American investors shrugged off the Federal Reserve's cautious stance on interest rates, propelling the session to a strong finish. The remarkable performance was evident across the three major indexes: the S&P500, Dow Jones, and Nasdaq 100, all surging by more than 1%. Notably, the S&P500 has achieved an impressive streak of six consecutive sessions in positive territory, a feat not seen since November 2021. In fact, within the last fifteen trading days, the broad U.S. index has only experienced three instances of decline. The Nasdaq 100 has been a standout performer, recording a remarkable gain of nearly 39% since the year began. This surpasses early-year predictions, demonstrating investors' increasingly robust appetite for risk. Their conviction in the resilience of the U.S. economy in the face of a high interest-rate environment is growing. It is worth noting that apart from a concerning alert regarding regional banks in the USA, the cataclysmic prophecies anticipated by many market participants have yet to materialize. This is particularly evident in the real estate market, private debt market, and the broader economy, which has so far avoided a recession.

The Bank of Japan (BOJ) adhered to economists' predictions by keeping rates unchanged. With inflation finally gaining traction in the Archipelago after years of stagnation, coupled with a thriving local stock market and strengthening growth, the central bank has little inclination to deviate from its ultra-accommodative policy. In contrast, the European Central Bank (ECB) made the decision to raise rates and indicated the likelihood of further increases, coinciding with the Federal Reserve's recent pause in its monetary tightening cycle. Today's macroeconomic landscape will be dominated by the release of the definitive May inflation figures for the eurozone and the University of Michigan's consumer confidence index in the United States. Given the significance of the labor market and consumer sentiment as vital factors for the Fed's monetary policy, this afternoon's indicator will be subject to close scrutiny. Shifting gears to the energy sector, oil markets have stirred awake, responding to surging European gas prices triggered by supply concerns stemming from pipeline malfunctions and the anticipated closure of the largest gas field in continental Europe, located in the Netherlands, slated for this autumn.

The morning session in the Asia-Pacific region concluded on a positive note, witnessing notable gains across major markets, except for Taiwan. Australia excelled with an impressive surge of over 1%, primarily attributed to its energy sector, while Hong Kong showcased the strength of its technology sector. Today marks the occurrence of the "four witches" session, as it is the third Friday of the quarter-end month, which necessitates the updating of expiring futures contracts. This phenomenon often introduces volatility and higher trading volumes. Meanwhile, European leading indicators are currently displaying a cautious yet optimistic outlook, following a mixed session yesterday where the French CAC40 experienced a 0.5% decline while the UK FTSE 100 achieved a 0.3% gain. 

Today's economic highlights:

The University of Michigan's consumer sentiment index will focus attention at 10:00 am. Agenda here.

The dollar falls to 0.9130 EUR and 0.7815 GBP. The ounce of gold is trading at 1965 USD. Oil rebounded, with Brent North Sea crude at 75.54 USD a barrel and WTI US light crude at 70.68 USD. The yield on 10-year US debt stands at 3.74%. Bitcoin rises to 25,500 USD.

In corporate news:

Adobe raised its sales and earnings forecasts, buoyed by its cloud computing services. The stock gained 3.5% in pre-market trading.
Intel is to invest up to $4.6 billion in a new semiconductor plant in Poland, due to be operational in 2027.
Amazon has received the green light from London to buy US vacuum cleaner manufacturer IROBOT, the CMA announced on Friday. iRobot shares gained 21.7% in pre-market trading.
Virgin Galactic - The space tourism company announced that its first commercial flight would take place at the end of June, followed by a second flight in early August. The share price soared by 39.4% in pre-market trading.
Microsoft - Its shares, buoyed by the market's enthusiasm for artificial intelligence, hit a new record high on Thursday, taking the group's capitalization to $2,590 billion. Apple also hit a record closing price of $186.01 on Thursday, and NVIDIA reached an all-time session high of $432.89.
Toast - BTIG starts monitoring at "neutral".

Analyst recommendations:

  • Adobe: Goldman Sachs continues to buy. Price target raised to $550.
  • American Express: Citigroup still short. Price target down to $148 from $150.
  • Atlanticus: Jefferies initiated coverage with a recommendation of buy. PT upgrades 16% to $50.
  • Bio-Rad Laboratories: Wells Fargo Securities reinstated coverage with a recommendation of overweight. PT up 45% to $550.
  • Carnival: Citi raised the target to $18 from $14. Maintains buy rating.
  • Informa: HSBC remains Buy with price target raised from £7300 to £8800.
  • Mears Group: Peel Hunt cut the recommendation to add from buy. Price target set to 275 pence.
  • MorphoSys: Wells Fargo set price target to $17, with a recommendation of buy.
  • Neogen: Wells Fargo Securities initiated coverage with a recommendation of overweight. PT set to $22.
  • RPC: Citi cut the recommendation to sell from neutral. PT down 10% to $7.
  • Wells Fargo: Piper Sandler neutral on the company. Price target revised upwards from $41 to $43.