This report, the Federal Reserve's preferred inflation measure, is expected to show a moderation in price pressures. Market participants are anticipating about two rate cuts this year, with a 65% chance of a cut in September, according to the CME FedWatch tool.  The data is an important step towards reinforcing the current belief that the Fed could start cutting rates in September. In Europe, the ECB already implemented a first rate cut.

Earnings reports from companies like FedEx, Carnival Corp, Micron Technology, and Walgreens Boots Alliance are also expected. Additionally, President Joe Biden and Donald Trump will debate in Atlanta on Thursday, with both candidates closely matched in national opinion polls.

Equity markets are coming off a mixed week, which saw the artificial intelligence bet take a bit of a beating. As this has been the market's emergency engine for several months, the indices suffered.

Friday was triple Witching Day, when several monthly and quarterly options expire, being the 3rd Friday of a quarter-end month. Investors clearly took advantage of the opportunity to take some profits on the world's most congested bet that is artificial intelligence. The main victims were the semiconductor sector, with Nvidia and Broadcom as the main punching bags. Apple, which recently struggled to get back into the AI game, also fell victim to the headwinds. As a result, these three stocks lost between 2 and 4.4% over the week.

There were two notable exceptions. Microsoft regained 1.6% over the week, a sign that when doubt mounts, financiers still find in the Redmond group the best of both worlds: quiet strength combined with AI. Microsoft has regained its crown as the world's leading capitalization after its weekly chase with Apple and Nvidia. And while we're on the subject of heavyweights, Amazon is, year in, year out, closing in on the $2,000 billion mark in market capitalization, after recovering 3% over the week, the best performance among the 30 largest US caps. The stock was sensitive to the development of the narrative around the huge volumes of data processing induced by AI. The server centers of AWS, Amazon's most profitable subsidiary, place the group in the category of the industry's shovel and pickaxe sellers, i.e. those who make money at the start of a gold rush, regardless of the success of the prospectors (of AI, in this case).

In the end, the S&P 500 nonetheless posted a third consecutive weekly gain, thanks to consumer discretionary and energy, not artificial intelligence.

In Europe, the indices got back on track. The week was tinged with a bright red in the wake of the announcement of early parliamentary elections in France. The CAC40 lost over 6%. It recovered 1.7% last week. It's a rebound, but a tiny one, and the underlying situation remains unchanged. Investors have increased their risk premium on the French market, against a backdrop of political fears. Far-right and far-left majorities, or no majority at all, are considered destabilizing factors by the business community. The gap between German and French public debt has widened to 80 points, compared with less than 50 points before the crisis. This means that France has to offer a higher premium than before to convince investors to buy its debt rather than that of Germany. In turn, this has weakened France's financial sector. Over one month, banks with a strong focus on France, such as Crédit Agricole and Société Générale, plunged by over 15%. BNP Paribas held up better, but lost its position as the eurozone's leading bank to Spain's Banco Santander. The behavior of the banks gives an idea of how much investors are dreading the forthcoming elections. So, there will be a lot of nervousness this week as we approach the first round of parliamentary elections on Sunday.

In Asia Pacific this morning, speculation continues that the Bank of Japan may intervene to support the yen. This did not prevent Tokyo from gaining 0.7% after a negative weekly result. China continues to dig into its 2024 earnings capital, losing 0.2% on the mainland and 1% in Hong Kong. In Seoul (-0.9%) and Taiwan (-1.8%), the mood was dampened by the decline in AI-related stocks. Australia (-0.8%) is no more buoyant. India ended flat. European indices are in the green, while futures on Wall Street are mixed.

Economic highlights:

The dollar is down to EUR 0.9321 and GBP 0.7897. The ounce of gold lost ground and is now worth USD 2325. Oil recovers after falling over the weekend, with North Sea Brent at USD 84.57 a barrel and US light crude WTI at USD 80.81. The yield on 10-year US debt is holding steady at 4.25%. Bitcoin trades at USD 61,000.

