"The more Powell talks, the more stocks and bonds go up". This comment, which graces the front page of Bloomberg's website this morning, is apt and sums up the mood of the moment. Yesterday, the U.S. central bank raised its key rate by 25 basis points, as expected. This comes after four hikes of 75 basis points and one of 50 basis points. The Fed Funds rate is now in the range of 4.50 to 4.75%. A year ago, it was close to zero (0.08% precisely in February). This is a measure of how far we have come in making money more expensive and, as was the plan, cooling inflation.

That's for the mathematical part. As for the narrative, investors expected to get a bit of a slap on the wrist from Fed boss Jerome Powell. After all, they had given in to their penchant for optimism by moving back into risky assets, despite calls for caution from economists and central bankers. Instead, they got a soft Powell - a nicer version than they had imagined. And by soft, I mean a central banker who didn't use the usual codes of caution and seemed to give in. There were still some warnings, but investors focused on two things. First, the Fed acknowledged that inflation was falling. Second, it didn't seem particularly concerned about the risk taking seen since January 1. And when Powell got a little tougher, the market didn't believe him. It doesn't think that there will be two more rate hikes in the current cycle. Nor does it believe that a rate cut is unthinkable by the end of the year.
As a result, Wall Street up sharply after the press conference. The Nasdaq recovered 2.16% at the end of the day. This is the fourth time in ten sessions that the U.S. technology index gains more than 2%. The S&P500 was up 1.05% at the close. Penalized by its oil and health stocks, the Dow Jones limited its gains to 0.02%. If we had to summarize the session, tech blinked in fluorescent green and energy in red.
Today, the focus turned to the Bank of England and the ECB. The former is facing an inflation of 9.2% with key rates at 3.5%. The latter is facing an inflation of 8.5% with rates at 2.50%. Experts expected a 50 basis point tightening for both institutions, and that's what happened.
The Bank of England raised interest rates for the 10th consecutive time but dropped its pledge to continue to increase them "forcefully" if needed and said inflation had probably peaked. It voted to increase the Bank Rate to 4.0%. The European Central Bank raise rates to 2.5%.
At the same time, corporate earnings releases continue. After several disappointments, Meta Platforms delivered figures that reassured investors last night. The former Facebook was up 20% in after-hours trading, which helped fuel the rebound in technology stocks. Several dozen large companies are scheduled to report today, up to the trio of Apple, Amazon, Alphabet tonight after the close of Wall Street. In premarket trading, futures were up 1.7% on the Nasdaq 100 and 0.7% on the S&P 500, while the Dow was flat.
 
Economic highlights of the day:
We have the Challenger survey on layoffs (8:15 am), weekly jobless claims (10:30 am) and durable goods orders (10:00 am). All the agenda here. This morning, the Caixin Manufacturing PMI for China came in below expectations at 49.2 points, while the "official" PMI was in expansion territory. 
The dollar is up 0.2% against the euro to EUR 0.9105 and up 0.5% against the pound to GBP 8118. The ounce of gold is back up to 1953 dollars. Oil suffered yesterday, with North Sea Brent crude at USD 82.43 a barrel and U.S. light crude WTI at USD 76.08. The yield on 10-year US debt is down to 3.42%. Bitcoin remains near USD 23,000.
 
In corporate news:
* Meta Platforms jumped 19 percent in pre-market trading after announcing Wednesday night a $40 billion share buyback program, tighter cost controls this year and an upbeat forecast for its first-quarter revenue. Apple, Alphabet and Amazon, which will report results after the U.S. markets close, were up 1.1% to 4.3% in pre-market trading.
* Eli Lilly on Thursday raised its full-year profit target, expecting higher demand for its new diabetes drug Mounjaro.
* Estee Lauder raised its full-year sales forecast Thursday on solid demand for its products and an expected recovery in China, its largest market.
* Honeywell reported a 28.6% drop in fourth-quarter profit, hurt by supply problems and labor shortages.
* Merck reported a better-than-expected quarterly profit on strong Asian sales of its Covid-19 antiviral. The company's profit forecast for this year, however, came in below analysts' consensus, sending the stock down 1% in premarket trading.
* KKR has made a non-binding offer to acquire a majority stake in Telecom Italia's fixed-line telecommunications network, the Italian group said Thursday, adding that its board of directors would meet later today to discuss the deal.
* Boeing won a $1.62 billion contract from the U.S. Air Force to supply guidance systems for the Minuteman III intercontinental ballistic missile.
* Pinterest decided to lay off about 150 employees, less than 5 percent of its workforce, Bloomberg reported Wednesday. The stock was up 5.4 percent in premarket trading.
* Metlife reported a 33% drop in adjusted fourth-quarter profit on Wednesday.
 
Analyst recommendations:

EasyJet: JP Morgan reiterates its Sell rating on the stock. The target price has been raised to GBp 370 from GBp 310.
Fedex: Citi upgrades to buy from neutral. PT up 19% to $240.
Goldman Sachs: Oppenheimer lifts price target to $463 From $441, Maintains Outperform rating
McDonald's: BofA Securities lowers PT to $297 from $303, Maintains Neutral rating
Meta Platforms: Piper Sandler upgrades to overweight from neutral. PT up 40% to $215.
Pets at Home: Liberum downgrades from buy to hold targeting GBp 390.
Standard Chartered: Goldman Sachs downgrades to neutral from buy. PT up 29% to 885 pence.
Stryker: DA Davidson raises price target to $290 From $250, Maintains Buy rating.