Another One Bites the Dust

Wall Street continues to notch new highs, with investors firmly focused on the Fed's next moves, while Europe looks on as French politics stage yet another collapse-Parliament rejecting François Bayrou's government and forcing Emmanuel Macron to find a replacement-an upheaval that markets, for now, are largely brushing aside.

Wall Street remains firmly focused on the labor market. The Bureau of Labor Statistics will release its benchmark employment revision this afternoon, a technical adjustment that rarely makes headlines—except when jobs data suddenly becomes politically charged. That’s the case now. Markets are bracing for a significant downward revision of roughly 725,000 jobs, which would confirm that the labor market is softer than previously thought. If that happens, it would strengthen expectations for a Fed rate cut next week. In the current mindset, any sign of economic weakness is welcomed by investors as fuel for lower rates. 

 

Elsewhere in the US, news is relatively light. No major earnings releases today, and trade tensions remain contained to measures already announced. Political chatter briefly spiked after the publication of a birthday card allegedly sent by Donald Trump to Jeffrey Epstein, but beyond the headlines, it has little market impact.

 

Across the Atlantic, French politics have taken center stage again. François Bayrou’s government has collapsed in a manner the local press describes with near theatrical disdain—“shipwreck,” “second-class funeral,” “own goal.” Bayrou will present his resignation to Emmanuel Macron, who is expected to swiftly appoint a successor. Markets, however, were largely unmoved: the CAC 40 closed up 0.8% yesterday, alongside gains of 0.9% for the DAX and 0.8% for the Euro Stoxx 50. French bond yields did spike briefly, with the 10-year climbing to 3.48%—just above Italy’s—but eased back by the close. While political instability tends to weigh on confidence and investment, the reaction so far suggests Bayrou’s downfall was well anticipated.

 

In Asia-Pacific trading, performance is mixed. Taiwan led with a 1.1% gain, followed by South Korea (+1%) and Hong Kong (+0.5%), all supported by strength in technology stocks. Australia fell 0.7%, while mainland China and Japan slipped modestly. India edged up 0.2%. The MSCI Asia-Pacific index has now reached its highest level since February 2021.

Today's economic highlights:

Only the French industrial production today. See the full agenda here.

• Dollar index: 97,53
• Gold: $3,650
• Crude Oil (BRENT): $66.97 (WTI) $63.22
• United States 10 years: 4.061%
• BITCOIN: $112,600

In corporate news:

• Apple – The tech giant is set to launch its new iPhones on Tuesday, facing the tough challenge of surprising consumers as rivals have already integrated artificial intelligence (AI) technologies into their products and services.
  
• Conocophillips, Nextdecade – The U.S. oil and gas producer will purchase one million tons per year of liquefied natural gas from NextDecade’s Texas export facility for 20 years, the companies announced Monday. NextDecade shares are up 2.3% in premarket trading.
  
• Dell Technologies – The company announced Monday that its chief financial officer, Yvonne McGill, will step down on Tuesday after nearly 30 years at the firm. David Kennedy, a 27-year veteran of the company, will serve as interim CFO.
  
• Ford – The automaker has recalled about 1.5 million vehicles in the U.S. due to a rearview camera issue causing inverted, distorted, or blank images, the National Highway Traffic Safety Administration said Tuesday.
  
• Fox Corp, News Corp – Fox shares fell 4.4% to $54.25 and News Corp shares dropped 4.5% to $32.44 in premarket trading after Rupert Murdoch and his children reached a deal giving his eldest son, Lachlan Murdoch, control of the media empire.
  
• Hyatt Hotels – Citigroup upgraded its rating from “neutral” to “buy.”
  
• Intel – The chipmaker announced Monday a series of leadership changes, including the departure of product chief Michelle Johnston Holthaus, as CEO Lip-Bu Tan steps up efforts to turn around the U.S. semiconductor maker.
  
• Nebius, Microsoft, Coreweave – Nebius said Monday it will provide Microsoft with GPU infrastructure under a $17.4 billion, five-year contract amid rising demand for high-performance AI. Nebius shares surged more than 50% in premarket trading, while rival CoreWeave gained 5.4%.
  
• Phillips 66, Cenovus Energy – The U.S. refiner announced Tuesday it will acquire the remaining 50% stake in WRB Refining from Cenovus Energy for $1.4 billion, giving it full ownership of two major U.S. refineries.
  
• Reliance Inc – JP Morgan initiated coverage with an “overweight” rating.
  
• Teck Resources, Anglo American – Teck Resources jumped 15.9% in premarket trading after agreeing to merge with Anglo American, marking the largest deal in the mining sector in more than a decade.
  
• Tourmaline Bio, Novartis – Tourmaline Bio surged more than 57% in premarket trading after Swiss group Novartis announced it would acquire the U.S. biotechnology firm for $1.4 billion.
  
• Unitedhealth – Shares rose 4.4% in premarket trading after the health insurer said it expects enrollment in its top-rated Medicare Advantage plans to align with forecasts.
  
• Wolfspeed – Shares soared 65.9% in premarket trading after a court approved the company’s restructuring plan, clearing the way for it to exit bankruptcy protection in the coming weeks and cut debt by about 70%.

Analyst Recommendations:

• Alcoa: B. Riley Securities reiterates its Buy rating and raises the price target from $37 to $38.
  
• Alliant Energy: Ladenburg Thalmann reiterates its Buy rating but lowers the price target fro $74.50 to $70.
  
• Bill Holdings: BNP Paribas Exane reiterates its Outperform rating and raises the price target from $60 to $70.
  
• Boston Scientific: Leerink Partners reiterates its Outperform rating and raises the price target from $126 to $127.
  
• Brixmor Property Group: Ladenburg Thalmann initiates coverage with a Buy rating and a $32 price target.
  
• Comerica: Piper Sandler reiterates its Neutral rating and raises the price target from $65 to $70.
  
• Constellation Brands: HSBC reiterates its Buy rating but lowers the price target from $230 to $200.
  
• Corebridge Financial: Autonomous Research reiterates its Outperform rating and raises the price target from $42 to $43.
  
• Federal Realty Investment Trust: Ladenburg Thalmann initiates coverage with a Buy rating and a $115 price target.
  
• HF Sinclair: TPH&Co. reiterates its Buy rating and raises the price target from $51 to $57.
  
• Kimco Realty: Ladenburg Thalmann initiates coverage with a Buy rating and a $27 price target.
  
• Lucid Group: Evercore ISI reiterates its In Line rating and raises the price target from $2 to $16.
  
• Marathon Petroleum: TPH&Co. reiterates its Hold rating and raises the price target from $162 to $175.
  
• Micron Technology: GF Securities reiterates its Hold rating and raises the price target from $116 to $138.
  
• Phillips 66: TPH&Co. reiterates its Hold rating and raises the price target from $121 to $133.
  
• Regency Centers: Ladenburg Thalmann initiates coverage with a Neutral rating and a $76 price target.
  
• RTX: Bernstein reiterates its Market Perform rating and raises the price target from $154 to $157.
  
• SanDisk: GF Securities upgrades the stock to Buy from Underperform and raises the price target from $35 to $85.
  
• Valero Energy: TPH&Co. reiterates its Buy rating and raises the price target from $158 to $167.
  
• Voya Financial: Autonomous Research reiterates its Outperform rating and raises the price target from $82 to $84.