The US Federal Reserve's November 1 meeting brought no surprises for Wall Street. The main takeaway was clear: the Nasdaq 100 rose by 1.8%, surpassing the Dow Jones' 0.7% gains due to its focus on technology stocks. These stocks tend to react strongly to the Fed's policy changes, especially regarding cheaper financing. However, a complete reversal of US monetary policy is not yet on the horizon.
 
Investors' skepticism about a new rate hike had already prevailed before the meeting, and it intensified afterward. The probability of key rates remaining unchanged at the next meeting on December 13 increased from 69% to 80%, and for the January 31 meeting, it rose from 59% to 73%.
 
Several factors contributed to this market sentiment shift. The US Treasury's announcement of a lighter-than-expected long-term financing plan eased concerns about increased federal debt issuance. Bond yields fell in response. Fed Chairman Jerome Powell's comments after the rate decision also reassured observers, as he indicated a more measured approach to further rate hikes. Investors, influenced by the Fed's decisions, responded positively, with equities consolidating gains and bonds rallying slightly.
 
Apart from the Fed's decision, other factors supporting equity markets include easing European inflation, solid US corporate earnings (though slightly weaker in Europe), and declining oil prices. Despite the ongoing conflict in the Middle East, the oil market did not react negatively.
 
Quarterly earnings announcements from various companies, including Qualcomm, Airbnb, Axa, ING, Zalando, and Novo Nordisk, are dominating the agenda. The electric vehicle sector faces challenges, with doubts arising about its expansion due to consumer reluctance to transition from traditional combustion engines. This hesitation has affected orders and market listings, leading to downward revisions in forecasts, as seen in Albemarle's case.
 
In the macroeconomic sphere, the US will release several indicators ahead of the monthly employment report. Additionally, the Bank of England will announce its decision, expected to maintain the status quo. Meanwhile, the Bank of Brazil cut rates by half a point to 12.25%, as anticipated.
 
In the Asia-Pacific region, Japan experienced a 1.1% rebound, driven by positive news and a better-than-expected economic stimulus package. Hong Kong's Hang Seng rose by 0.8%, South Korea saw a 1.8% increase, and India, Taiwan, and Australia recorded significant gains. The trend suggests continued market rebound in Europe.

Economic highlights of the day:

The Bank of England's rate decision took place at 8:00 am. In addition, the U.S. Challenger layoffs (7:30 am.), new jobless claims(8:30), non-farm productivity (8:30), unit labor costs 83:30) and durable goods orders (10:00). Full agenda here.

The dollar falls to 0.9390 EUR and 0.8184 GBP. An ounce of gold trades at 1989 USD. Oil stabilizes, with North Sea Brent at 85.24 USD a barrel and US light crude WTI at 81.21 USD. The yield on 10-year US debt falls to 4.71%. Bitcoin is trading at around 35,500 USD.

In corporate news:

  • Microsoft, Nvidia and Tesla gained 0.8% to 2.2% in premarket trading after the US Federal Reserve's (Fed) decision to leave its key interest rates unchanged led to a marked easing in bond yields.
  • Qualcomm advanced 3.4% in premarket trading after announcing on Wednesday evening that it expected first-quarter sales and earnings to exceed Wall Street expectations.
  • Electronic Arts jumped 5.1% in after-hours trading, as the video game publisher raised its annual profit forecast following a better-than-expected quarter.
  • PayPal soared 6.1% in pre-market trading after raising its adjusted annual profit forecast, betting on the resilience of consumer spending.
  • Apple, the world's largest capitalization, will publish its quarterly results this Thursday after the close of trading on Wall Street.
  • Airbnb is down 1.7% in premarket trading after releasing a slightly lower-than-expected fourth-quarter sales forecast on Wednesday evening, against a backdrop of high inflation and economic and geopolitical uncertainties weighing on tourist demand.
  • Walt Disney officially acquired COMCAST's 33% stake in Hulu on Wednesday in a deal valued at at least $8.6 billion.
  • Starbucks on Thursday reported like-for-like quarterly sales ahead of Wall Street expectations, as sustained demand in North America for its high-priced coffees and cold drinks offset weakness in China. The share gained 3% in pre-market trading.
  • Mondelez International gained 2% in after-hours trading on the back of higher sales and earnings for the year, as the company counted on solid demand for its higher-priced snacks.
  • Albemarle plunged 5.8% in after-hours trading as the world's leading producer of lithium, a metal used in batteries for electric vehicles, lowered its annual forecasts following a lower-than-expected quarterly profit.
  • Boeing announced on Wednesday that it was investigating a cybersecurity incident that affected its spare parts and distribution business, and that it was cooperating with the authorities as part of the investigations into the matter.
  • Delta Air lines announced on Wednesday its intention to cut jobs in order to reduce costs, as the sector faces rising fuel and labor costs.
  • Marriott International reported higher quarterly profits on Thursday, as the US hotel group benefited from higher room rates and resilient travel demand. However, the share price fell by 2.6% in pre-market trading, due in particular to a lowered forecast for net annual room growth.
  • Eli Lilly reported better-than-expected quarterly sales on Thursday, buoyed by strong demand for its diabetes drug Mounjaro, which accounted for over a billion dollars in sales. The share, which was volatile in pre-market trading, gained 3% before retreating to around 2%.
  • Regeneron Pharmaceuticals exceeded Wall Street expectations for third-quarter earnings on Thursday, thanks to strong demand for its eczema treatment Dupixent.
  • Roku soared nearly 20% on Thursday, as the maker of video streaming devices posted a surprise third-quarter profit and forecast quarterly sales ahead of Wall Street expectations, on the back of a turnaround in the advertising market.
  • On Wednesday, Doordash reported a rise in orders for the third quarter and said it expected fourth-quarter operating profit to exceed expectations. The share price gained 1.3% in pre-market trading.
  • E.L.F Beauty climbed 14.2% in pre-market trading, as the cosmetics and skincare specialist raised its annual sales forecast.
  • Peloton Interactive announced on Thursday that it expects sales for its second fiscal quarter to fall short of Wall Street expectations, as the company anticipates lower demand for its fitness equipment amid high inflation.
  • Edison International reported a quarterly profit below Wall Street estimates on Wednesday, due in particular to a rise in compensation payments in connection with the California wildfire claims.
  • Etsy - The online retailer specializing in handmade and handicraft products plunges 5% in after-hours trading after warning of a possible deterioration in fourth-quarter sales as demand weakens ahead of the crucial holiday season.
  • Clorox jumped 8.4% in after-hours trading, as the household products specialist reported a surprise profit for the first quarter of its fiscal year.
  • Cognizant Technology Solutions falls by 4.2% in after-hours trading, as the IT services provider forecast quarterly sales of between $4.69 billion and $4.82 billion, against a consensus of $4.86 billion, according to LSEG data.
  • Amazon - HSBC starts tracking at "buy" with a price target of $160

