Tech stocks are back into investors’ good graces and everyone's jumping on the bandwagon. Thursday saw the S&P500 and Nasdaq 100 breaking through their peaks, lifted by Nvidia and Broadcom, the two stars of AI stocks. Eli Lilly, boosted by success of its weight-loss drugs and an FDA committee recommendation to approve its new Alzheimer’s treatment, also contributed to lift indices.

Meanwhile, Tesla’s stock rose on the news out of its annual shareholder meeting in Austin, where shareholders voted by a wide margin to reapprove the CEO’s $56 billion pay package. They also gave the green light to plans to move the company’s incorporation from Delaware to Texas.

The package had previously been overturned by a Delaware judge in January, who described the sum as "unfathomable". However, the court may not validate the vote. The proposed compensation package for Musk, the largest in US corporate history, includes neither salary nor cash bonus, and bases rewards on Tesla's increased market value, which could reach up to $650 billion over the ten years from 2018.

Meanwhile, Apple regain its title of world's largest capitalization, ending the session above Microsoft. But Nvidia is just 3% behind the duo, so anything can happen.

On the macroeconomic side, the latest data strengthened the case for a US rate cut, as it showed a continuing decline in inflation. Both consumer and producer prices in May came in lower than expected. Jerome Powell spoke a single rate cut this year, but a second one isn’t totally excluded. The market is betting on two rate cuts between September and December.

In Europe, the EU elections have dampened the mood on markets, and so has French president Emmanuel Macron’s decision to call snap parliamentary elections. No wonder Paris and Frankfurt lost 2% yesterday. The spread between the cost of German debt and the cost of French debt rose to 69 points, a sign of the market's mistrust of the French bond market in an explosive electoral context.

This morning, another central bank made headlines: the Bank of Japan maintained its key rates steady, as expected, but postponed the announcement of its plan to reduce asset purchases until July. The market was expecting a slightly stricter policy. The yen fell and Japanese equities strengthened their gains in the wake of the announcement.

On today's macroeconomic agenda, the focus will be on US consumer confidence thanks to the University of Michigan survey, which economists expect to improve slightly from a low level in May. Investors will also listen to comments from Chicago Fed President Austan Goolsbee and Fed Governor Lisa Cook later today.

In the Asia-Pacific region, trends are still mixed, as they have been all week. The BOJ's decision, or rather non-decision, enabled the Nikkei 225 to gain 0.3%, which was insufficient to tip the index into the green for the week. China's bad week continued with declines in both Shanghai and Hong Kong to end Friday's session. South Korea and Taiwan, on the other hand, benefited from the weight of their technology stocks to close on a high note, in the wake of semiconductors in the United States. India gained 0.2%, while Australia closed at -0.3%, for a generally bearish week. European indices are well in the red, with the Stoxx EU 600 down 0.8%. Futures on Wall Street are bearish.

Today's economic highlights:

Consumer confidence figures from the University of Michigan is today’s main indicator. The full agenda is here. 

The dollar rises 0.5% against both the euro and the pound to EUR 0.9359 and GBP 0.7879. The ounce of gold is trading at USD 2331. Oil is firm, with North Sea Brent at USD 83.04 a barrel and US light crude WTI at USD 78.54. The yield on 10-year US debt falls to 4.26%. Bitcoin trades at USD 67,100.

In corporate news:

  • Adobe climbs 14.3% in pre-market trading, as the Photoshop editor raises its sales forecast for the current financial year, amid strong demand from businesses and individuals for its artificial intelligence (AI)-based editing tools.
  • Microsoft announced on Thursday that it was postponing the launch of "Recall", a controversial artificial intelligence (AI) function that records everything the user does on the computer. The group says it wants to introduce the function to a smaller group of users first, via the Windows Insider Program (WIP), due to privacy concerns. In addition, Microsoft plans to invest 6.69 billion euros to develop new data centers in the Spanish region of Aragon, in the northeast of the country, which is becoming a major hub for cloud computing in Europe.
  • Tesla - China's market regulator announced on Friday that the American carmaker would correct the internal software of 5,836 Model 3, Model S and Model X cars imported from China, starting in July, due to safety problems. The share price gained 1.4% in pre-market trading, following a 7% gain over the previous two sessions.
  • Sirius XM gave up 2.0% in pre-market trading, as Nasdaq announced that the stock would be withdrawn from the Nasdaq 100 index and replaced by ARM HOLDINGS, whose shares gained 0.4% before the opening of trading in New York.
  • Gamestop was down 1.4% in pre-market trading after announcing the postponement of its virtual general meeting, originally scheduled for Thursday, due to technical difficulties with the website host.
  • Visa, Mastercard - The $30 billion agreement between the two payment groups to limit credit and debit card fees for merchants is now under threat, with a New York judge saying on Thursday that she was preparing to reject it.
  • Carlyle. The US private equity firm and the German development bank KfW are in talks to jointly buy most of Thyssenkrupp's warship division, three sources close to the matter have reported.

Analyst recommendations:

  • Apa Corporation: Evercore ISI downgrades to in-line from outperform with a price target reduced from USD 52 to USD 39.
  • Adobe Inc.: BNP Paribas Exane maintains its underperform recommendation and raises the target price from 450 to USD 457.
  • Bank Of America Corporation: Keefe Bruyette & Woods upgrades to outperform from market perform with a price target raised from USD 37 to USD 46.
  • Elevance Health, Inc.: Baptista Research downgrades to hold from outperform with a price target raised from USD 533.40 to USD 599.
  • Huntington Bancshares Incorporated: Piper Sandler & Co downgrades to underweight from neutral with a price target reduced from USD 13.50 to USD 11.50.
  • Ionis Pharmaceuticals, Inc.: Bernstein upgrades to market perform from underperform with a price target raised from USD 37 to USD 44.
  • Ovintiv Inc.: Evercore ISI upgrades to outperform from in-line with a target price of USD 60.
  • Twilio Inc.: Morgan Stanley downgrades to equal weight from overweight with a target price reduced from USD 70 to USD 60.
  • Zscaler, Inc.: JP Morgan upgrades to overweight from neutral with a target price raised from USD 205 to USD 230.
  • Boeing: Seaport Global maintains its buy recommendation and reduces the target price from USD 262 to USD 207.
  • Five9, Inc.: Morgan Stanley maintains its market weight recommendation and reduces the target price from 70 to USD 50.
  • Nvidia Corporation: President Capital Management Corp maintains its buy recommendation with a price target reduced from USD 1160 to USD 140.
  • Sunrun Inc.: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 24 to USD 29.
  • Hartford Financial Services Group (The), Inc.: Baptista Research initiates an Outperform recommendation with a target price of USD 118.
  • Microstrategy Incorporated: Bernstein initiates an Outperform recommendation with a target price of USD 2890.
  • Roblox Corporation: Macquarie initiates an Outperform recommendation with a target price of USD 46.
  • Wise Plc: AlphaValue/Baader Europe upgrades to buy from add with a price target reduced from GBX 1022 to GBX 1009.
  • Airtel Africa Plc: New Street Research LLP maintains its buy recommendation and raises the target price from GBX 150 to GBX 200.