In the financial world, the small stories often matter as much as the grand narratives of economic cycles and capital flows. Investors thrive on drama and extremes. Tuesday was a day of despair, with fears of the semiconductor industry's demise, or as it's known, the "golden chip." Dutch firm ASML's unexpected warning cast a shadow over the bullish AI frenzy. But the gloom was short-lived. By Thursday morning, the mood had shifted, thanks to TSMC's "insane" financial performance, as one analyst put it. This is crucial, as ASML is TSMC's top supplier, which in turn supplies Nvidia, which supplies OpenAI. It's a supply chain with high expectations. TSMC's stellar results helped erase ASML's misstep, allowing stock indices to resume their upward march, with some reaching new peaks. Tech did its part to lift the indices, but it wasn't enough for the S&P 500, which dipped slightly (-0.02%) due to plunges in health insurers Molina, Centene, and Elevance Health, following concerning earnings guidance from the latter.

This morning, Futures for the S&P 500 and Nasdaq are up 0.3% and 0.5%, while the Dow Jones looks to hold steady. The tech sector is shining globally. In the U.S., Netflix shares jumped 5.8% in pre-market trading after adding 5.1 million new subscribers in the third quarter, beating Wall Street's forecasts. The company expects more subscriber growth during the holiday season. Apple shares climbed 2% on news that the iPhone 16 is outselling its predecessor in China. FactSet reports that about 80% of the 67 S&P 500 companies that have reported so far have outperformed analysts' expectations.

Across the pond, European markets are also on the rise, buoyed by a surge in Chinese stocks following Beijing's latest economic stimulus measures.

Today's session is indeed dominated by China's third-quarter growth figures. They met expectations and even slightly exceeded forecasts, according to some economists. However, growth was the weakest since early 2023, keeping the need for further support measures in focus. Nine-month growth came in at 4.8%, keeping Beijing's annual target of "around 5%" within reach.

In other news, Israel announced the death of Yahya Sinouar, the Hamas leader described as the "architect of the October 7, 2023 attack." Israel stated that the conflict could end if Hamas surrenders its weapons and releases the remaining hostages. Gold surpassed the $2,700/oz mark for the first time.

On the corporate front, Procter & Gamble and American Express are due to release their results today.

In the Asia-Pacific region, China ended the week on a high note following the latest statistics and announcements from the PBOC. The Hang Seng gained 3.6%. This enthusiasm wasn't shared by South Korea (-0.6%) or Australia (-0.9%). Japan ended the week up 0.1%. European markets are bullish.

Today's economic highlights:

US building permits and housing starts are on the calendar today. 

The dollar is down to EUR 0.9211 and GBP 0.7665. The ounce of gold rose to USD 2,710. Oil fell, with North Sea Brent at USD 74.12 a barrel and US light crude WTI at USD 69.88. The yield on 10-year US debt stands at 4.08%. Bitcoin is hovering around USD 67,800.

In corporate news:

  • Netflix gained 5% after quarterly results.
  • Apple shares increased by 2% following a report that the iPhone 16 is selling faster in China than its predecessor.
  • Procter & Gamble reported sales for the first quarter below Wall Street expectations.
  • Amex reported third-quarter earnings ahead of Wall Street estimates, due to higher card spending.
  • Intuitive Surgical gained 6% after the announcement of its quarterly results.
  • Alimentation Couche-Tard is still considering the acquisition of Seven & i despite competition and communication obstacles.
  • Berkshire Hathaway continues to reduce its stake in Bank of America.
  • Deere is investigated by the FTC for unfair repair policies.
  • Flagstar, a subsidiary of New York Community Bancorp, is to lay off around 1,900 employees.
  • Schlumberger sells stake in Palliser block.
  • Autonomous driving specialist Pony.ai files for IPO on Nasdaq.

Today's main publications: Procter & Gamble, American Express, Schlumberger, Fifth Third Bancorp...

Analyst recommendations:

  • Bank Of America: Phillip Securities downgrades to accumulate from neutral with a price target reduced from USD 45 to USD 44.
  • Coherent Corp.: B Riley Securities Inc. downgrades to neutral from buy with a target price of USD 86.
  • Ecolab Inc.: Jefferies upgrades to buy from hold with a price target raised from USD 235 to USD 310.
  • Micron Technology, Inc.: Baptista Research downgrades to buy from outperform with a price target reduced from USD 158.40 to USD 143.60.
  • Netflix, Inc.: Phillip Securities downgrades to neutral from accumulate with a target price raised from USD 675 to USD 695.
  • Old Dominion Freight Line, Inc.: BMO Capital Markets downgrades to market perform from outperform with a price target reduced from USD 214 to USD 210.
  • Sealed Air Corporation: Baptista Research downgrades to outperform from buy with a price target reduced from USD 43.60 to USD 40.60.
  • Allison Transmission Holdings, Inc.: Raymond James maintains its outperform rating and raises the target price from USD 95 to USD 115.
  • Applovin Corporation: Jefferies maintains its buy recommendation and raises the target price from USD 108 to USD 175.
  • Bwx Technologies, Inc.: Baird maintains its outperform rating and raises the target price from USD 123 to USD 166.
  • Curtiss-Wright Corporation: Baird maintains its outperform rating and raises the target price from USD 312 to USD 432.
  • Enphase Energy, Inc.: Daiwa Securities maintains a neutral recommendation with a price target reduced from USD 135 to USD 101.
  • First Solar, Inc.: Daiwa Securities maintains its outperform recommendation and reduces the target price from USD 300 to USD 230.
  • Five9, Inc.: Baptista Research maintains its buy recommendation and reduces the target price from 79.20 to USD 52.
  • Klaviyo, Inc.: Piper Sandler & Co maintains its overweight recommendation and raises the target price from USD 34 to USD 45.
  • Lockheed Martin: Baird maintains a neutral recommendation with a price target raised from 519 to USD 626.
  • M&T Bank: Barclays maintains its equalweight recommendation and raises the target price from 170 to USD 228.
  • Nextracker Inc.: Daiwa Securities maintains its outperform recommendation and reduces the target price from USD 53 to USD 39.
  • Stellantis N.v.: Goldman Sachs maintains its buy recommendation and reduces the target price from 23 to EUR 16.
  • Bellway P.l.c.: Peel Hunt downgrades to hold from add with a price target raised from GBX 3020 to GBX 3160.
  • Compass Group Plc: Deutsche Bank downgrades to hold from buy with a target price of GBX 2500.
  • Greencore Group Plc: Deutsche Bank upgrades to hold from sell with a price target raised from GBX 130 to GBX 195.