America's federal government has reopened at last. The new funding deal runs only until January 30th, which means Washington has bought itself a little time, kicking the can down the road.

For financial markets, this is welcome news, albeit in a muted way. Investors are once again preparing for the steady flow of economic numbers on which they normally depend. But after the longest shutdown in American history, even this comes with a caveat: the numbers themselves may be less dependable than usual. Data collection in October stalled, November's window was narrow, and officials now warn that some snapshots - such as the employment and inflation reports for October - may never see the light of day. Traders will simply have to imagine what might have been. The Federal Reserve, too, must work with imperfect information.

Markets, of course, do not wait for perfect clarity. Futures were slightly lower, and the dollar softer, as investors considered the possibility that fresh data may reveal a weaker economy than previously thought. Private-sector clues have not helped soothe nerves: ADP counts more than 11,000 jobs shed each week through late October, while retail job postings fell sharply. Traders who recently saw a 70% chance of a rate cut in December now place that probability near 54%. Several Fed officials have expressed doubts about cutting at all, prompting markets to dial down their optimism.

Even so, investors have found bright spots where they can. Cisco, riding a wave of demand fuelled by artificial intelligence and data-center expansion, raised its forecasts and was rewarded with a cheerful jump in its share price. JD.com also pleased markets with solid results. Yet elsewhere, the glow of the AI boom has dimmed. High-flying tech firms have surrendered some altitude as investors rotate into more defensive corners of the market. The Dow, usually the tortoise in the race, has benefitted handsomely.

Energy markets, too, find themselves at an awkward moment. The International Energy Agency sees rising inventories today and even larger surpluses looming in 2026. Oil prices, unsure whether to focus on glut or future scarcity, have chosen instead to drift politely in a narrow range. Gold, by contrast, has enjoyed a small rally as investors imagine that weaker data could justify more rate cuts.

Yesterday, stock indices continued to climb, galvanized by the end of the budget deadlock in the United States. But the technology engine is experiencing a few hiccups, as the Nasdaq has posted four declines in the last five sessions amid this sea of green.

A company like Microsoft has posted a decline of more than 3% in three months, while the market has gained just over 6%. This 10% underperformance shows that the company has not been entirely convincing on AI, due to lavish capital expenditure. It's not a disaster either, because the share price is still up 20% over a year, but it shows that investors have started to secure their opulent gains on the AI theme. Meta Platforms is perhaps even more symptomatic. The share price is now only up 4% over the year, after falling 23% in three months. Meta initially caused concern due to a certain delay in AI, then its boss Mark Zuckerberg began recruiting across the board and investing tens of billions of dollars. A bit like when he became passionate about the Metaverse. But this time, he rode the main wave, which allowed the stock to triple in 2023 before gaining another 65% in 2024. Since then, things have been less fun, and Meta's AI dream team, recruited from the competition at great expense, has found itself facing what looks like a good old-fashioned redundancy plan. The company's leading AI guru (not Mark Zuckerberg, but Yann LeCun) is even on his way out.

The question now is whether profit-taking will lead to a more pronounced market rotation in favour of undervalued sectors.

In Asia-Pacific, the picture is mixed this morning. Japan, mainland China, India and South Korea are up slightly. The Hang Seng is stable in Hong Kong, while Taiwan and Australia are losing some ground. Leading indicators are mixed in Europe. 

Today's economic highlights:

On today's agenda: the producer price index in Japan; in the United Kingdom, the quarterly GDP and the monthly GDP; industrial production in the eurozone; in the United States, the consumer price index, new unemployment claims, DOE crude oil inventories, and the federal budget balance. See the full calendar here.

  • Dollar index: 99,140
  • Gold: $4,238
  • Crude Oil (BRENT): $63.09 (WTI) $58.90
  • United States 10 years: 4.1%
  • BITCOIN: $103,010

In corporate news:

