This rebound was led by several comments from Fed officials suggesting while a rate hike will happen in March, monetary policy will adapt later depending on the conditions. Large caps were the main beneficiaries, as evidenced by gains of 2 to 8% for stocks like Amazon, Apple, Nvidia or ASML. And a big +10.7% gain for Tesla, which is definitely not doing anything like the others. The rebound went beyond these names as shown by the 9.5% surge of the ARK Innovation ETF in yesterday's session alone. ARK is a leveraged Nasdaq, heavily invested in Tesla to boot. This is a good indicator of risk appetite.

Will January's cleansing be enough to allay the market's basic fears? Investors are relying on corporate quarterly results, which are still good, to justify their appetite. FOMO, the fear of missing out, has not gone away. This powerful trend also works when it comes to repositioning to accompany a rebound. This is what is currently at work. Today, some fifty listed companies with a market capitalization of more than $10 billion will be unveiling their accounts, including Exxon, Starbucks and General Motors before the US opening, and Alphabet, PayPal and Advanced Micro Devices after the close.

Elsewhere, European leading indicators are bullish, while In Asia, Tokyo is digesting its rebound of the previous day but closed slightly higher. Lunar New Year festivities have started in China, Hong Kong and Korea in particular, so the markets are closed. Sydney gained 0.5%. This optimistic picture should not obscure the fact that there is still a background of nervousness on markets: the VIX volatility index, while clearly on a downward slope, is still at higher-than-average levels.


Economic highlights of the day:

The final PMI indices for January are released throughout the day. In the US, the Manufacturing PMI, Construction Spending, ISM Manufacturing and the JOLTS Job Openings survey are on the agenda today. Earlier, the Australian central bank announced the end of its bond buyback program this month.

The dollar is down to 0.8890. The gold ounce is just above USD 1800. After falling yesterday, the barrel is trading at USD 89.32 for Brent and USD 88.14 for WTI. The yield on U.S. 10-year debt is unchanged at 1.77%. Bitcoin is close to USD 38,700.


On markets:

* AT&T announced Tuesday that it will spin off WarnerMedia in a $43 billion deal to combine its media business with Discovery.

* Exxon Mobil reported Tuesday a quarterly profit of $8.87 billion, the highest amount recorded by the group in seven years, which benefited from the surge in energy prices. The stock gained 1.2% in pre-market trading.

* UPS said Tuesday it expects full-year revenue to be above expectations on the back of higher delivery rates and strong demand in e-commerce. The stock jumps 5.6% in pre-market trading.

* Tesla - The automaker will recall nearly 54,000 vehicles sold in the U.S. between 2016 and 2022 that are equipped with the full autonomous driving (FSD) system that allows some models to not come to a complete stop at certain intersections. The National Highway Traffic Safety Administration (NHTSA), the U.S. national highway safety authority, believes they pose a safety risk. Tesla's stock is down 1% in pre-market trading.

* Microsoft's proposed $68.7 billion takeover of Activision will be reviewed by the Federal Trade Commission (FTC), Bloomberg reported Monday, citing a source close to the matter.

* The digital currency group announced Monday night an agreement with Meta, Facebook's parent company, to buy the assets of Diem (formerly Libra), the virtual currency the social network wanted to create. Silvergate Capital shares are up 9.4% in premarket trading.

* Pfizer, BioNTech - The two companies are expected to submit an application to the U.S. Food and Drug Administration (FDA) on Tuesday to license their COVID-19 vaccine for children ages six months to five years, the Washington Post reported Monday.

* The New York Times announced Monday night that it had acquired Wordle, an online word-based game, for an undisclosed amount.


Analyst recommendations:

  • Chevron Corporation: Wells Fargo hikes price target to $150 from $140, maintains overweight rating
  • Colgate-Palmolive: JPMorgan raises price target to $86 from $84, maintains neutral rating
  • Continental Resources: Barclays adjusts Price Target to $44 from $41, reiterates Underweight rating
  • Meta Platforms: Stifel reinstates at buy with $400 price target
  • Moderna: Redburn raised the stock to Neutral 
  • Snap: Stifel reinstates snap at buy with $45 price target
  • Sysco Corporation: Truist Securities starts at buy with $89 price target
  • The Boeing Company: Alembic Global lowers price target to $285 from $297, maintains overweight rating
  • Trane Technologies: Citigroup adjusts Price Target to $228 from $242, reiterates Buy rating
  • Twitter: Stifel reinstates at hold with $39 price target
  • Uber: Cowen lowers price target to $76 from $82, maintains outperform rating
  • Wells Fargo: Atlantic Equities upgrades to overweight from neutral. PT up 12% to $60
  • Workday: BMO Capital upgrades to outperform from market perform; price target is $295