We read everywhere that growth stocks are perfectly unsuited to a high interest-rate environment, so in all logic, the Nasdaq should struggle too. Instead, it picked up 0.8%, driven by its biggest stars: +1.5% for Apple, +1.9% for Microsoft, +1.8% for Amazon, +2.5% for Alphabet, +3% for Nvidia and +2.2% for Meta Platforms. When you have this kind of movement on stocks that weigh 40% of the index, it almost doesn't matter what's going on behind the scenes. American investors returned to big tech after positive comments from Goldman Sachs, which pointed out that the sector's stars, after their summer correction, are posting their biggest discount to the rest of the market in over six years. Even though their outlook is brighter. That's all it took for financiers in search of benchmarks to buy the news. Mind you, when I say "discount", I'm talking about the difference with recent averages on a relative basis. In absolute terms, digital mega-capitalizations remain much better valued than the stock market plebs.

Apart from this bright spot, it was a rather gloomy day for equity markets. Comments from the various central bankers who had their say yesterday added little to the debate. Their leader, Jerome Powell, even had the luxury, for the second time in a row, of not talking about monetary policy during a public speech. He left his lieutenants to gossip. John Williams and Michael Barr as the good guys and Loretta Mester and Michelle Bowman as the bad girls. Autumn being the season for conferences of all kinds, there will be plenty more comments from Fed bankers today. You'll have read it here before anyone else: some will say that current rates are appropriate, others that they'll probably have to be raised further, and all will suggest that current levels, with a few variations, are here to stay.

I wanted to come back to the commonplace view that rate hikes are a curse for growth stocks. The traditional reasoning is based on two points: on the one hand, access to financing is more complicated for stocks that are unprofitable or not very profitable, and that are betting on a headlong rush into the future. In addition, growth stocks are expected to generate profits further ahead than others. If money becomes more expensive, a higher discount rate is applied to these future profits, making the companies concerned less attractive than others according to the old principle of "a bird in the hand is worth two in the bush". It's undeniable that higher rates create problems for some growth stocks, even if the Nasdaq's behavior in the first half of the year seems to show that investors can live with it. On the other hand, extending this reasoning to issues such as those I mentioned above is probably questionable, because they have reached a level of maturity that would make them almost defensive.

Wall Street's futures were in the red this morning, as investors await key employment data to get more clues about the Fed’s future monetary policy. The Job Openings and Labor Turnover Survey (JOLTS) is due at 10 a.m. ET.

Today's economic highlights:

This morning, Australia's central bank leaves its key rate unchanged at 4.10%, as expected.

The dollar is slightly up to EUR 0.9553 and GBP 0.8283. The ounce of gold falls to USD 1824. Oil is slightly down, with North Sea Brent at USD 90.35 a barrel and US light crude WTI at USD 88.70. The yield on 10-year US debt reached 4.7%. Bitcoin trades at USD 27,500.

In corporate news:

  • A U.S. federal judge has ruled that Walt Disney should face consumer lawsuits accusing the media giant of anti-competitive business practices.
  • Meta Platforms plans to offer its European users a $14-a-month subscription to access Instagram and Facebook without advertising, according to a proposal submitted to regulators, the Wall Street Journal reported Monday.
  • Boeing plans to increase production of its 737 to a record level of at least 57 units per month by July 2025, reflecting increased orders and recovering demand after two accidents in 2019, according to two sources with knowledge of the matter.
  • US President Joe Biden's administration's proposal to raise fuel economy standards until 2032 would cost General Motors $6.5 billion in fines and Stellantis $3 billion, according to a letter from the American Automotive Policy Council read by Reuters.
  • HP lost 1% before the opening, Berkshire Hathaway having sold around 5.1 million of its shares between September 28 and October 2.
  • Private equity firm Carlyle plans to stop investing in US consumer, media and retail companies, in order to focus on other sectors such as technology and financial services, according to a source close to the matter.
  • Eli Lilly will acquire Point Biopharma Global in a cash transaction valuing the target at $1.4 billion, or $12.50 per share, the two companies said Tuesday.
  • Delta Air Lines said Monday it had been informed by one of its service providers that a "small number" of engines contained parts that did not meet documentation requirements.
  • Payment processor Visa on Monday launched a $100 million venture capital fund to invest in generative artificial intelligence start-ups.
  • WeWork said Monday it had decided not to pay interest totaling about $95 million on some of its bonds, as it attempts to improve its capital structure. The company has the necessary liquidity to make these payments and may decide to make them "in the future", the company added.
  • AirBnb lost 1.7% before the opening, Keybanc having lowered its recommendation to "online weighted". Florence, one of Italy's leading tourist destinations, has also banned new short-term residential rentals on platforms such as AirBnB in its historic center.

