Today's pre-market scene is a mixed bag. The S&P 500 Index futures nudged up by 0.1%, while the tech-heavy Nasdaq futures climbed a more respectable 0.5%. Meanwhile, the Dow Jones Industrial Average futures took a 0.6% dip. This mixed performance is set against a backdrop of tariff uncertainties and a retail sector that's feeling a bit under the weather.

Investors are on high alert for a slew of economic data releases today. The flash Composite Purchasing Managers' Index (PMI) from S&P Global is due at 9:45 am ET. At 10 am ET, the existing home sales report for January is expected to show a decline to a 4.13 million annual rate, down from December's 4.24 million. Also on the docket are the final University of Michigan consumer sentiment report for February and the Q4 services survey. Adding to the day's excitement, Federal Reserve Vice Chair Philip Jefferson and San Francisco Fed President Mary Daly are scheduled to speak at 11:30 am ET. 

Yesterday's atmosphere was less than cheerful, thanks to Donald Trump's declarations on Ukraine. The White House is eager to wrap up the conflict with Russia swiftly, even if it means making concessions to the Kremlin and sidelining its European allies. Negotiations are buzzing in every corner. French president Emmanuel Macron and British Prime Minister Keir Starmer are expected in Washington early next week, likely without German representatives, who are preoccupied with the German parliamentary elections this Sunday. Friedrich Merz's conservatives are predicted to win, but they won't have the numbers to govern solo.

US stocks took a hit, with the Dow Jones feeling the brunt, courtesy of Walmart. The retail giant, usually a stalwart in the American distribution sector, found itself in the crosshairs of consumer skepticism about the economic and geopolitical horizon. Walmart's shares tumbled 6.5% during the session, as cautious forecasts and rhetoric spooked investors. Meanwhile, the tech sector played the role of a modest cushion, with Apple, Nvidia, and Microsoft posting slight gains. However, it was the oil and healthcare sectors that truly stood out, indicating that investors are opting for a defensive, or at least cautious, strategy. 

European equities are on the cusp of a significant milestone today: a potential ninth consecutive week of gains. For this to happen, the Stoxx Europe 600 index needs to overcome a modest 0.25% dip in today's trading session. Europe has emerged as a prime destination for investors this year, sharing the spotlight with China. The Stoxx Europe 600 hasn't seen a weekly decline since just before Christmas 2024.

Meanwhile, Asian markets have been buzzing with activity, driven by developments in Japan and China. The Japanese yen has been on the rise, fueled by speculation of a monetary policy tightening in the country. Traders are anticipating another rate hike in July. Adding to the intrigue, Bank of Japan Governor Kazuo Ueda announced the central bank's readiness to intervene in the bond market to control rising yields, giving the yen a bit of a jolt. The fascination with the yen's movements might seem puzzling, but it all boils down to the butterfly effect of carry trade. This lucrative strategy exploits favorable rate and currency combinations, with substantial sums at play from international investors. Hence, the keen focus on the JPY/USD pair and Japanese interest rates.

In China, artificial intelligence is doing what the Communist Party has struggled to achieve for several quarters: invigorating the market. The unveiling of the Made in China DeepSeek AI has jolted Chinese tech stocks from their slumber. Even local politicians are singing praises of this technological renaissance. The latest star of this show is Alibaba, which has seen its stock soar by 60% in just a month. The company seems to have hit the jackpot with a trifecta: a strong AI focus, the reappearance of Jack Ma with Xi Jinping's approval, and a clear improvement in quarterly figures. As I write, Alibaba's share price is up 13% in Hong Kong. Eddie Wu, Alibaba's CEO, emphasized that general AI research and development is now the company's primary goal. This is certainly more glamorous than discount online shopping. Wu even boasted that Alibaba is developing models that "push the limits of intelligence." Such grandiose claims always make me a bit skeptical. Nonetheless, this strategy is clearly winning over investors.

There are a few events not to be missed to round off the week. For example, a flurry of PMI activity indicators for the major economies. The market is wondering how companies have reacted to the latest Trump-upheavals, including in the United States. In this respect, the University of Michigan's consumer confidence survey is likely to provide important insights.

In Asia Pacific, the Hang Seng is completely mesmerized by Alibaba, with a 3% rise to end the last session of the week. This indirectly benefits mainland China (+1.1% for the CSI300) and Taiwan (+1% for the TAIEX), but it is struggling to pull the rest of the region along. The Japanese Nikkei 225 nevertheless gained 0.25%, but South Korea was sluggish, while Australia and India lost 0.3 to 0.5%. Western indices were close to equilibrium at the dawn of the 3rd Friday of the month, synonymous with a compensation session.

