim phase study for a drug against a rare cancer tumor.
  • Immune Bio falls 15% ahead of opening after the suspension of an interim phase trial for its Alzheimer's drug is extended.
  • Kronos Bio drops 7.53% before the opening, as the company decides not to launch mid-term trials for a new therapy.
  • Livent - Allkem shareholders approved the merger with Livent for $10.6 billion.
  • FMC - The manufacturer of crop protection products announced on Monday that it had launched a worldwide restructuring plan.
  • Accenture shares fell after the IT services provider unveiled lower revenue forecasts for the second quarter, as it expects cautious spending by customers.
  • German airline Lufthansa said it had ordered 40 737-8 MAX jets from Boeing and accepted 60 future purchase options.
  • Enphase Energy announced on Monday that it intends to reduce its worldwide workforce by around 10% as part of a restructuring plan.

Analyst recommendations:

  • American International Group : BMO Capital Markets upgrades to outperform from market perform and raises the target price from USD 72 to USD 83.
  • Amgen : BMO Capital Markets upgrades to outperform from market perform and raises the target price from USD 286 to USD 326.
  • Apollo Global Management : William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Carrier Global : Wells Fargo maintains its equalweight recommendation and raises the target price from USD 50 to USD 63.
  • Convatec Group : HSBC maintains its hold recommendation with a price target raised from 2.10 to GBP 2.20.
  • Enphase Energy : Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 75 to USD 120.
  • Estee Lauder : Consumer Edge Research maintains its equalweight recommendation and raises the target price from USD 118 to USD 148.
  • Gfl Environmental : CIBC Capital Markets maintains its outperform rating and raises the target price from CAD 55 to CAD 57.
  • Lennar : Wolfe Research maintains its outperform recommendation and raises the target price from USD 135 to USD 165.
  • Magna International : CIBC Capital Markets downgrades to neutral from outperform with a price target reduced from USD 70 to USD 63.
  • Netflix : William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Pepsico : JP Morgan downgrades to neutral from overweight with a target price reduced from USD 185 to USD 176.
  • Rocket Companies : Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 9 to USD 11.
  • Rockwell Automation : Wells Fargo upgrades to overweight from equalweight with a price target raised from USD 280 to USD 357.
  • Shopify : Baird maintains its outperform rating and raises the target price from USD 75 to USD 85.
  • Snap : Loop Capital Markets maintains its buy recommendation and raises the target price from USD 14 to USD 21.
  • Solaredge Technologies : Piper Sandler & Co downgrades to neutral from overweight with a price target reduced from USD 110 to USD 105.
  • Spirax-Sarco Engineering : Investec maintains its hold recommendation and reduces the target price from 12150 to GBX 10350.