Yesterday witnessed another remarkable chapter in the ongoing saga of record-breaking stock markets. Western markets, with a few exceptions in Scandinavia, experienced a session characterized by vibrant green. The closing figures showcased an impressive hierarchy of gains, led by the US Nasdaq's meteoric rise of 1.76%. Germany's DAX, the US S&P500, and Italy's MIB followed suit with notable increases of 0.9% each, while France's CAC40 claimed a respectable 0.5% uptick. The UK's FTSE 100, albeit more modestly, secured a 0.1% gain. However, the OMX Oslo, burdened by its heavy concentration of oil-related stocks, struggled to withstand the sharp drop in barrel prices since the weekend, finding itself at the bottom of the rankings.
 
The week ahead can be aptly described as a marathon of central bank decisions, commencing with the Federal Reserve on Wednesday, followed by the European Central Bank (ECB) on Thursday, poised for a rate hike, and concluding with the Bank of Japan on Thursday night. Notably, the records established this week revolve primarily around Apple. The technology giant's share price soared to an all-time high of $183.89 during yesterday's trading session, representing a notable increase of just over 1.5%. As a result, Apple's market capitalization currently stands at a staggering $2,890 billion, having experienced a remarkable rebound of 41.5% this year. However, it is worth noting that this capitalization falls short of the record set in 2021, albeit marginally. The explanation lies in the company's strategic share buybacks and cancellations, which have effectively reduced the number of shares in circulation. Nonetheless, the symbolic milestone of $3,000 billion looms ever closer.
 
Japan also etched its name in the annals of record-breaking indexes, as the broad Topix index scaled new heights, shattering the glass ceiling of the 1990s. While the more widely recognized Nikkei 225 has yet to reach the pinnacle, it recently attained a remarkable 33-year peak. Lastly, Tesla continues its extraordinary ascent, marking an unprecedented twelve consecutive sessions of positive growth. In relative terms, Tesla has outperformed Apple, with its share price doubling since the start of the year.
 
Shifting gears to the realm of technology and corporate acquisitions, it appears that both the United States and the UK are poised to block Microsoft's acquisition of Activision Blizzard. Furthermore, Europe is expected to indict Alphabet on Wednesday, scrutinizing Google's advertising technology practices. The tech behemoth has already faced similar charges from US authorities since January of last year. As yesterday's technological victors vie for dominance, their pursuit of artificial intelligence opportunities remains unabated.
 
In terms of macroeconomic news, all eyes are on the publication of May inflation figures in the United States at 8:30 a.m. This crucial metric assumes particular significance in anticipation of the Federal Reserve's forthcoming monetary policy decision. However, financial markets appear relatively unperturbed, as evidenced by the prevailing calmness in the dollar and bond yields. In a bid to shake things up, China's central bank made an early-morning move by raising short-term interest rates for the first time in nine months, albeit with a modest impact. Chinese property developers, on the other hand, experienced a notable upturn in their index. Experts on China's economy view this as a positive signal, suggesting that the People's Bank of China (PBOC) may ease its one-year lending rate on Thursday. Both Chinese and American investors eagerly await favorable monetary measures, with one notable distinction: the MSCI China index has experienced a 4% loss in 2023, while the S&P500 boasts a 13% gain and the Nasdaq soars with an impressive 35% surge.
 
As the sun rises over the Asia-Pacific region, the Nikkei 225 stands tall, having gained 1.8% at the close of the Japanese market, etching yet another 33-year record. Reflecting the PBOC's impetus, the CSI300 in Shanghai enjoyed a 0.3% gain, while the Hang Seng in Hong Kong surged by 0.5%. South Korea and Taiwan experienced substantial rises, with India and Australia notching slightly more modest gains. As the morning unfolds, the region finds itself enveloped in the optimistic green hue of market growth. Shortly after the opening bell, the CAC40 in France showed promising signs, garnering a 0.6% increase, pushing it to the 7293-point mark.


Today's economic highlights:
At 8:30 am, US inflation figures for May. In Europe, the German financial confidence index (ZEW) will be published at 11:00. See the full agenda here.
 
The dollar is down against the pound and the euro to EUR 0.9261 and GBP 0.7956. The ounce of gold is worth USD 1965. Oil is slightly up, with North Sea Brent at USD 73.24 a barrel and US light crude WTI at USD 68.28. The yield on 10-year US debt has risen to 3.79%. Bitcoin is trading at USD 26.100.


In corporate news:
Oracle - The group, whose shares hit an all-time high in Monday's trading session, reported better-than-expected quarterly results after the close on Wall Street, driven by a surge in demand for its cloud services from companies deploying artificial intelligence (AI). The stock is up in pre-market trading.
 
Microsoft, Activision Blizzard - The Federal Trade Commission (FTC) has asked a court to temporarily block any final agreement on Microsoft's acquisition of Activision Blizzard. According to the FTC, the deal would give Microsoft "the ability and increased incentive to retain or degrade Activision's content in a manner that would substantially lessen competition".
 
Alphabet - European Union competition authorities could order Google to sell part of its advertising technology business as part of a new anti-competitive complaint.
 
Bunge, Archer-Daniels-Midland - US grain trader Bunge, the world's largest oilseed processor, and Glencore-backed Viterra announced Tuesday an $18 billion merger agreement, creating one of the world's largest agricultural trading companies.
 
Advanced Micro Devices - The stock is up in pre-market trading, as the chipmaker is due to present further details on its "artificial intelligence superchip" later today.
 
Apple - UBS downgraded its recommendation on the iPhone maker from "buy" to "neutral", saying the group's growth remains under pressure due to weakness in developed markets. The stock is down in pre-market trading.
 
Intel is in talks with Arm, owned by SoftBank Group, to be a cornerstone investor in the chip designer's IPO. The share price rises in pre-market trading.
 
JD.com, Alibaba, Baidu, Netease - US-listed shares of Chinese companies rise 1.9% to 4.7% in pre-market trading, as the People's Bank of China (PBOC) cuts its key short-term interest rate for the first time in 10 months, in a bid to restore market confidence in the world's second-largest economy.


Analyst recommendations:
  • Apple: UBS downgrades buy recommendation to neutral. Price target raised to $190.
  • Adobe: Evercore remains buy. Price target revised upwards to $475.
  • Capri Holdings:  Morgan Stanley moved to equal-weight from overweight. Price target up 9.5% to $40.
  • Carnival Corporation: BofA Securities adopts a positive opinion and upgrades the stock from neutral to buy. Price target raised to $20.
  • EastGroup Properties: Citi elevated the proposal to buy from neutral. Price target set to $195.
  • EOG Resources: Goldman Sachs cut the recommendation to neutral from buy. PT set to $130, implies a 14% increase from last price.
  • Devon Energy: Goldman Sachs raised to buy from neutral. PT up 17% to $58.
  • First Horizon: J.P. Morgan cut the recommendation to neutral from rating suspended. PT set to $13.
  • Oracle: Mizuho Securities raised the target to $150 from $116. Maintains buy rating.
  • Salesforce: J.P Morgan stays optimist. Price target set to $230.
  • Urban Outfitters: Morgan Stanley upgrades to overweight from equal-weight. PT set to $41.