 

Analyst recommendations:

  • Aflac incorporated: JP Morgan maintains its neutral recommendation with a price target raised from USD 74 to USD 80.
  • Airbnb: Morgan Stanley maintains its underweight recommendation with a target price reduced from USD 110 to USD 105.
  • Biomarin pharmaceutical: Barclays maintains its overweight recommendation with a price target reduced from USD 125 to USD 111.
  • Builders firstsource: B Riley Securities Inc. maintains its neutral recommendation with a price target reduced from USD 157 to USD 128.
  • Caterpillar: Daiwa Securities downgrades to neutral from hold with a price target reduced from USD 280 to USD 240.
  • CVS Health: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 89 to USD 86.
  • Doordash: Wolfe Research maintains its outperform rating and raises the target price from USD 110 to USD 120.
  • Dupont de nemours: Wells Fargo maintains its overweight recommendation and reduces the target price from USD 84 to USD 80.
  • Edison: Barclays maintains its equalweight recommendation with a price target reduced from USD 70 to USD 67.
  • Electronic arts: Goldman Sachs maintains its neutral recommendation with a price target raised from USD 130 to USD 135.
  • Etsy: Wolfe Research maintains its outperform rating and reduces the target price from USD 100 to USD 76.
  • Garmin: JP Morgan maintains its overweight recommendation and raises the target price from USD 118 to USD 135.
  • Humana: RBC Capital maintains its outperform rating and raises the target price from USD 594 to USD 599.
  • Intel: Daiwa Securities maintains its neutral recommendation with a price target raised from USD 35 to USD 40.
  • Martin marietta materials: Raymond James maintains its outperform rating and raises the target price from USD 490 to USD 505.
  • Match group: Cowen maintains its outperform rating and reduces the target price from USD 57 to USD 48.
  • Mckesson corporation: Morningstar maintains its sell recommendation with a price target raised from USD 395 to USD 400.
  • Metlife: Morgan Stanley maintains its overweight rating and raises the target price from USD 79 to USD 80.
  • Mondelez international:  Deutsche Bank maintains its buy recommendation and raises the target price from USD 75 to USD 78.
  • Northern trust corporation: Morgan Stanley maintains its equal weight recommendation with a target price reduced from USD 82 to USD 78.
  • Paypal holdings: JMP Securities maintains its market outperform recommendation and reduces the target price from USD 85 to USD 68.
  • Prudential financial: Morgan Stanley maintains its equalwt recommendation with a target price raised from USD 102 to USD 103.
  • Qualcomm: Morgan Stanley maintains its overweight rating and reduces the target price from USD 129 to USD 119.
  • Solaredge technologies: Truist Securities downgrades to hold from buy with a price target reduced from USD 120 to USD 70.
  • State street corporation: Morgan Stanley maintains its equal weight recommendation with a target price reduced from USD 79 to USD 77.
  • The clorox company: Citi upgrades to buy from neutral with a price target raised from USD 135 to USD 150.
  • Verisk analytics: Deutsche Bank maintains its buy recommendation and reduces the target price from USD 258 to USD 252.