In the US, the market trends continued. Despite attempts to balance the new and old economies, the gap between the Nasdaq and the Dow Jones widened. Variations remained contained, allowing the S&P500 and Nasdaq 100 to set new record closes. This trend was driven by Nvidia's rise (+2.50%) and the steady performance of the ten biggest US stocks.
 
Yesterday, Jerome Powell appeared before the US Congress for his semi-annual review. As anticipated, his speech highlighted that more positive data would reinforce confidence in inflation moving towards the Fed's 2% target, while the US economy moves away from overheating. The CME's FedWatch tool confirmed that rate bets remained unchanged, with a 75% probability of a first rate cut in September.
 
European markets experienced fluctuations, similar to Monday, with indices exploring various bullish and bearish trends before settling on losses. London fell by 0.66%, Madrid by 1.12%, Amsterdam by 0.23%, and Milan by 0.53%. The intensity of the declines varied, but the Paris stock market suffered the most, dropping by 1.56% for the third consecutive session, exceeding the European average loss. The Paris index was hit hard by the banking sector's downturn, TotalEnergies' struggles, and Dassault Systèmes' profit warning. Notably, the CAC40 found no support, with all components except Stellantis and Orange losing ground. Amidst this gloomy atmosphere, investors found some solace in Zurich, where defensive stocks like Roche, Nestlé, and Novartis performed relatively better.
 
In Asia-Pacific, several key events unfolded overnight. China released important economic statistics for June: the Consumer Price Index (CPI) and the Producer Price Index (PPI). The CPI showed a slight rise of 0.2%, below economists' forecasts, indicating a tepid recovery in domestic consumption. Meanwhile, the PPI remained negative year-on-year, signaling ongoing difficulties in China's industrial sector. These contrasts underscore the economic challenges facing Beijing amidst moderate growth. Additionally, the Central Bank of New Zealand kept its key rates unchanged at 5.5%, aligning with market expectations and reflecting cautiousness in an uncertain global economic context. Like the Fed, the RBNZ is keen to observe the effects of previous rate hikes before making new moves.
 
In the Asia-Pacific region, Tokyo gained 0.63%, China saw a moderate decline, India lost 0.8%, and Australia's ASX fell by 0.2%. As of 8:00 am, European leading indicators are bullish.

Today's economic highlights

There will be no major indicators today apart from wholesale inventories at 10:00am and US oil stocks at 10:30m. Full agenda here.

The dollar is down to 0.9238 EUR and 0.7808 GBP, while the ounce of gold is up to 2380 USD. Oil loses ground, with North Sea Brent at 84.5 USD a barrel and US light crude WTI at 80.80 USD. The yield on 10-year US debt stands at 4.304%. Bitcoin is trading at around 58,215 USD.

In corporate news:

  • Microsoft has relinquished its observer seat on the board of directors of OpenAI, which had drawn regulatory attention on both sides of the Atlantic. The tech giant believes that its presence is now obsolete due to the significant improvement in the governance of the artificial intelligence (AI) company.
  • Tyson Foods announced on Tuesday the sale of its poultry plant in Georgia to House of Raeford Farms, as the food company seeks to reduce costs amid weak demand.
  • Blackstone has hired Tyler Dickson, former global head of investment banking at Citigroup, to lead client relations for its credit and insurance business, the private equity firm announced on Tuesday.
  • Chipotle Mexican Grill announced on Tuesday that Jack Hartung will step down as CFO on March 31, 2025, and will be replaced by Adam Rymer, who has been with Chipotle for 15 years and most recently served as vice president of finance.
  • Goodyear Tire & Rubber Company is up 1.1% pre-market, as Yokohama Rubber is considering buying the group's off-road tire business for at least one billion dollars, according to Bloomberg News.
  • 3M is down 2.1% pre-market after announcing that its CFO and president, Monish Patolawala, will resign on July 31.

Analyst recommendations:

  • Amazon.com: TD Cowen maintains its buy recommendation and raises the target price from USD 225 to USD 245.
  • American Airlines Group: Barclays maintains its underweight recommendation and reduces the target price from 14 to USD 10.
  • Aon: Morgan Stanley maintains its equalwt rating and reduces the target price from USD 300 to USD 296.
  • Ares Management: Wolfe Research maintains its outperform rating and raises the target price from USD 156 to USD 174.
  • Blue Owl Capital: Wolfe Research maintains its outperform rating and reduces the target price from USD 23 to USD 22.
  • Chubb Limited: Morgan Stanley maintains its market weight recommendation and reduces the target price from 260 to USD 259.
  • Evercore: Wolfe Research maintains its outperform recommendation and raises the target price from USD 213 to USD 244.
  • Globe Life: Morgan Stanley maintains its equalwt rating and raises the target price from USD 62 to USD 65.
  • Haleon: Berenberg maintains its buy recommendation and raises the target price from 407 to GBX 410.
  • Houlihan Lokey: Wolfe Research maintains its underperform recommendation and raises the target price from USD 114 to USD 119.
  • KKR: Wolfe Research maintains its outperform recommendation and raises the target price from USD 119 to USD 142.
  • Meta Platforms: TD Cowen maintains its buy recommendation and raises the target price from USD 530 to USD 600.
  • Mondi: SBG Securities (Pty) Ltd maintains its buy recommendation and reduces the target price from 19.10 to GBP 18.50.
  • Primerica: Morgan Stanley maintains its market weight recommendation and reduces the target price from USD 245 to USD 243.
  • Prudential Financial: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 120 to USD 123.
  • Reinsurance Group Of America: Morgan Stanley maintains its equalwt rating and raises the target price from USD 216 to USD 217.
  • Southwest Airlines: Barclays maintains its equalweight recommendation and raises the target price from 26 to USD 27.
  • Spotify Technology: Redburn Atlantic downgrades to sell from neutral with a price target raised from USD 210 to USD 230.
  • The Travelers Companies: Morgan Stanley maintains its market weight recommendation and reduces the target price from 223 to USD 220.
  • Warner Music Group: Redburn Atlantic downgrades to sell from neutral with a price target raised from USD 21 to USD 24.