The Nasdaq is a barometer of investor appetite for equity markets, and week 38 of the calendar year shows that investors are not very hungry for stocks right now. The tech index lost more than 3% in two sessions to return close to its summer lows. On Wednesday, the Fed surprised with its hawkish stance. US key rates are going to remain high for longer than the market thought. This was enough to hit risk appetite. However, this is nothing catastrophic at this stage, since the Nasdaq is still up 34% since January 1, but a warning nonetheless. Investors are wondering whether the end of the year will be a lean one. One thing's for sure: September's reputation as the worst month on the stock market, based on over a century of data, is not overdone. The Nasdaq 100 has lost over 5% since the beginning of the month.

Actually, investors sold stocks at the fastest weekly rate this year in the week to Wednesday, according to a new report from Bank of America Global Research. Equities recorded a weekly outflow of $16.9 billion, while investors bought $2.5 billion of bonds.

In Britain, inflation data came in yesterday with a positive surprise on Wednesday. Prices unexpectedly fell in August, despite most analysts anticipating a rise due to higher energy prices. While most investors still expected the BoE to raise rates yesterday by a quarter point to 5.5% from 5.25% - thinking that it could be the last one in this cycle – the BoE surprised them by keeping its rates unchanged. This was a close decision, with a 4-5 split. It was the first pause after 14 consecutive rate rises since the start of the tightening cycle in December 2021. However, the Bank was very clear is that the Bank is leaving all options on the table for November.

The UK's economy displayed clear recession signals on Friday, after a survey showed companies had a tough time in September, with growing unemployment. The UK S&P Global Purchasing Managers' Index (PMI) for the services sector dropped at the fastest rate since January 2021.

In Japan, the central bank left rates unchanged, as expected. On the energy market, traders' hearts are swaying between Russian diesel export restrictions, which are driving up prices, and the agreement reached between Chevron and its unions to end the strike at the group's LNG facilities in Australia, which is deflating gas prices. US equity futures were slightly higher before Friday's opening bell.

Economic highlights of the day:

PMIs are being released throughout the day for the major economies. All the agenda is here. 

The dollar is worth EUR 0.9394 and GBP 0.8154. The ounce of gold is trading at USD 1924. North Sea Brent is trading at EUR 93.01 a barrel and US light crude WTI at USD 90.48. The yield on 10-year US debt rises to 4.49%. Bitcoin trades at USD 26,650.

In corporate news:

  • Activision Blizzard gained 1.7% and Microsoft 0.4% in pre-market trading as the UK competition authority, the CMA, declared that the remedy proposed by the Redmond group "opened the door" to a green light for the proposed takeover of the "Call of Duty" publisher.
  • Amazon announced on Friday its intention to offer advertising on its Prime Video on-demand service from early 2024.
  • Alibaba was up 4.5% before the opening of trading in New York, as its logistics arm Cainiao plans to file for an initial public offering in Hong Kong next week, raising at least $1 billion, according to Bloomberg.
  • Mc Donalds will raise royalties for new franchisees from 4% to 5% from January 1, 2024, the first increase in nearly three decades, CNBC reported Friday.
  • Merck announced Friday that its cancer immunotherapy Keytruda in combination with Japanese partner Eisai's drug had failed to meet the primary endpoints of a late-stage study for the treatment of lung cancer patients.
  • Intel - The European Commission announced on Friday that it had reimposed a €376.36 million fine on the American semiconductor manufacturer for abuse of a dominant position.
  • United States Steel - Canadian steelmaker Stelco is preparing a takeover bid for its U.S. competitor, Bloomberg reported on Thursday. U.S. Steel gained 1.5% in after-hours trading.
  • Citigroup has warned its UK-based employees that redundancies are likely as the bank implements a major reorganization plan, according to a note seen by Reuters on Friday.
  • Warner Bros Discovery said on Thursday it planned to increase production capacity at its UK studios by more than 50%.
  • Hilton Worldwide Holdings said on Thursday it was working to ensure that compulsory charges are displayed upfront on all its websites and apps at a time when hotel operators are being criticized for their lack of transparency.

Analyst recommendations:

  • Adobe inc: Phillip Securities downgrades to reduce from accumulate with a price target raised from USD 402 to USD 441.
  • Barclays plc: Deutsche Bank maintains its hold recommendation with a price target reduced from GBX 230 to GBX 200.
  • Boohoo group plc: Morgan Stanley maintains its underweight/in-line recommendation with a target price reduced from GBX 33 to GBX 32.
  • Brookfield: Wells Fargo maintains its overweight recommendation and reduces the target price from USD 37 to USD 34.
  • Charter commun: Wells Fargo upgrades to overweight from equalweight with a price target raised from USD 450 to USD 550.
  • Constellation: Goldman Sachs maintains its buy recommendation and raises the target price from USD 275 to USD 305.
  • Darden restaurant: BMO Capital Markets maintains its market perform recommendation with a price target reduced from USD 160 to USD 155.
  • Deere & co: Canaccord Genuity downgrades to hold from buy with a price target reduced from USD 530 to USD 400.
  • Delta air li: BNP Paribas Exane maintains its outperform rating and reduces the target price from USD 65 to USD 57.
  • Exxon mobil corp: Morgan Stanley maintains its overweight/attractive recommendation and raises the target price from USD 124 to USD 131.
  • Fedex corp: Morningstar downgrades to hold from sell with a price target raised from USD 222 to USD 231.
  • Glencore plc: Morningstar maintains its hold recommendation with a target price raised from GBX 510 to GBX 530.
  • Intercontinental: Goldman Sachs maintains a neutral rating on the stock with a target price of USD 125.
  • Kkr: Barclays maintains its overweight recommendation and raises the target price from USD 73 to USD 82.
  • Kla corp: William O'Neil & Co Incorporated drops coverage on the stock.
  • Lloyds banking: Deutsche Bank maintains its buy recommendation and reduces the target price from GBX 63 to GBX 62.
  • Natwest group pl: Deutsche Bank maintains its buy recommendation and reduces the target price from GBX 370 to GBX 320.
  • Netflix: William O'Neil & Co Incorporated drops coverage on the stock.
  • Nike inc -cl b: Telsey Advisory Group maintains its outperform rating and reduces the target price from USD 135 to USD 128.
  • Ocado group plc: AlphaValue/Baader Europe upgrades to add from reduce with a target price reduced from GBX 754 to GBX 742.
  • Phoenix group ho: JP Morgan downgrades to underweight from neutral with a price target reduced from GBP 6.55 to GBP 5.
  • Raymond james: Citi maintains its neutral recommendation with a price target reduced from USD 120 to USD 115.
  • Smith & nephew: AlphaValue/Baader Europe upgrades to buy from add with a target price of GBX 1401.
  • Southwest air: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from USD 34 to USD 31.
  • Splunk inc: Morningstar downgrades to hold from buy with a price target raised from USD 125 to USD 144.
  • United airlines: BNP Paribas Exane maintains its outperform rating and reduces the target price from USD 88 to USD 82.
  • Virgin money uk: Deutsche Bank maintains its hold recommendation with a price target reduced from GBX 220 to GBX 210.