November took investors by surprise. It was a positive surprise, with stock market indices soaring in some cases quite spectacularly. The S&P500, for example, climbed 8.9%. Bloomberg points out that this was the best November since 1980, with the exception of 2020, which was marked by post-covid frenzy (or rather, full covid frenzy). The US broad index is soaring to 4,568 points at the start of December 1, whereas less than two months ago Wall Street thought it would be at 4,370 points by the end of the year (based on the average forecast of investment bank analysts). That said, it's still possible, but the ingredients don't seem to be in place for a big slap in the face in December. Europe followed suit, with major disparities between stock markets.

As for 2023 performances after 11 months, they are often very solid. Here are three examples, as well as a reverse example:

  • The most unlikely: FTSE/ATHEX Midcap: +50%. The Greek mid-cap index, which is actually quite small. Led by Ideal Holdings and Fourlis, companies I confess I've never heard of.
  • The least unexpected: Nasdaq 100: +45.8%. Not much to say: I'm putting it in the boring category, like inflation, the Fed and Elon Musk. Boring but a winner.
  • Investors' darling of 2023 (excluding Nasdaq): Nikkei 225 (+28%). The craze for Japanese equities is real, after the Tokyo Stock Exchange's long period in the wilderness and with the return of inflation in the country.
  • The "another time perhaps" prize: Hang Seng (-14%). Every year is supposed be the year of Chinese stocks. But it fails every time. The Hong Kong index has lost ground in each of the last three years. There's still a month and a hypothetical Christmas rally to try and climb back up from a 14% handicap.

In other news, at a meeting yesterday, OPEC+ decided to continue reducing its oil supply, in order to support prices. If the cartel is right, the production surplus should be wiped out by the first quarter of 2024. For all that, black gold fell yesterday. "The market is concerned that these announced cuts were voluntary and not OPEC-wide cuts", notes ING's "Mr Oil", Warren Patterson, who believes this illustrates the complicated relationship between the organization's members, who struggle to agree. If new measures are needed in the future, Patterson continues, it will be increasingly difficult for the group to respond.

On the statistical front, the weakening of inflation in Europe was confirmed, even exceeding forecasts, while the PCE price index in the USA was in line with expectations, although decelerating there too. Today's session will be dominated by the refined version of the manufacturing PMI indicators for the major economies, and above all by Jerome Powell's participation in a conference in Atlanta, later today. If he has a message to get across, the Fed boss should take advantage of it, as US central bankers enter a blackout period on December 2, ahead of the central bank meeting scheduled for December 13. To avoid speculation, Fed members are required to remain silent for ten days or so prior to monetary policy decisions. Nevertheless, there is little at stake at the December 13 meeting: the market is virtually convinced that the Fed will leave rates unchanged. The central bank's inaction would be the best Christmas present for investors.

China's Caixin manufacturing PMI, published overnight, returned to the expansion zone at 50.7 points, well above expectations (49.6). Good news, then, for the indefatigable groupies of the Chinese economy, who have been languishing for several quarters, even though the official Chinese PMI, published on Thursday, said otherwise. The two indicators do not have the same basis, but it has to be said that the reliability of these data, sometimes slavishly followed by investors, would benefit from being strengthened.

In premarket trading, futures were in the red, as investors traded cautiously ahead of Jerome Powell’s speech.

Today's economic highlights:

Lots of indicators today, including manufacturing PMIs from Japan, China, France, Germany, the Eurozone and the UK, before the US PMI. We also have construction spending and the ISM manufacturing index. The full agenda is here.

The dollar is worth EUR 0.9191 and GBP 0.7914. The ounce of gold stabilizes at USD 2034. Oil is little changed, with North Sea Brent at USD 80.63 a barrel and US light crude WTI at USD 75.80. The yield on 10-year US debt stands at 4.33%. Bitcoin is trading at around USD 38,000.

In corporate news:

  • Pfizer said on Friday that it would not advance an oral weight-loss drug into late-stage development, after a high rate of side-effects were reported during a mid-term review.
  • Meta Platforms - EU regulators ordered the group on Friday to provide details of measures taken to combat child pornography content on Instagram by December 22.
  • General Motors - A U.S. highway safety regulator announced on Friday the opening of an investigation into 73,000 Chevrolet Volt hybrid cars following several problems.
  • Alphabet - Google, the Internet giant's main subsidiary, has asked the UK competition authority to take action against Microsoft , claiming that the Windows publisher's business practices in the cloud computing market have significantly harmed its rivals, shows a letter seen by Reuters.
  • Dell fell by 3.8% in pre-market trading, as the PC manufacturer reported lower-than-expected third-quarter sales due to a slower-than-expected recovery in demand.
  • Tesla, whose shares fell by 1.66% on Thursday, lost a further 0.80% in pre-market trading on Friday, following the presentation of its futuristic Cybertruck vehicle, which will be priced higher than expected.
  • Ulta Beauty climbed 11.3% in pre-market trading following the promotion of Paula Oyibo to CFO, replacing Scott Settersten. The cosmetics group also raised its sales forecast for this year.
  • Marvell Technology dropped 5.1% on the premarket after the company announced a lower-than-expected sales forecast for the fourth quarter.

