Beijing's efforts to make investing in Chinese equities popular again have finally created a small buying current, if not a tidal wave. Most stock markets benefited, especially in the USA and Europe. As is often the case, China alternated between technical measures, such as a 50% rebate on transaction prices, and more esoteric announcements. I’m amused by the rumor that the central government has asked local banks to become net buyers of shares to support stock prices. Perhaps the next step will be to ban negative sentiment on the Shanghai and Hong Kong stock markets and force short sellers to buy Country Garden and China Evergrande shares!

In the meantime, a majority of European indices exceeded 1% yesterday, confirming the recovery seen in Friday's previous session. There are three sessions left, including today's, to soften August's losses. At this stage, the S&P500 is down -3.4% since August 1. Caution still prevails, as investors know that September is statistically the worst month of the year for the US market.

With the prospect of key interest rates remaining at high levels, synonymous with an upheaval in the economic backdrop that has dominated since 2008, growth drivers need to be found. Artificial intelligence, perhaps? China, possibly. The environmental transition, if need be, even if financiers see it more as a constraint than an opportunity.

In the shorter term, this week's series of macroeconomic statistics will set the tone, with the age-old combination of employment and consumer prices. In the United States, it's the PCE inflation figures published on Thursday, coupled with the August labor market figures due on Friday, which are of the utmost interest to investors. And with good reason, since these are the two data that the Fed most closely scrutinizes in order to conduct its monetary policy. In Europe, the focus will be on Germany's August inflation figures, to be released tomorrow, before the same statistics for the Eurozone on Wednesday. In parallel, there will be a host of other data. I'm putting a small bill on the Chinese PMIs (Thursday for the official PMI, Friday for the Caixin PMI) to maintain, or not, the narrative thread on an upturn in China, which is somewhat the driving force of the week on the equities side.

Earnings season is ending, with a few names on the agenda, including HP Inc, Hewlett Packard Enterprise and Best Buy. Finally, the United States and China agreed "to discuss the application of export controls and to set up a formal working group on trade issues", as part of the US Commerce Secretary's visit to Beijing. Basically, a form of dialogue has been re-established to discuss customs barriers, but there's still a long way to go before a possible détente.

Wall Street futures were flat today ahead of the Job Openings and Labor Turnover Survey, due for a 10 am ET release.

Economic highlights of the day:

In the United States, we have house prices, the Conference Board consumer confidence index and JOLTS job offers. The full agenda is here. 

The dollar is up 0.2% against the euro and the pound to EUR 0.9257 and GBP 0.7948. The ounce of gold rises to USD 1916. Oil stabilizes, with North Sea Brent at USD 84.44 a barrel and the WTI at USD 80.61. The yield on 10-year US debt falls to 4.19%. Bitcoin is trading just under USD 26,000.

In corporate news:

  • Catalent shares rose by 2.7% before the opening. Reuters reported that the company was close to reaching an agreement with Elliott Investment Management that would lead to a reshuffle of the board of directors.
  • Hawaiian Electric gained 6.5% before the opening. The electric utility was the third most traded U.S. stock by retail investors on Monday, according to J.P.Morgan data.
  • 3M Company was up 0.4% before the opening, extending its gains after surging on Monday. The group agreed to pay $6.01 billion to settle lawsuits against its earplugs, an amount that JPMorgan estimates to be much lower than expected.
  • PDD Holdings reported above-consensus second-quarter sales on Tuesday, thanks to its online sales platform, which attracted more price-conscious customers, and the rapid expansion of its international trading site, Temu. The US-listed share gained 8.8% before the opening.
  • Nio is down 1.6% in pre-market trading following its second-quarter results, the group having announced that its quarterly vehicle sales were down 24.9% year-on-year.
  • Canaan was down 3.5% in pre-opening trading after announcing a drop in sales and recording a loss in the second quarter.

Analyst recommendations:

  • Abrdn plc: HSBC maintains its reduce recommendation with a new target price of GBP 1.40 , compared with GBP 1.90 previously.
  • AT&T: Citi upgrades to buy from neutral. PT up 20% to $17.
  • Bunzl plc: Credit Suisse maintains its neutral recommendation with a price target raised from GBp 3255 to GBp 3345.
  • Celanese:  Piper Sandler downgrades to underweight from neutral. PT down 7.8% to $112.
  • Forward Air: Jefferies upgrades to buy from hold. PT up 20% to $85.
  • Hersha Hospitality: Barclays upgrades to equal-weight from underweight. PT up 2.1% to $10.
  • Marks and spencer: RBC Capital maintains its sector perform recommendation with a price target raised from 205 to 235 GBp.
  • Puretech health: Liberum maintains its buy recommendation with a price target reduced from 430 to 390 GBp.
  • Segro plc (sgro ln): Goldman Sachs maintains its recommendation at "Neutral" with a price target reduced from 750 to 710 GBP.
  • Snap: President Capital Management upgrades to buy from neutral. PT rises 48% to $14.
  • Standard chartered: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from 920 to 911 GBP.