Investors, even some of the more experienced ones, are still finding it hard to envisage a prolonged inflationary environment, after living in the opulence of free money for the past fifteen years.

Stock markets have just endured several consecutive sessions of decline, and even companies deemed untouchable are having a bad time, including Apple this week. The Chinese authorities are beginning to ban some of their civil servants and high-ranking officials from using iPhones. It's fair game, you might say, given that the West, led by the Americans, has banned Huawei and other Chinese telecommunications equipment. Apple plummeted on the stock market yesterday after the first rumors.

Everything's going down the drain... except inflation. Investors continue to watch for signs that the US economy is too strong, which would mean persistently high prices, and therefore persistently high interest rates. Yesterday, however, the ISM services index for August turned out to be a cold shower, because it was too good. As a result, the little machine speculating that the Fed will have to remain in austerity mode back in action. Yesterday, US indices lost ground for the second consecutive session, the dollar took a beating and the 10-year yield flirted with 4.3% once again. Clearly, this too-solid US economy seems intent on thwarting the plans of those who were counting on the Fed's rate hike to keep the party going.

And another bad sign came this morning, suggesting that the job market is still too tight and the economy risks overheating. Wall Street futures fell sharply after Us weekly jobless claims came in at 216,000 last week, while 233,000 was expected.

Among the elements that could restore some color to the markets is China, where the statistics published earlier this morning are, for once, better than expected. But there's no reason to jump up and down. Beijing announced an -8.8% drop in exports and -7.3% in imports in August 2023 compared with August 2022. Obviously, written like that, it sounds pretty lame. Objectively, it's not great, but it's a little better than the average economists feared, who were aiming for a contraction of -9% for each data point.

Economic highlights of the day:

German industrial production for July and US weekly unemployment and productivity figures are on the agenda. 

The dollar is up to EUR 0.9350 and GBP 0.8027. The ounce of gold is trading around USD 1920. Oil is firm, with North Sea Brent at USD 90.26 a barrel and US light crude WTI at USD 86.69. The yield on 10-year US debt has risen to 4.29%. Bitcoin is trading at around USD 25,600.

In corporate news:

  • Apple lost a further 2.5% in pre-market trading on Thursday, after closing in the red (-3.6%) the previous day, following reports that China has banned government agency officials from using iPhones for business purposes. This ban could be extended to all Chinese state-owned companies, according to Bloomberg.
  • Tesla and Nvidia were down 1.6% and 1.9% respectively in pre-market trading, amid pressure on bond yields following data showing persistent inflationary pressures.
  • Gamestop gained 4.8% in pre-market trading after the company reported second-quarter sales ahead of Wall Street expectations, driven by strong demand for video games.
  • American Eagle Outfitters lost 3.5% in after-hours trading after reporting second-quarter sales just in line with analysts' expectations, even though the stock has risen by 70% since May, noted a CFRA Research analyst.
  • Blackberry fell by 11.6% in pre-market trading, the Canadian group having missed Wall Street expectations on its quarterly sales, with the cybersecurity segment in particular struggling.
  • Chargepoint Holdings plunged 10.5% in premarket trading after the electronic vehicle charging specialist's full-year sales forecast fell short of analysts' expectations.
  • Uipath was up 4.6% in pre-market trading, as the automation software specialist raised its annual sales figure following better-than-expected quarterly results.
  • Westrock jumped 8.2% in pre-market trading after the opening of merger talks between the American packaging specialist and its European competitor Smurfit Kappa.

