I think it's safe to say that the Fed's decision on Wednesday will be this week's focus. For the new readers or listeners among you, I will explain why. This is because investors generally try to anticipate what is going to happen in the foreseeable future to optimize their asset allocations. For example, investing in companies that have strong earnings or low debt when the economic outlook deteriorates. Or investing in cyclical companies whose earnings are soaring when the economy is about to rebound. There are many classic patterns of this type in finance.

Since the financial crisis of 2008, central banks have taken control of economic destinies by drowning fears of financial collapse in new money. They have accustomed investors to evolving in a world of abundant liquidity. As a result, these investors have taken increasingly risky bets. Yes, when money flows freely, it can irrigate areas where investors would not even dream of going under normal conditions. Speculative bubbles are formed. Some of them burst in 2022, notably because central banks were forced to reduce access to free money for fear of an inflationary spiral. To do so, they unraveled their asset purchase programs while raising their key rates. Investors then drastically reduced their riskiest bets: goodbye SPAC, meme-shares, companies without business models, crazy crypto-currencies, etc. Currently, the market is watching for the moment when central banks (and when I say central banks, it's mostly the Fed) will stop raising rates. Because that means two things: one, that the economic situation has stabilized. On the other hand, it means that the time when rates will come down again is approaching. In other words, a new growth cycle could appear and money will be cheaper. Hence the return of risk appetite.
This is more or less the situation now. And investors are looking to get two steps ahead. They know that the Fed is going to raise rates again, probably twice by the end of spring, but they are already gambling on the upturn that they hope will follow. To avoid missing the bandwagon, they're getting on the bandwagon early, if you will. On Wednesday, the Fed will likely announce another rate hike, but limited to the bare minimum, 25 basis points. Will it try to cool the market's ardor? This is the real unknown of the week.
Because January saw buyers return to the stock market in droves. In particular on cyclical or slightly daring bets. The taste for risk can be seen in the index charts: the MSCI China, the Hang Seng and the Argentine Merval rose by more than 14% in January. The Nasdaq, which was crushed in 2022, has recovered 11% in one month. Many markets have gained 9 to 10% since January 1, which is exceptional: Paris, Madrid and Seoul in particular. Last week, American indices were at their best, while Europe, which had made a better start in 2023, made only modest progress.
The week will be marked by the monetary policy decisions of three central banks. The Fed on Wednesday, then the European Central Bank and the Bank of England on Thursday. There will also be the earnings reports of some 40 companies worth more than $100 billion on the agenda this week. In the United States, Apple, Alphabet and Amazon on the evening of February 2. In Europe, Novo Nordisk, Novartis, Roche, Shell and Sanofi among others. But they are not the only ones and a few hundred smaller companies are also scheduled.
To end this column, I will mention a few important developments over the weekend: The United States, Japan and the Netherlands have reached an agreement to limit China's access to certain key semiconductor technologies. On a related topic, the Wall Street Journal revealed that China's main military nuclear lab continued to use advanced U.S. chips despite the 1997 embargo. Meanwhile, House Speaker Kevin McCarthy announced that he would meet with Speaker Joe Biden on Wednesday to discuss raising the federal debt ceiling.
Mainland Chinese equity markets reopened this morning after a week-long break for the Lunar New Year.
This morning, U.S. futures were all down, with the Nasdaq 100 losing 1.2% due to a fall in growth stocks ahead of central banks decisions.
 
Economic highlights of the day:
There aren't any important indicators today in the US.
The dollar is down 0.2% against the euro to EUR 0.9179 and is stable against the pound at GBP 0.8070. The ounce of gold is trading at USD 1925. Oil is losing ground, with North Sea Brent crude at USD 86.4 per barrel and US light crude WTI at USD 79.78. The yield on 10-year US debt is stagnant at 3.50%. Bitcoin is down to USD 23,000.
 
In corporate news:
* Apple, Amazon and Alphabet, which are due to report their fourth quarter results this week, are each down about 1.5% in premarket trading.
* Wall Street-listed Chinese companies Alibaba, Bilibili, Pinduoduo and JD.Com are down 4 percent to 7.5 percent in premarket trading after Mike McCaul, the new chairman of the U.S. House of Representatives' Foreign Affairs Committee, said Sunday that the risks of a conflict with China over Taiwan are "very high".
* Goldman Sachs Group has restructured its assets in Russia, which could pave the way for a full exit from the country, RBC reported Monday, citing two investment market sources.
* Biogen and Eisai announced in a joint statement that the Japanese Ministry of Health has granted priority review status to the two companies' Alzheimer's disease treatment lecanemab.
* Boeing - The U.S. aircraft manufacturer will deliver on Tuesday to Atlas Air the last Boeing 747, a twin-aisle aircraft designed in the late 1960s to meet the demand for mass travel and which will be discontinued.
 
Analyst recommendations:

Axalta: Citi raised the recommendation to buy from neutral. PT up 20% to $35.19.
Eastman Chemical: Vertical Research Partners downgrades to hold from buy. PT up 6% to $92.
Federal Realty: Compass Point Research & Trading raised its recommendation to buy from neutral. PT up 12% to $125.
HCA Healthcare: Truist Securities raises price target to $290 from $270. Maintains buy rating.
Kohl's: Goldman Sachs reinstated coverage with a recommendation of sell. PT down 14% to $27.
Lockheed Martin: DZ Bank AG upgrades to buy from hold. PT up 14% to $523.
Macy's: Goldman Sachs reinstated coverage with a recommendation of buy. PT up 21% from last price to $28.
Nordstrom: Goldman Sachs reinstated coverage with a recommendation of neutral. PT up 8.6%  from last price to $20.
Regeneron: Cowen upgrades to outperform from market perform. PT jumps 18% to $875.
Rentokil: Numis moves from accumulate to hold targeting GBp 470.
Tanger: Compass Point Research & Trading LLC downgrades to neutral from buy. PT up 9% to $21.
Tesla: Berenberg upgrades to buy from hold. PT up 12% to $200.
Uber: MoffettNathanson initiated coverage with a recommendation of outperform. PT set to $47.