Unless we see a massive rally between now and Friday, September 2023 should reinforce the age-old statistic that this month is usually the worse one for stock market. The S&P 500 is down more than 5% this month so far and the Nasdaq 100 by more than 6%. Investors fear the return of rate hikes, which has reduced their appetite for risk.

On Wall Street, Monday's surge in equities was short-lived: the three main indices lost more than 1%, with the Nasdaq 100 taking the lead with -1.5%. The tech index lost more than 4% in one week, which is probably the best illustration of investors' growing caution.

Meanwhile, Democratic and Republican leaders have agreed in the Senate to push back the deadline for negotiations on the federal budget to mid-November, in order to avoid a shutdown of certain public services on October 1. But echoes from the House of Representatives are less favorable, meaning that a shutdown remains possible in a few days' time. It's not a foregone conclusion, economists insist, but it remains an additional point of tension for the markets and a further signal of the polarization of American political life 13 months ahead of the next presidential election.

In China, Hong Kong and Shanghai bounced back overnight. Officially, because Chinese industrial figures are improving. But that's no reason to rejoice yet. According to official media reports, Chinese industrial profits fell by 11.7% year-on-year between January and August. China Evergrande chairman Hui Ka Yan has been under judicial supervision since the beginning of the month, and developer CIFI Holdings lost half its value in Hong Kong over the session after a six-month trading halt.

On the plus side, plans for IPOs or fund-raising are confirmed, a sign that there are still a few adventurers left. Adventurers in sandals with the confirmation of Birkenstock's IPO plans in the United States. A valuation of $10 billion is mentioned. And artificially intelligent adventurers, with rumors of a new round of financing for OpenAI, the Microsoft protégé that democratized the use of AI last year. And now the WSJ is talking about a value of between $80 and $90 billion.

A final word on China, which will enter a long trading blackout on Friday. While mainland Chinese stock markets will be closed for six sessions for the Autumn Festival followed by national days, only Monday will be a public holiday in Hong Kong.

Today's economic highlights:

Durable Goods Orders and DOE Crude Inventories are on the agenda today. 

The dollar is down 0.3% against the euro to EUR 0.9495 and is flat against the pound at GBP 0.8232. The ounce of gold fell to USD 1888. Oil is up, with North Sea Brent at USD 93.85 a barrel and US light crude WTI at USD 91.83. The yield on 10-year US debt reaches 4.52%. Bitcoin trades at USD 26,650.

In corporate news:

  • Amazon rebounds slightly by 0.2% in premarket trading on Wednesday, following a 4% decline due to the announcement of a lawsuit filed by the Federal Trade Commission (FTC) for abuse of a dominant position.
  • Costco Wholesale was down 2% in pre-market trading, despite the publication of better-than-expected quarterly sales and earnings on Tuesday evening. Analysts said the wholesale distributor had been hit by profit-taking and an extremely pessimistic market environment due to high interest rates.
  • Wells Fargo and private equity firm Centerbridge Partners announced on Tuesday evening a partnership to create a fund of over $5 billion to lend to mid-sized companies in North America.
  • Rivian Automotive advances 1.8% in pre-market trading, as the automaker plans to use a subscription-based model to monetize certain functions of its cars.
  • Centene - The health insurer will cut 3% of its workforce, or around 2,000 positions, in order to reduce costs, a company spokesman said on Tuesday.
  • Rocket Lab loses 1.4% in pre-market trading after lowering its sales forecast for the current quarter.

Analyst recommendations:

  • Asos plc: Jefferies maintains its hold recommendation with a price target reduced from GBX 500 to GBX 400.
  • Blackstone inc: BNP Paribas Exane maintains its neutral recommendation with a price target raised from USD 98 to USD 103.
  • Cardinal health: Baptista Research downgrades to underperform from hold with a price target reduced from USD 90.10 to USD 78.70.
  • Costco Wholesale: Raymond James maintains its outperform rating and raises the target price from USD 570 to USD 580.
  • Entain plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 1930 to GBX 1650.
  • First solar inc: Citi maintains its neutral recommendation with a price target reduced from USD 214 to USD 200.
  • Fortinet inc: Baptista Research upgrades to buy from hold with a price target reduced from USD 75 to USD 73.30.
  • Hershey co/the: BNP Paribas Exane maintains its outperform rating and reduces the target price from USD 268 to USD 250.
  • Jacobs solutions: Baptista Research upgrades to outperform from buy with a price target raised from USD 142.10 to USD 153.50.
  • Kkr & co inc: BNP Paribas Exane maintains its outperform rating and raises the target price from USD 75 to USD 80.
  • Mondelez inter-a: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from USD 80 to USD 75.
  • Public storage: Goldman Sachs resumes coverage with a buy recommendation and a target price of USD 310.
  • Transdigm group: Baptista Research downgrades to underperform from hold with a price target reduced from USD 880 to USD 705.40.
  • Wizz air holding: Liberum downgrades to hold from sell with a target price of GBX 2000.