news/AAPL/2023.01.11/The bulls are back in town .txt

The beginning of 2023 saw globally positive regional dynamics. Investors are testing new formulas, without really strong convictions, for lack of sufficient visibility. Nevertheless, there is a renewed appetite for risk, which can be seen in the sectoral developments since January 1. If I take the heat map proposed by MarketScreener on the US market, for example, I can see that the sectors that have fallen, and which have been abandoned by buyers, are all defensive sectors: Health Care, Beverages and Military Equipment. To this we must add the Oil & Gas industry, the star of the last two vintages, which needs to consolidate. At the other end of the spectrum, in clearly positive territory after a few 2023 sessions, we find basic materials and cyclical consumption. Technology is not doing too bad, but it is its most cyclical pocket – semiconductors - that is the most popular. Large caps in innovation or software, such as Apple or Microsoft, did not do very well.

Fewer defensives and more cyclicals to start the year, because the market is betting on a somewhat controlled economic landing in the United States and is preparing for the Chinese recovery, which should take place after the pandemic calms down. Tuesday's stock market session on Wall Street illustrates this, with volatility and then a closing with moderate gains: 0.56% for the Dow Jones, 0.70% for the S&P500 and 0.88% for the Nasdaq. Year in, year out, the 2023 balance sheet has turned positive in the US after a few misfires at the start. Jerome Powell's statements on monetary policy yesterday did not have much impact on stocks. The bond market got a little tense because the Fed boss reminded us that the return to price stability may require measures that are not popular in the short term, but that was the end of it: Powell obviously did not intend to expand on the subject or to send any particular message.
The market as a whole remains focused on two elements, the Chinese reopening and the indicators that point to an imminent end to the Fed's monetary tightening cycle. In this respect, the focus will be on Thursday's US inflation figures for December. If it cools down as planned - annual progression should decelerate from 7.1% in November to 6.5% in December) - there is no reason for the renewed optimism of the beginning of the year to fade.
Those who are bored by the omnipresence of macroeconomic news may find some comfort in the return of corporate earnings releases. The serious stuff will start on Friday with a flurry of U.S. financial institutions before the opening of Wall Street.
 
Today's economic highlights:
The dollar is holding up at EUR 0.9303 and GBP 0.8260. The ounce of gold is firm at 1877 dollars. So is oil, with North Sea Brent at USD 81.72 a barrel and US WTI light crude at USD 76.87. The yield on 10-year US debt is up to 3.59%. Bitcoin is losing some ground after its rally to around USD 17,300.
 
In corporate news:
* Merck announced Wednesday it plans to sue some pharmaceutical companies after finding they were distributing its COVID-19 treatment in China without its approval.
* Tesla wants to invest $775.7 million to expand its Texas plant, regulatory documents released by the automaker show.
* Apple - A U.S. International Trade Commission judge found that Apple infringed on one of Masimo's patents on measuring blood oxygen on some Apple Watches, medical technology group Masimo announced in a statement.
* Bed Bath & Beyond jumped 22.3% in pre-market trading despite announcing a much larger-than-expected quarterly net loss and a one-third drop in sales. The home goods chain announced last week that it was considering its options, including a bankruptcy filing.
 
Analyst recommendations:

BlackRock: CICC initiated coverage with a recommendation of outperform. PT set to $885.
Blackstone: Wells Fargo Securities upgrades to overweight from equal-weight. PT up 18% to $95.
Boeing: JP Morgan maintained his recommendation on the stock with a Buy rating. The target price is increased from USD 200 to USD 207.
Bunzl: Deutsche Bank downgraded Bunzl to hold from buy and lowered its price target to 30.60 pounds sterling from 33.00 pounds.
ConvaTec: HSBC resumes tracking to low, targeting GBp 200.
Estee Lauder: Daiwa Securities reinstated coverage with a recommendation of neutral. PT set to $263, a 0.2% increase from last price.
Illumina: HSBC initiated coverage with a recommendation of buy. PT set to $300.
Jefferies: Goldman Sachs downgrades to neutral from buy. PT up 2.1% to $40.
Keysight: Goldman Sachs downgrades to neutral from buy. PT up 6.2% to $189.
Masco: Deutsche Bank downgrades to sell from hold. PT down 15% to $43.
Motorola Solutions: Credit Suisse downgrades to neutral from outperform. PT up 2.9% to $270.
Oracle: Mizuho Securities initiated coverage with a recommendation of buy. PT up 34% to $116.
Pool Corp: Deutsche Bank upgrades to buy from hold. PT up 28% to $417.
Smith & Nephew: HSBC resumes coverage at buy targeting GBp 1300.
Watts Water: Deutsche Bank downgrades to hold from buy. PT down 1.9% to $150.