April isn't going too well for the stock market at the moment, after hopes of a US rate cut evaporated before (at best) September. However, corporate results help to divert attention. We’ve seen a 4.4% drop in four sessions on the Nasdaq 100, and it's starting to look like consolidation. "Consolidation" is a catch-all term for a more or less pronounced downward movement, sometimes also referred to in the media as "clearances" or "profit-taking". There's no precise definition, but the semantics imply a notion of reinforcement before a resumption of progress. But sometimes consolidation isn't enough, and the market continues to fall. This can lead to a "correction". This term, on the other hand, benefits from a fairly consensual definition: a correction occurs when an index loses 10% from its highs. This has happened some thirty times over the last forty years for the broad US S&P500 index, with an average drop of 13%. We're not there yet, but the S&P500 lost 4.6% and the Nasdaq 5.2% from their April 1 highs, so it's something to watch.

The US rate-cutting story is broken for the time being, forcing investors, who are eternal optimists, to look elsewhere for reasons to buy. They're now betting on just two Fed monetary easings in 2024, although they know there's a risk that this number could dwindle to one, or even nothing at all. This is a cause for concern, but not yet a real problem, as long as the economy holds up.

Earnings season is accelerating. In Europe, luxury giant LVMH results pleased the financiers, enabling the CAC40 (+0.62%) to outperform the European average, personified by the STOXX Europe 600 (+0.04%). On the other hand, yesterday’s impact from earnings reports was more painful on Wall Street. The disappointing outlook for semiconductor giant ASML, caused the "seed pocket" of the stock market to take a big hit, falling by 3.9%, weighed down by Nvidia, Broadcom, Applied Materials and Qualcomm. ASML lost 7% during the session. However, today, another world semiconductor giant saved the day. Taiwan Semiconductor Manufacturing Company (TSMC) beat revenue and profit expectations in the first quarter, buoyed by strong demand for advanced chips used in AI. Net revenue reached USD 18.87 billion. TSMC counts Nvidia and Apple as its clients.

In other news, U.S. yields eased slightly after a large debt offering that was the subject of strong demand. In turn, the dollar fell a little. The greenback's decline was reinforced by a rare joint statement from US Treasury Secretary Janet Yellen and the finance ministers of Japan and South Korea on their "grave concern" at the deterioration of the yen and won. Currency traders believe that this could pave the way for strong intervention in the foreign exchange market. It sounds like a storm in a teapot, but it's helping to distract attention from the rest, and it's helping Eastern markets to bounce back via the fall in US bond yields, whose rise was starting to become worrying.

Asia-Pacific indices are recovering, with gains of close of 0.3% for Tokyo, 0.5% for Sydney and South Korea, and 0.8% for Hong Kong. India lagged behind, with a 0.6% drop for the SENSEX 30. European leading indicators are mixed: the recovery of US futures reassures investors somewhat, but the series of red sessions on Wall Street raises questions. The Stoxx EU 600 is down 0.1%. Futures on the Dow Jones, the Nasdaq 100 and the S&P 500 are all up 0.2%.

Economic highlights of the day:

New jobless claims, the Philadelphia Fed's business outlook, existing home sales, existing home sales and the leading index are on the agenda. 

The dollar is worth EUR 0.9375 and GBP 0.8023. The ounce of gold is firm at USD 2385. Oil slipped again, with North Sea Brent at USD 86.63 a barrel and US light crude WTI at USD 82.16. The yield on 10-year US debt fell to 4.57%. Bitcoin is trading at USD 62,250.

In corporate news:

  • Blackstone - The world's largest private equity firm said Thursday that its first-quarter distributable profits were up 1% year-on-year, as growth in fee-based earnings partially offset lower income from asset disposals.
  • Taiwan Semiconductor Manufacturing reported a 9% rise in first-quarter net income on Thursday, beating market expectations thanks to surging demand for semiconductors used in artificial intelligence applications. Semiconductor stocks rose before the opening, with Nvidia gaining 1.7%, Advanced Micro Devices, Applied Materials, Arm Holdings up 1%.
  • Micron Technology will receive more than $6 billion in grants from the U.S. Department of Commerce to finance chip plant projects, Bloomberg News reported on Wednesday. The stock was up 3.4% before the opening.
  • Elevance Health on Thursday beat estimates for its first-quarter profit, as higher premiums in its commercial insurance business helped the insurer control medical costs.
  • D.R. Horton - The American homebuilder raised its full-year sales forecast on Thursday, as the limited supply of housing in the United States boosted sales. The share gained 2.27% in pre-market trading.
  • Discover Financial Services reported a 68% drop in first-quarter earnings on Wednesday, due to higher provisions for non-performing loans. The group's encouraging outlook supported the share price, which advanced by 1.1% before the opening.
  • Cadence Design Systems presented on Wednesday the latest version of its supercomputer designed to improve chip creation and the software that will run on these chips.
  • Oracle said Wednesday it would invest more than $8 billion in Japan over the next 10 years to meet demand for cloud computing and artificial intelligence infrastructures.
  • United Airlines said on Wednesday it had reached an agreement with Boeing to be compensated for financial damages related to safety problems on the group's aircraft.
  • Alaska Air said Thursday it expects better-than-expected earnings for the current quarter, thanks to strong travel demand and a solid summer season.
  • Ibotta - The Walmart-backed digital marketing company is expected to raise $577.3 million and be valued at $2.67 billion, after pricing its IPO on Wednesday. Shares are expected to begin trading on Thursday.
  • Equifax - The credit rating company's share price fell by 7.9% after the close, as the group forecast lower-than-expected sales for the second quarter, with high rates likely to put pressure on demand for mortgages.
  • Alcoa reported an adjusted quarterly loss of 81 cents per share for the three months to March, compared with a loss per share of 23 cents last year.
  • Las Vegas Sands - Shares in the casino operator, which on Wednesday reported a quarterly profit ahead of estimates, are down 3.7% in pre-market trading as three brokerage firms cut their price target on the stock, citing weak trading in Macau.

Analyst recommendations:

  • Baker Hughes Company: Morgan Stanley maintains its overweight rating and raises the target price from USD 40 to USD 43.
  • Linde Plc: Mizuho Securities upgrades to buy from neutral with a target price of USD 510.
  • Oracle Corporation: Oppenheimer drops coverage on the stock.
  • Us Bancorp: Keefe Bruyette & Woods downgrades to market perform from outperform with a price target reduced from USD 52 to USD 45.
  • Williams Companies: Wolfe Research downgrades to underperform from peerperform with a target price of USD 34.
  • Zscaler, Inc.: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 220.
  • Aes Corporation (The): Mizuho Securities initiates a Buy recommendation with a target price of USD 21.
  • Halliburton Company: Morgan Stanley maintains its overweight rating with a price target raised from USD 45 to USD 50.
  • Broadcom Inc.: Fubon Securities initiates a Buy recommendation with a target price of USD 1850.
  • Ge Vernova Inc.: Evercore ISI initiates an outperform recommendation with a target price of USD 174.
  • Flutter Entertainment Plc: HSBC downgrades to hold from buy with a price target reduced from GBP 170 to GBP 159.
  • Ebay Inc.: Morgan Stanley upgrades to overwt from underwt with a price target raised from USD 35 to USD 62.
  • Vodafone Group Plc: Baptista Research downgrades to buy from outperform with a price target reduced from USD 13.30 to USD 10.90.