Analyst recommendations:

  • Abbvie Inc.: Raymond James maintains its outperform rating and raises the target price from USD 177 to USD 181.
  • Admiral Group Plc: Keefe Bruyette & Woods maintains its outperform rating and raises the target price from GBX 2560 to GBX 3000.
  • Albemarle Corporation: Jefferies maintains its buy recommendation and reduces the target price from USD 200 to USD 175.
  • Alexandria Real Estate Equities, Inc.: JMP Securities maintains its market outperform recommendation and reduces the target price from USD 160 to USD 140.
  • Ashtead Group Plc: HSBC maintains its buy recommendation and reduces the target price from 68.60 to GBP 54.30.
  • Block, Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from USD 75 to USD 90.
  • Boeing: Baird maintains its outperform rating and raises the target price from USD 250 to USD 300.
  • Carrier Global Corporation: CICC initiates an Outperform recommendation with a target price of USD 60.50.
  • Chewy, Inc.: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 29 to USD 21.
  • Chipotle Mexican Grill, Inc.: RBC Capital maintains its outperform rating and raises the target price from USD 2185 to USD 2425.
  • Cintas Corporation: Barclays maintains its overweight recommendation and raises the target price from USD 550 to USD 630.
  • Datadog, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 118 to USD 138.
  • Dell Technologies Inc.: Raymond James maintains its outperform rating and raises the target price from USD 68 to USD 82.
  • Digital Realty Trust, Inc.: HSBC initiates a reduce recommendation with a target price of USD 112.
  • Ecolab Inc.: Barclays maintains its equalweight recommendation and raises the target price from USD 200 to USD 215.
  • Equifax Inc.: Goldman Sachs maintains a neutral recommendation with a price target raised from USD 173 to USD 195.
  • Equinix, Inc.: HSBC initiates a Buy recommendation with a target price of USD 875.
  • Fair Isaac Corporation: Goldman Sachs maintains its buy recommendation and raises the target price from USD 1058 to USD 1156.
  • Ibm: DZ Bank AG Research maintains its buy recommendation and raises the target price from USD 152 to USD 175.
  • Interactive Brokers Group, Inc.: Redburn Atlantic initiates a Buy recommendation with a target price of USD 100.
  • Iqvia Holdings Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 215 to USD 250.
  • Legal & General Plc: Keefe Bruyette & Woods downgrades to underperform from market perform with a price target reduced from GBX 250 to GBX 210.
  • Lpl Financial Holdings Inc.: Redburn Atlantic initiates a neutral recommendation with a target price of USD 240.
  • Lululemon Athletica Inc.: Citigroup maintains its buy recommendation and raises the target price from USD 450 to USD 520.
  • Martin Marietta Materials, Inc.: BNP Paribas Exane maintains its outperform recommendation and raises the target price from USD 572.50 to USD 605.50.
  • Marvell Technology Group Ltd: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from USD 80 to USD 70.
  • Meta Platforms, Inc.: Canaccord Genuity maintains its buy recommendation and raises the target price from USD 375 to USD 390.
  • Mongodb, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 450 to USD 470.
  • Moody's Corporation: Deutsche Bank maintains its hold recommendation and raises the target price from USD 337 to USD 373.
  • Netflix, Inc.: Canaccord Genuity maintains its buy recommendation and raises the target price from USD 525 to USD 550.
  • Pearson Plc: Deutsche Bank downgrades to hold from buy with a target price reduced from GBX 1100 to GBX 1050.
  • Prudential Plc: Keefe Bruyette & Woods maintains its outperform rating and reduces the target price from 1250 to GBX 1200.
  • Rio Tinto Plc: Liberum upgrades to buy from hold with a price target raised from GBX 4490 to GBX 6100.
  • S&P Global, Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from USD 436 to USD 488.
  • Salesforce.com, Inc.: Fubon Securities maintains its buy recommendation and raises the target price from USD 251 to USD 295.
  • Servicenow, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 641 to USD 765.
  • Snowflake Inc.: President Capital Management Corp upgrades to buy from neutral with a price target raised from USD 160 to USD 220.
  • Spirax-Sarco Engineering Plc: RBC Capital maintains its underperform recommendation and reduces the target price from 9000 to GBX 8000.
  • Spotify Technology S.A.: Citi downgrades to neutral from buy with a target price of USD 190.
  • Tesco Plc: JP Morgan downgrades to underweight from neutral with a price target reduced from GBP 2.40 to GBP 2.30.
  • Ulta Beauty, Inc.: Citigroup remains neutral recommendation with a price target raised from USD 440 to USD 485.
  • Vulcan Materials Company: BNP Paribas Exane maintains a neutral recommendation with a price target raised from USD 231 to USD 251.50.
  • Walt Disney Company (The): Morningstar maintains its buy recommendation and reduces the target price from USD 145 to USD 115.
  • Whitbread Plc: Panmure Gordon & Co. Limited maintains its buy recommendation and raises the target price from GBX 3720 to GBX 4450.
  • Workday Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 274 to USD 309.