Yesterday on Wall Street, technology stocks and consumer cyclicals led growth. The Nasdaq 100 was able to stop the hemorrhaging of three sessions of strong decline with a rebound of 2%. All the large caps in the index recovered between 1% (for Meta Platforms) and 3.5% (for Tesla). Only 8 declines out of 100 stocks. The easing of bond yields helped. The very slight slowing of core inflation in March slightly eased fears that the Fed would aggressively raise rates in the short term.

However, Federal Reserve Bank of New York President John Williams today said that a half-point interest rate hike in May is a "reasonable option" to combat inflation. "We need to get to a more neutral or normal level of the fed funds rate," Williams told Bloomberg TV.

Today, monetary policy was also discussed with the April meeting of the European Central Bank, which is not in a very comfortable situation. Inflation is rising strongly in Europe - and rates are still at the bottom. The institution decided to keep its key interest rates at their lowest level and continues to forecast the end of its net debt purchases "in the third quarter" despite galloping inflation.

Financial markets received a boost from China, where authorities heavily hinted at easing rates and reserve requirements for banks Friday, to counter the negative effects of restrictions taken throughout the country to combat a new wave of coronavirus.

Twitter jumped 12% after Tesla CEO Elon Musk offered to buy 100% of the social media company for $54.2 per share in cash.

 

Economic highlights of the day:

Weekly jobless claims, retail sales, the University of Michigan's consumer confidence index and business inventories are all on the agenda today.

The dollar is up to EUR 0.9229. The ounce of gold remains firm at USD 1973. Oil continues to rally with North Sea Brent at USD 106.33 per barrel and US WTI light crude at USD 103.72. The yield on 10-year US debt continues its decline to 2.67%. Bitcoin is recovering to USD 41,197 a unit.

 

On markets:

* Twitter shares jump 13.6% in pre-market trading after a $41.39 billion offer from Tesla boss Elon Musk for the social network, of which he is already the largest shareholder. The Tesla share is down 1.8% in pre-trade.

In addition, a U.S. federal judge reduced from $137 million to $15 million the amount of compensation that Tesla must pay to one of its employees, while reaffirming the responsibility of the car manufacturer in the acts of racism he said he was a victim.

* Goldman Sachs reported a 43% drop in first-quarter profit, but it came in above Wall Street expectations. The stock is up 2% in premarket trading.

* Wells Fargo on Thursday reported a nearly 21% drop in first-quarter profit from the same period a year ago but came in above Wall Street expectations.

* Morgan Stanley reported a smaller-than-expected 11% drop in first-quarter profit Thursday, as a near doubling of fees from mergers and acquisitions (M&A) activity cushioned a drop in capital markets activity. The share price is up 2% in pre-market trading.

* Citigroup is up 1.6% in premarket trading on the back of quarterly earnings that beat Wall Street expectations.

* UnitedHealth on Thursday raised its full-year adjusted profit forecast on the back of strong results from its Optum healthcare services division, whose revenue rose 18.9% to $43.26 billion in the latest quarter. The stock is up 1.1% in pre-market trading.

* Blackstone - The U.S. investment fund and Edizione, the Benetton family's holding company and Atlantia's largest shareholder, submitted a bid for the Italian infrastructure group on Thursday, valuing it at 58 billion euros.

* Blackrock announced on Thursday that it was aiming to be carbon neutral by 2030 for at least three quarters of its investments in companies or sovereign wealth funds, compared with 25% currently.

* Rent The Runway fell 4% in after-hours trading after the online clothing rental platform reported annual sales below Wall Street expectations.

 

Analyst recommendations:

  • Bunzl: Berenberg downgrades from buy to hold with a target of GBp 2950.
  • CDW: Stifel upgrades to buy from hold. PT up 23% to $210.
  • Delta Air Lines: Barclays upgrades to overweight from equal-weight. PT up 46% to $60.
  • Earthstone: Stephens Inc initiated coverage with a recommendation of equal-weight. PT set to $15.
  • FMC Corp: Loop Capital Markets downgrades to hold from buy. PT inches up 1% to $140, implies a 1% increase from last price. FMC Corp average PT is $137.40.
  • H.B. Fuller: Baird upgrades to outperform from neutral. PT up 23% to $85.
  • Humana: UBS upgrades to buy from neutral, adjusts price target to $520 from $486.
  • JPMorgan: RBC maintained his recommendation on the stock with a Buy rating. The target price is lowered from USD 175 to USD 155.
  • Pearson: Morgan Stanley resumes coverage at equal weight targeting GBp 750.
  • Reliance Steel: Exane BNP Paribas upgrades to outperform from neutral. PT up 12% to $212.
  • Shopify: Benchmark initiates coverage with hold rating.
  • The Estee Lauder co: Barclays lowers price target to $330 from $342, maintains overweight rating
  • Usana Health: D.A. Davidson & Co initiated coverage with a recommendation of neutral. PT set to $86.
  • W.W. Grainger:  Morgan Stanley downgrades to underweight from equal-weight. PT down 8.9% to $480.