In corporate news :

  • Meta Platforms has discussed with Apple the integration of its generative artificial intelligence (AI) model into the recently unveiled AI system for iPhones, the Wall Street Journal revealed on Sunday.
  • Apple - The group's App Store violates European rules, European Union (EU) antitrust regulators said Monday. The EU will take further action against the group, said Commissioner Thierry Breton in a message on X.
  • Eli Lilly said Friday that its weight-loss drug Zepbound helped resolve obstructive sleep apnea in two late-stage trials. RESMED , Eli Lilly's competitor, lost nearly 12% before the opening.
  • Nvidia has signed an agreement to deploy its AI technology in data centers owned by Qatari telecom group Ooredoo in five Middle Eastern countries, Ooredoo's CEO told Reuters.
  • Broadcom - ByteDance is working with the chipmaker on the development of an advanced AI processor, two sources familiar with the matter said. The American group gained 1.6% before the opening.
  • Boeing - A Boeing 777 operated by KLM returned to Amsterdam's Schiphol airport on Sunday after reporting a technical problem, Dutch air traffic control said. Boeing shares shed around 1% in pre-market trading.
  • UPS will sell its Coyote Logistics business unit to RXO for $1.025 billion, the two companies announced on Sunday. RXO gained 9.5% before the opening.
  • Alaska Airlines - The union representing Alaska Airlines flight attendants said Friday it had reached a tentative agreement with the carrier.
  • Under Armour lost 1% after agreeing to pay $434 million to settle lawsuits filed in 2017 accusing it of manipulating its financial figures.

Analyst recommendations:

  • Accenture Plc: Goldman Sachs changes recommendation to neutral with a target price of USD 335.
  • The Liberty Siriusxm Group: Evercore ISI downgrades to in-line from outperform with a price target reduced from USD 36 to USD 27.
  • Ibm: Goldman Sachs upgrades to buy from dropped coverage with a target price of USD 200.
  • Planet Fitness, Inc.: TD Cowen upgrades to buy from hold with a price target raised from USD 66 to USD 92.
  • Sarepta Therapeutics, Inc.: Mizuho Securities upgrades to outperform from buy with a price target raised from USD 179 to USD 200.
  • Sirius Xm Holdings Inc.: Evercore ISI downgrades to in-line from underperform with a target price reduced from USD 4.25 to USD 3.25.
  • Synovus Financial Corp.: Barclays upgrades to overweight from equalweight with a price target raised from USD 39 to USD 46.
  • Walgreens Boots Alliance, Inc.: Barclays maintains its underweight recommendation and reduces the target price from 21 to USD 15.
  • Celsius Holdings, Inc.: BNP Paribas Exane initiates an Outperform recommendation with a target price of USD 87.
  • Church & Dwight Co., Inc.: BNP Paribas Exane initiates a neutral recommendation with a target price of USD 114.
  • Epam Systems, Inc.: Goldman Sachs initiates a neutral recommendation with a target price of USD 200.
  • Ge Vernova Inc.: Haitong International Research Ltd initiates an Outperform recommendation with a target price of USD 211.83.
  • Humana Inc.: Morgan Stanley initiates an Equal Weight recommendation with a target price of USD 374.
  • Keurig Dr Pepper Inc.: BNP Paribas Exane initiates a neutral recommendation with a target price of USD 36.
  • Affirm Holdings, Inc.: Goldman Sachs upgrades to buy from neutral with a price target raised from USD 21 to USD 42.
  • Pepsico, Inc.: BNP Paribas Exane initiates a neutral recommendation with a target price of USD 174.
  • Britvic Plc: Investec upgrades to buy from hold with a price target raised from GBX 1050 to GBX 1350.
  • Flutter Entertainment Plc: Peel Hunt downgrades to hold from buy with a price target reduced from GBX 16000 to GBX 15000.
  • Great Port Est: Bernstein downgrades to market perform from underperform with a price target reduced from GBX 395.30 to GBX 394.
  • Gsk Plc: AlphaValue/Baader Europe upgrades to buy from add with a price target raised from GBX 2131 to GBX 2145.
  • Workspace Group Plc: Bernstein upgrades to outperform from market perform with a price target raised from GBX 554.60 to GBX 686.