Analyst recommendations:

  • Admiral group: Barclays maintains its overweight rating with a target price increase from GBP 26.16 to GBP 26.71.
  • Ashmore group pl: Numis downgrades to reduce from hold. PT reduced from GBp 190 to GBp 175.
  • Autodesk: Baptista Research maintient sa recommandation de conserver avec un objectif de cours relevé de USD 230,50 à USD 237,60.
  • Bakkavor group p: Kepler Cheuvreux maintains its hold recommendation on the stock with a new target price of GBp 105, up from the previous target of GBP 94.
  • Beazley plc: JP Morgan downgrades to neutral from overweight. PT reduced from GBP 8 to GBP 7.80.
  • Dell: Barclays maintains its equalweight recommendation on the stock with a target price of USD 53.
  • Dr horton: Morningstar maintains its hold recommendation with a target price increase from USD 120 to USD 122.
  • Energean plc: Peel Hunt downgrades to hold from buy. PT down 18% to GBp 1550.
  • Estee lauder: Berenberg maintains its buy recommendation with a reduced target price of USD 224.
  • Fedex corp: Wolfe Research maintains its outperform rating on the stock with a new target price of USD 303, up from the previous target price of USD 294.
  • General mills: Deutsche Bank maintains its hold recommendation with a reduced target price of USD 77.
  • Genus plc: HSBC downgrades to hold from buy. PT reduced from 30.60 to GBP 25.80.
  • Genus plc: Liberum maintains a buy recommendation with a reduced target price of GBp 3675.
  • Harbour energy p: Peel Hunt downgrades to hold from add. PT down 13% to GBp 260.
  • Hilton food grou: Panmure Gordon & Co. Limited maintains its buy recommendation with a raised target price from GBp 841 to GBp 930.
  • Hubspot: JP Morgan maintains its overweight rating on the stock with a raised target price of USD 560 from USD 485.
  • Hubspot : Wolfe Research maintains its outperform rating with a target price raised from USD 580 to USD 600.
  • Illinois tool wo: Barclays downgrades to underweight from neutral. PT reduced from USD 213 to USD 198.
  • Ingersoll-rand: Barclays maintains its overweight rating with a reduced target price of USD 74.
  • Intuit inc: BMO Capital Markets upgrades to outperform from market perform. PT up 8% to USD 605.
  • Johnson controls: Barclays maintains its equalweight recommendation with a reduced target price from USD 69 to USD 66.
  • Manulife fin: Baptista Research maintains its buy recommendation with a reduced target price of $26.20.
  • Markel group inc: Jefferies maintains its buy recommendation on the stock with a target price raised from 1,680 to 1,USD 750.
  • Micron tech: Citi maintains a buy recommendation on the stock with a new target price of USD 85.
  • Nutrien ltd: Berenberg maintains its hold recommendation with a target price raised from 49 to USD 67.
  • Okta: Daiwa Securities maintains a buy recommendation with a target price raised from USD 87 to USD 99.
  • Otis worldwi: Barclays maintains its equalweight rating with a reduced target price of USD 77.
  • Palo alto networ: Baptista Research maintient sa recommandation de conserver avec un objectif de cours relevé de USD 250 à USD 272,30.
  • Pnc financial se: HSBC downgrades to reduce from buy. Target price reduced from USD 122 to USD 110.
  • Prudential plc: Barclays maintains its overweight rating with a target price increase from GBP 15.75 to GBP 16.10.
  • Quest diagnostic: Baird maintains a neutral recommendation with a target price raised from USD 149 to USD 151.
  • Salesforce: President Capital Management Corp maintains its buy recommendation with a target price increase from USD 237 to USD 265.
  • Seagate technolo: Barclays maintains its overweight rating on the stock with a target price of USD 65.
  • Snowflake: Baptista Research maintient sa recommandation de conserver avec un objectif de cours relevé de USD 187,90 à USD 193,10.
  • Synopsys inc: Baptista Research maintient sa recommandation de conserver avec un objectif de cours relevé de USD 471,90 à USD 480,20.
  • Target corp: Morgan Stanley maintains its equal weight/in-line rating with a reduced target price of USD 140.
  • Truist financial: HSBC maintains its hold recommendation with a target price of USD 29.
  • Us bancorp: HSBC maintains its hold recommendation on the stock with a target price of USD 39.
  • Wells fargo & co: HSBC maintains its hold recommendation with a target price of USD 45.
  • Wpp plc: Societe Generale maintains a buy recommendation with a reduced target price of GBp 1280 from GBp 1420.