November's PCE inflation in the United States was eagerly awaited. This is the Fed's most closely watched price indicator, as it focuses on what American households actually pay. Economists expected that annual inflation slowed to 3.3% in November from 3.5% in October, and it came in even better than expected, as it slowed to 3.2%. This strengthens the market' prevailing bet that the Fed will be in a position to start cutting its key rates as early as the 1st half of 2024. Futures rose after the announcement.

The hypothesis of a bearish run-up triggered by 0DTE options on Wednesday - a somewhat artificial decline – seems to be confirmed. Indices rebounded on Thursday to make up some of the lost ground. The Nasdaq 100, for example, recovered 1.23% after dropping 1.53% on Wednesday. We remain in a relatively buoyant environment for equities. As one trader put it a month ago, investors almost universally think a pause is in order, but are almost universally buying.

The European markets continued their sideways journey yesterday, with "one (small) step forward, one (small) step back". Yesterday, it was backwards, but the indices remain close to their highs. Only the Bel20 suffered further, under the effect of the second blade on biotech ArgenX. The first blade, following a clinical failure, had amputated a quarter of the company's value on Wednesday. On Thursday, it lost a further 3.3% due to the avalanche of analysts' target price cuts.

But before talking about stock markets again, I'm going to broach a serious and slightly more global subject. I know. It's Friday… But it's about you. And if you haven't already, believe me, it won't be long. Here's my weekend anecdote. I've been asked quite a few time if at MarketScreener we’re integrating Artificial Intelligence in our process. And the answer is "yes, a thousand times yes". We're testing several AI systems, we've got developments underway on editorial assistance solutions and functional tools that offer us the possibility of producing content faster. We have projects that will give you, our readers and subscribers, access to personalized features you'd hardly believe. So to speak, we're immersed in it all, especially as our boss is insatiable when it comes to anything remotely related to AI. A breakthrough in text-to-speech? Here comes an SMS at 2:00 am. A new 100% AI-driven news channel? A WhatsApp in the middle of the weekend. Above all, it's exciting and frightening at the same time.

As far as I'm concerned, and thanks to the fact that we're immersed in concrete uses of AI,  I have three fairly firm ideas on the subject. I'll start with the most depressing, because it outshines all the others and is my strongest conviction. AI will contribute to the further sanitization of information, drowning us in insipid content. It's already started on the web. I'm afraid it won't help to raise the bar. Secondly, AI can save us a considerable amount of time on certain tasks, and can enable us to better apprehend complex situations. We're already experiencing this on a daily basis at MarketScreener. Finally, there's no other choice but to go ahead with it, it’s the future of media, for good or bad.

So we're going to keep exploring the potential of artificial intelligence, because it's exciting. But above all, we're going to continue writing original content for you, content that's sometimes serious, sometimes divisive, sometimes funny, content that's a bit of all of the above. To try and give you the best of both worlds. But it's not going to be easy.

Let's get back to financial matters. Things are happening in China this morning, with two contradictory movements. Traditional equities are up, buoyed by the decision of five of the country's biggest banks to cut rates to support businesses and households. The mainland CSI300 index thus gained a little ground. In Hong Kong, however, the Hang Seng lost 1.5%, weighed down by its technology stars. Video game specialists Netease and Tencent plunged after Beijing announced a crackdown on the sector, particularly on players' spending on online games. Netease (listed in Hong Kong and the USA) lost up to 28% during the day, while Tencent shed 15%.

Nike was another spectacular loser. The stock lost 11% in after-hours trading last night, following the announcement of results for the three months to the end of November. The figures were rather respectable, even if growth was minimalist, but the outlook was cautious. The Group even had to announce a cost-cutting plan to make up for the disappointment. The stock market stall was also due to the fact that investors thought Nike had a kind of invincibility cloak in the face of a tougher consumer environment, following a series of more robust than expected publications. The awakening was all the more difficult.  

Economic highlights of the day:

Overnight, Japan reported annual inflation of 2.5% in November, in line with expectations. November's PCE inflation figures, and to a lesser extent new housing figures and the University of Michigan's consumer confidence index. The full agenda is here.

The dollar is worth EUR 0.9072 and GBP 0.7864. The ounce of gold flirts with USD 2062. Oil remains firm, with North Sea Brent at USD 79.95 a barrel and US light crude WTI at USD 74.49. The yield on 10-year US debt stands at 3.90%. Bitcoin is trading just under USD 44,000.

In corporate news:

  • Nike fell 11% in premarket trading after announcing a $2 billion cost-cutting plan on Thursday evening and lowering its annual sales forecast due to weak consumer demand.
  • Boeing - The American aircraft manufacturer delivered a 787 Dreamliner to China, landing in Shanghai on Friday, the first direct delivery since 2019, a move that could accelerate the thawing of 737 MAX deliveries in the country.
  • Tesla has acquired land in Shanghai for a mega-battery manufacturing plant scheduled to start production in the fourth quarter of 2024, Chinese state media reported on Friday. Meanwhile, the American automaker will recall more than 120,000 vehicles in the US due to a risk of unlocking cabin doors in the event of an accident, according to NHTSA, the highway safety agency.
  • Berkshire Hathaway - The group headed by Warren Buffett has acquired 5.2 million shares of Occidental Petroleum, bringing its stake in the oil company to nearly 28%, shows a regulatory notice published Thursday.
  • U.S. Steel - The White House said Thursday that the proposed $14.9 billion acquisition of the U.S. steelmaker by Japan's Nippon Steel requires careful scrutiny, given the company's central role in U.S. steel production, a component deemed essential to national security.

Analyst recommendations:

  • Analog Devices : Edward Jones upgrades to buy from hold.
  • Boeing : Morningstar upgrades to hold from sell with a price target raised from USD 223 to USD 232.
  • Block : Baird maintains its outperform rating and raises the target price from USD 72 to USD 90.
  • Carnival : Deutsche Bank maintains its hold recommendation with a price target raised from USD 14 to USD 18. Wells Fargo maintains its equalweight recommendation and raises the target price from USD 16 to USD 22.
  • Cintas : RBC Capital maintains its outperform rating and raises the target price from USD 525 to USD 645.
  • Coinbase Global : Mizuho Securities maintains its underperform recommendation and raises the target price from USD 35 to USD 54. JMP Securities maintains its market outperform recommendation and raises the target price from USD 107 to USD 200.
  • Darden Restaurants : Morningstar downgrades to sell from hold with a target price of USD 146.
  • M&G : Berenberg maintains its hold recommendation with a price target raised from GBX 208 to GBX 225.
  • Microsoft : Rosenblatt Securities Inc. drops coverage on the stock.
  • Netflix : DZ Bank AG Research downgrades to hold from buy with a price target raised from USD 465 to USD 495.
  • Nike : Morningstar downgrades to hold from buy with a target price of USD 136.
  • Paychex : Cowen downgrades to market perform from outperform with a price target reduced from USD 132 to USD 123.
  • Regeneron Pharmaceuticals : WestPark Capital drops coverage on the stock.
  • Splunk : Rosenblatt Securities Inc. drops coverage from neutral.
  • Vertex Pharmaceuticals : WestPark Capital drops coverage on the stock.
  • 888 Holdings : Investec maintains its buy recommendation and reduces its target price from GBX 140 to GBX 130.