  • Salesforce signed a definitive agreement to acquire Doti, further expanding its enterprise software portfolio.
  • RTX will take a $300 million non-cash charge in Q4 as part of a $2.5 billion pension obligation transfer to Prudential Financial.
  • Michael Burry has deregistered Scion Asset Management, signaling a retreat from public investing while criticizing AI-driven accounting by Nvidia, Palantir, Microsoft, and Alphabet.
  • A jury ordered Boeing to pay over $28 million to a 737 MAX crash victim's family, marking the first such verdict in ongoing litigation over the 2019 Ethiopia crash.
  • Walt Disney missed Q4 revenue expectations due to cable TV weakness, but posted streaming and park gains, and announced plans to raise its dividend by 50% and double share buybacks in fiscal 2026.
  • The EU launched a new Digital Markets Act investigation into Alphabet's Google, scrutinizing its policy that might penalize news publishers over third-party content partnerships.
  • Tradr launched leveraged ETFs focused on Bloom Energy, Celestica, NANO Nuclear, and Synopsys, expanding retail access to volatile tech themes.
  • IBM and Polytechnique Montréal launched an AI initiative aimed at strengthening the forestry supply chain in Canada.
  • Gopuff raised $250 million in a funding round led by Eldridge Industries, with participation from Valor Equity, Baillie Gifford, and others.
  • Hilton was named the world's No. 1 best workplace again, maintaining its leadership in corporate culture recognition.
  • Pfizer is selling its remaining stake in BioNTech, offering 4.55 million ADRs priced between $108 and $111.70.
  • Starbucks baristas launched an unfair labor practice strike across more than 40 U.S. cities, protesting working conditions.
  • Chevron is investing in oil exploration in Argentina's Vaca Muerta formation, showing confidence in long-term oil demand growth.
  • Ampco-Pittsburgh reported a 35% increase in Q3 adjusted EBITDA and anticipates annual EBITDA improvement after exiting the UK market.
  • Corby reported strong Q1 revenue growth and adjusted earnings, driven by expansion in the ready-to-drink sector.
  • Investcorp Credit Management BDC reported a decrease in net asset value while announcing Q4 2025 distributions.
  • Flutter Entertainment lowered its profit forecast due to regulatory changes and high payouts, despite Q3 revenue and EBITDA growth.
  • Delta Air Lines faces earnings impacts from a government shutdown and flight cancellations but anticipates strong Q4 earnings.
  • Amazon is under scrutiny for alleged tax evasion by sellers in China, impacting Nasdaq despite Dow reaching a record high.

Analyst Recommendations:

  • Amd (Advanced Micro Devices): Daiwa Securities upgrades to buy from outperform with a price target raised from USD 275 to USD 300.
  • Amdocs Limited: Wolfe Research downgrades to peerperform from outperform and reduces the target price from USD 105 to USD 87.
  • Ati Inc.: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 120.
  • Autozone, Inc.: Goldman Sachs upgrades to buy from neutral with a price target raised from USD 4090 to USD 4262.
  • Carpenter Technology Corporation: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 380.
  • Circle Internet Group, Inc.: JP Morgan upgrades to overweight from underweight with a price target raised from USD 94 to USD 100.
  • Comcast Corporation: Baptista Research downgrades to outperform from buy and reduces the target price from USD 34.20 to USD 33.70.
  • Dollar Tree, Inc.: Goldman Sachs downgrades to sell from buy and reduces the target price from USD 133 to USD 103.
  • Floor & Decor Holdings, Inc.: Goldman Sachs upgrades to neutral from sell and reduces the target price from USD 80 to USD 71.
  • Nike, Inc.: Wells Fargo upgrades to overweight from equalweight and raises the target price from USD 60 to USD 75.
  • The Cooper Companies, Inc.: Wells Fargo downgrades to market weight from overweight with a target price of USD 72.
  • Willscot Holdings Corporation: Morgan Stanley downgrades to market weight from overweight and reduces the target price from USD 37 to USD 21.
  • Applied Materials, Inc.: Arete Research maintains its buy recommendation and raises the target price from USD 231 to USD 280.
  • Cisco Systems, Inc.: Piper Sandler & Co maintains its neutral recommendation and raises the target price from USD 70 to USD 86.
  • Dexcom, Inc.: Rothschild & Co Redburn maintains its buy recommendation and reduces the target price from USD 115 to USD 90.
  • Duolingo, Inc.: Baird maintains its neutral recommendation and reduces the target price from USD 280 to USD 180.
  • Eli Lilly And Company: CICC maintains its neutral recommendation and raises the target price from USD 801 to USD 1060.
  • Flowers Foods, Inc.: Truist Securities maintains its hold recommendation and reduces the target price from USD 15 to USD 10.
  • Fmc Corporation: Barclays maintains its equalweight recommendation and reduces the target price from USD 22 to USD 16.
  • Lyft, Inc.: Loop Capital Markets maintains its buy recommendation and raises the target price from USD 20 to USD 31.
  • Micron Technology, Inc.: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 220 to USD 325.