Initial jobless claims reached just 406,000 for the week ended May 22, the Labor Department said. It is nearing the pre-pandemic levels and a drop from the previous week’s 444,000.

The Nasdaq is inching down by 0.1 %, but there is a relative inertia on markets at the moment. The S&P500 has roughly been flat since the beginning of April. In terms of equity market strategy and sectors, it is clear that investors are caught in the crossfire. Let's mention four of them, not all of them compatible. Firstly, "inflation-proof" bets, which are quite logically in fashion. Secondly, the securing of gains on the buoyant themes of the last six months (financial stocks, energy). Thirdly, the temptation of technology stocks, which have lost some of their luster, but continue to make shareholders' eyes shine. Finally, the voice of reason, which leans towards quality defensive companies.

Allocations are a bit more complex than when you could just buy a Nasdaq ETF and be sure to join the party (although a Nasdaq ETF is still a good idea for any long-term investor, or even short-term). In any case, at the moment, all these strategies collide, which leads to switches in polarity. Electric vehicles and green energy were great yesterday, but not banks or distribution. The day before, it was the opposite.

One of today's topic is about the increasing porosity between the automobile and technology sectors and its consequences. It is becoming a major investment theme, as it is at the crossroads. The vehicle is likely to be the next hypertechnological melting pot of the economy. Traditional manufacturers have been slow to understand this, but the transformation is underway. We now need to build vehicles around a software ecosystem - Tesla's successful bet - not vehicles with software in them. The mechanics are taking a back seat. Volkswagen, Stellantis, Toyota and others are now recruiting developers in droves. The barriers to entry into the automotive market are no longer those of the last century, with market shares that are pretty much fixed or difficult to shift.

Technology giants with tens of billions in wealth know they have a role to play. For example, there are insistent rumors about Apple's desire to put the power of its brand on four wheels, with an absolutely incredible financial strength (nearly $200 billion in cash). Today, the Financial Times explains that Tesla is thinking of producing its own chips by buying a foundry. Similar initiatives are multiplying. While the new entrants may not have an easy time, it is certain that with their agility, resources and experience in disruptive strategies, they are capable of transforming one of the oldest and most structured industries in existence. 

 

Today's Economic Highlights:

Major indicators are published in the US today, with the second estimate of Q1 GDP, durable goods orders, weekly jobless claims, and housing sales in the old sector.
The dollar is trading at EUR 0.8204. The ounce of gold is trading at USD 1896. Oil is down to USD 68.59 a barrel of North Sea Brent and USD 66.07 a barrel of U.S. light crude WTI. Dead calm on the US 10-year yield, which remains at 1.58%. Bitcoin is back abover USD 40,000.

 

On markets:

* The Boeing Company gained 2% in pre-market trading, benefiting from the group's optimism about demand for cargo aircraft in China with the rise of online commerce. The share also benefits from the clear progress in Paris of its competitor Airbus, which relies on the recovery of the aviation industry to raise its production targets. The U.S. Federal Aviation Administration (FAA) also announced that Boeing had agreed to pay $17 million (13.9 million euros) in penalties for installing unapproved sensors on 759 737 MAX and NG aircraft.

Tesla - The latest Model 3 and Model Y cars will no longer qualify for U.S. advanced safety certification for certain features after the automaker announced it would replace a radar system with cameras, the National Highway Traffic Safety Administration announced Wednesday.

* Nvidia expects second-quarter revenue to beat expectations, but its stock was down 1 percent Wednesday after the close as the company said it was unable to estimate how much of its first-quarter revenue increase was due to demand for chips for cryptocurrency mining.

* Uber Technologies said Wednesday that it recognized the British union GMB, allowing the union to represent some 70,000 drivers working in Britain for the U.S. ride-hailing giant and negotiate potential collective agreements on their behalf. In addition, RBC begins tracking the stock to "outperform."

* Best Buy - The consumer electronics retailer is up 3% in pre-market trading after raising its full-year sales forecast Thursday as recent fiscal stimulus measures bring customers back into stores.

* Medtronic, a medical device maker, reported better-than-expected quarterly profit and revenue on Thursday, thanks to a recovery in elective medical procedures.

* Royal Caribbean - The U.S. Centers for Disease Control and Prevention is allowing a cruise ship of the company to resume service on June 26, marking the first cruise departure from the U.S. in more than a year.

* Vir Biotechnology gains 13.7% in pre-market trading after the U.S. Food and Drug Administration (FDA) approves the emergency use of the antibody treatment developed with GlaxoSmithKline for mild to moderate forms of COVID-19 in people 12 years and older.

 

Analyst recommendations:

  • Agilent Technologies : Jefferies & Co adjusts PT to $155 From $150, maintains Buy rating
  • Amazon.com: JP Morgan retains his positive opinion on the stock with a Buy rating. The target price is unchanged and still at USD 4600
  • Aveva: Barclays upgrades to Overweight with a target of GBP 4060.
  • Best Buy : JPMorgan adjusts PT to $118 from $113, stays Neutral 
  • Centamin: Liberum starts tracking as Sell with a GBp 82 target.
  • Cisco : KGI Securities initiates coverage with Neutral rating, $58 Price Target
  • Columbus McKinnon : Barrington Research lifts PT to $78 From $67, keeps Outperform rating
  • Comcast : KGI Securities initiates coverage with Outperform rating, $66 PT
  • DoubleVerify : Truist Securities adjusts DoubleVerify Holdings PT to $34 From $30, maintains Hold rating
  • Foot Locker : Berenberg Bank lowers PT to $76 From $67, keeps Buy rating
  • Glencore: Deutsche Bank lifted its price target to 4.20 pounds sterling from 4 pounds, keeping a buy rating.
  • HSBC: Jefferies's research maintains his neutral opinion on the stock. The target price remains set at GBp 414.
  • Pan African: Berenberg starts tracking as Buy with target of GBP 27.
  • Nordstrom : Wedbush changes Price Target to $35 From $40 
  • Severn Trent: HSBC upgraded from Hold to Buy with a target of GBP 2780.
  • Spire Healthcare: Jefferies remains Hold with a target price raised from GBP 159 to GBP 240. 
  • Urban Outfitters : BMO Capital adjust PT to $35 From $31, maintains Market Perform rating