Analyst recommendations:

  • AirBnb inc-a: KeyBanc Capital Markets downgrades to sector weight from overweight.
  • Albemarle corp: KeyBanc Capital Markets maintains its overweight recommendation with a price target reduced from USD 291 to USD 254.
  • Alexandria real: Wedbush maintains its outperform rating with a target price of USD 120.
  • American express: Morgan Stanley maintains its cautious overweight recommendation with a target price reduced from USD 188 to USD 185.
  • Baker hughes co: Wells Fargo maintains its equalweight recommendation and reduces the target price from USD 37 to USD 36.
  • Bank of america: Morgan Stanley maintains its equal weight/in-line recommendation with a target price reduced from USD 34 to USD 32.
  • Boohoo group plc: Jefferies maintains its buy recommendation with a price target reduced from GBX 85 to GBX 75.
  • Canadian national railway: Stifel maintains its hold recommendation with a price target reduced from USD 125 to USD 122.
  • Capital one: Morgan Stanley maintains its underweight/cautious recommendation with a price target reduced from USD 92 to USD 86.
  • Carnival: Peel Hunt maintains its add recommendation and reduces the target price from GBX 1400 to GBX 1100.
  • Celanese corp: KeyBanc Capital Markets maintains its overweight recommendation with a price target raised from USD 149 to USD 150.
  • Cintas corp: Baptista Research maintains its underperform recommendation with a price target reduced from USD 510 to USD 500.
  • Citigroup inc: Morgan Stanley maintains its underweight/in-line recommendation with a target price reduced from USD 45 to USD 43.
  • Computacenter pl: Barclays maintains its equalweight recommendation and raises the target price from GBP 23.85 to GBP 26.
  • Corteva: Baptista Research upgrades to buy from hold with a price target raised from USD 63.30 to USD 71.80.
  • Costco wholesale: Baptista Research maintains its underperform recommendation with a price target raised from USD 514 to USD 549.50.
  • Dell: Morgan Stanley maintains its overweight/in-line recommendation and raises the target price from USD 70 to USD 87.
  • Dow: KeyBanc Capital Markets upgrades to sector weight from underweight.
  • Enphase energy: Raymond James maintains its outperform rating and reduces the target price from USD 225 to USD 175.
  • Entain plc: Investec maintains its buy recommendation and reduces the target price from GBX 1930 to GBX 1560.
  • Fmc corp: KeyBanc Capital Markets maintains its overweight rating and reduces the target price from USD 117 to USD 107.
  • Ford motor co: Goldman Sachs maintains its neutral recommendation and reduces the target price from USD 14 to USD 13.
  • General electric: Wolfe Research maintains its outperform rating and raises the target price from USD 131 to USD 134.
  • General mills: Baptista Research upgrades to buy from hold with a price target reduced from USD 91 to USD 82.20.
  • General Motors: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 49 to USD 47.
  • Goldman sachs: Morgan Stanley maintains its equalwt/in-line recommendation with a target price reduced from USD 347 to USD 329.
  • Halliburton: Wells Fargo maintains its overweight rating and reduces the target price from USD 53 to USD 52.
  • Hewlett packard: Baptista Research downgrades to underperform from hold with a price target reduced from USD 18.10 to USD 17.80.
  • Hp inc: Baptista Research upgrades to outperform from hold with a price target reduced from USD 32.50 to USD 29.70.
  • Jpmorgan chase: Morgan Stanley maintains its overweight/in-line recommendation with a price target raised from USD 179 to USD 187.
  • Lyondellbasell: KeyBanc Capital Markets upgrades to sector weight from underweight.
  • Mcdonald's: Jefferies maintains its buy recommendation and reduces the target price from USD 340 to USD 325.
  • Moody's: Oppenheimer maintains its outperform rating and reduces the target price from USD 398 to USD 375.
  • Nike inc -cl b: Daiwa Securities maintains a neutral recommendation with a price target reduced from USD 114 to USD 100.
  • Norfolk southern: Stifel maintains its buy recommendation and reduces the target price from USD 260 to USD 253.
  • Northern trust: Morgan Stanley maintains its equal weight/in-line recommendation and reduces the target price from USD 92 to USD 86.
  • Nvidia: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 670 to USD 750.
  • Paychex: Wedbush maintains its neutral recommendation with a price target raised from USD 115 to USD 125.
  • Pepsico: JP Morgan maintains its overweight rating and reduces the target price from USD 203 to USD 188.
  • Pnc financial: Morgan Stanley maintains its underweight/in-line recommendation with a target price reduced from USD 144 to USD 142.
  • Procter & gamble: Deutsche Bank maintains its buy recommendation with a price target reduced from USD 167 to USD 166.
  • Regeneron pharm: Baptista Research downgrades to underperform from hold with a price target reduced from USD 793 to USD 767.30.
  • Royal caribbean: Morgan Stanley maintains its equal weight/in-line recommendation with a target price reduced from USD 100 to USD 95.
  • S&p global: Morgan Stanley maintains its overweight/in-line recommendation with a price target reduced from USD 450 to USD 424.
  • Schlumberger: Wells Fargo maintains its overweight recommendation and raises the target price from USD 72 to USD 76.
  • Starbucks: Jefferies maintains its hold recommendation with a price target reduced from USD 107 to USD 100.
  • Tesla inc: Goldman Sachs maintains its neutral recommendation with a price target reduced from USD 275 to USD 265.
  • Truist financial: Morgan Stanley maintains its equal weight/in-line recommendation with a price target reduced from USD 41 to USD 40.
  • Wizz air holding: Bernstein maintains its outperform rating with a price target reduced from GBX 5500 to GBX 5200.
  • Yellow cake: Berenberg maintains its buy recommendation and raises the target price from GBX 550 to GBX 658.