US equities hit fresh high to start the week

On Monday, US equities closed higher with small-cap shares leading the gains, notably with the Russell 2000 index rising approximately 1.4%. The NASDAQ also performed well, increasing by over 1%. The day lacked significant corporate or economic news, but the week ahead promises key earnings reports, labor-market data, and central bank decisions. Treasury yields declined, while the S&P 500 and Dow Jones Industrial Average reached record highs, reflecting investor optimism amid an upcoming busy economic calendar. European markets also closed higher yesterday, with the Stoxx 50 Index up 0.1% as it rebounded from earlier losses. 

Summary for 30.01.2024 

• Asian shares declined on Tuesday due to the court-ordered liquidation of China Evergrande, impacting the region’s property market. Geopolitical tensions supported oil prices, restraining risk appetite ahead of the US Federal Reserve meeting. The MSCI Asia-Pacific index fell 0.32%, with Hong Kong’s Hang Seng dropping 1.4%, set for a 7% monthly decline. China stocks fell 0.69%, while Japan’s Nikkei gained 0.42%. 
• European shares are poised for further gains as US equity futures remain steady following strong performances in both markets, with notable earnings reports driving movements. 
• Oil prices rebounded in early trade on Tuesday, driven by escalating geopolitical tensions in the Middle East, following a more than 1% drop the previous session. Concerns over supply disruptions amid U.S.-Iran tensions and potential Fed rate adjustments also influenced market sentiment. 
• Hedge funds have recently shown a remarkable surge in interest in Chinese shares, marking their most significant buying spree in over five years. This shift underscores a reversal from previous bearish sentiment, as investors now exhibit renewed confidence in Beijing’s efforts to bolster the economy amid ongoing challenges. 
• Super Micro Computer’s shares surged nearly 10% in after-hours trading on Monday to a record high following a robust quarterly sales projection, fuelling a broader rally in AI-related equities. The company anticipates strong growth driven by increasing demand for AI servers, propelling its share surge.  
• Ryanair faced lower-than-expected profits in Q4 due to halted sales by online travel agents, impacting earnings. Despite this, analysts see it as a temporary setback, with potential long-term benefits. The company also announced that it is willing to purchase Boeing’s 737 MAX 10 aircraft if any US customers refuse delivery, foreseeing potential long-term benefits and minimal impact from Boeing’s 737 Max 9 grounding. 
• Neuralink, Elon Musk’s brain-chip startup, successfully implanted its first device into a human patient, with promising initial results. The FDA-approved trial aims to aid paralysis and neurological conditions. However, the company faces scrutiny over safety protocols following reports of issues with monkey implants. 
• Toyota Motor achieved a record-breaking 11.2 million vehicle sales in 2023, retaining its title as the world’s top-selling automaker for the fourth consecutive year. The Japanese company saw a 7.2% increase in global sales, with hybrids comprising about a third and electric vehicles less than 1%. Volkswagen Group secured the second position, reporting a 12% increase in deliveries to 9.2 million cars. 
• Renault cancelled Ampere’s IPO, a move praised by analysts for its alignment with the EV project and bolstering shareholder confidence. Leveraging robust finances, it maintains management focus amid industry shifts and potentially boosts shareholder value despite prevailing market sentiment, highlighting adaptability to evolving dynamics. 
• UBS analysts maintained a Neutral rating and $190 per share price target on Apple, citing risks in March quarterly results due to soft demand trends in the December quarter and a possible iPhone inventory build in China, though slight EPS upside is anticipated. Full-year unit forecast remains unchanged. 
• Morgan Stanley upgraded AMD’s price target to $193, maintaining an Overweight rating, but prefers Nvidia, citing AMD’s recent rally caution and favouring Nvidia’s developed AI ecosystem. Meanwhile, Bank of America raised AMD’s price target to $195 but warned of potential Q1 guidance miss due to PC/FPGA weakness. Analysts anticipate inline Q4 results, with focus on MI300 AI accelerator expectations. 
• Jefferies analysts anticipate a significant increase in digital advertiser spending for Meta Platforms in Q4 when it reports results after the bell on Thursday, attributing it to the company’s advancements in AI. They expect revenue to hit the higher end of guidance, projecting sustained double-digit growth. Jefferies raised the price target to $455. 
• Jefferies reiterated a Hold rating on Tesla and lowered their 12-month price target to $185 following 4Q earnings. Concerns arose over a lack of strategy addressing business model gaps, despite expected slower growth. Adjustments were made to volume forecasts and financial projections for 2024/25. 
• Bernstein analysts lowered Boeing’s price target to $245 from $272, maintaining an Outperform rating. They anticipate potential compensation of $1 billion or more due to MAX-9 grounding and certification delays, with a broader regulatory clampdown expected, potentially affecting deliveries and free cash flow. 
• William Blair upgraded AbbVie to ‘Outperform’ with a $190 price target. Analysts highlight strong performance of growth platforms like Skyrizi and Rinvoq, with Humira exceeding expectations in 2023. Despite risks, including biosimilar competition, AbbVie’s strong growth outlook and high dividend yield make it attractive to investors.