Today's economic highlights:

--- See the full calendar here.

  • Dollar Index: $106,5
  • Gold: US$2,929.47
  • Crude Oil (BRENT): US$76.23
  • Rate United States 10 years: 4.49%
  • BITCOIN: US$98,493.6

In corporate news:

  • Rivian anticipates a decrease in EV deliveries by 2025 with modest profits, facing broader automotive industry challenges including regulatory scrutiny and strategic investments.
  • Tesla deals with multiple recalls and explores potential partnerships with Nissan amidst the industry's challenges.
  • Alibaba shares surged following strong Q3 earnings, attributed to e-commerce and cloud growth, aggressive AI investment plans, and increased stakes by investors like Ryan Cohen.
  • Walmart's Q4 earnings surpassed expectations, but a disappointing full-year earnings forecast due to uncertain consumer behavior and geopolitical issues led to a decline in its shares.
  • UnitedHealth is under investigation by the U.S. Department of Justice for allegedly manipulating diagnoses to secure higher Medicare Advantage payments.
  • Newmont reported a significant increase in Q4 2024 earnings, with higher gold production and bullion prices, and provided its full-year 2025 guidance.
  • Citigroup was fined by the UK's Competition and Markets Authority for sharing sensitive information about UK government bonds and ended its diversity hiring goals under the current business climate.
  • Celsius agreed to acquire Alani Nutrition in a deal valued between $1.65 billion and $1.8 billion, despite mixed Q4 financial results.
  • Block's shares dropped due to a spending slowdown and concerns over its focus on BNPL expansion, despite higher Q4 adjusted earnings and revenue.
  • CoStar proposed a $1.69 billion acquisition of Domain Holdings Australia, as part of its market activities.
  • Meta cut stock options for employees, increased executive bonuses, and navigates internal disagreements over content moderation and regulatory scrutiny.

Analyst Recommendations:

  • Akamai Technologies, Inc.: Piper Sandler & Co downgrades to neutral from overweight with a target price reduced from USD 112 to USD 100.
  • Albemarle Corporation: Zacks upgrades to neutral from underperform with a price target raised from USD 68 to USD 88.
  • Alnylam Pharmaceuticals, Inc.: Zacks downgrades to neutral from outperform with a price target reduced from USD 322 to USD 270.
  • Alphabet Inc.: Punto Research upgrades to buy from hold with a target price of USD 203.84.
  • First Industrial Realty Trust, Inc.: Goldman Sachs upgrades to neutral from sell with a target price raised from USD 52 to USD 59.
  • Floor & Decor Holdings, Inc.: Gordon Haskett upgrades to buy from hold with a target price raised from USD 100 to USD 120.
  • Grab Holdings Limited: JP Morgan upgrades to overweight from neutral with a target price of USD 5.60.
  • Lear Corporation: Zacks downgrades to underperform from neutral with a price target reduced from USD 102 to USD 83.
  • Molson Coors Beverage Company: Zacks upgrades to outperform from neutral with a target price raised from USD 58 to USD 69.
  • Unity Software Inc.: Benchmark Co., LLC upgrades to hold from sell.
  • Celanese Corporation: Morgan Stanley maintains its market weight recommendation and reduces the target price from 80 to USD 55.
  • Charles River Laboratories International, Inc.: Stephens maintains its overweight recommendation and reduces the target price from USD 240 to USD 190.
  • Clarivate Plc: Citigroup remains neutral recommendation with a price target reduced from USD 7 to USD 5.50.
  • Crowdstrike Holdings, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 372 to USD 506.
  • Five9, Inc.: Cantor Fitzgerald maintains its overweight recommendation and raises the target price from 46 to USD 57.
  • Hasbro, Inc.: Roth Capital Partners maintains its buy recommendation and raises the target price from USD 68 to USD 82.
  • Rivian Automotive, Inc.: Wells Fargo maintains its equalweight recommendation with a price target raised from 11 to USD 14.
  • Sprouts Farmers Market, Inc.: BMO Capital Markets maintains its market perform recommendation and raises the target price from 140 to USD 180.
  • Visa, Inc.: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 308 to USD 400.
  • Walmart Inc.: Bernstein maintains its outperform recommendation and reduces the target price from USD 117 to USD 37.67.
  • Cenovus Energy Inc.: National Bank Financial downgrades to sector perform from outperform with a target price reduced from CAD 28 to CAD 25.
  • Telus Corporation: ARC Independent Research downgrades to hold from buy with a target price reduced from CAD 25 to CAD 22.50.