Dow +1,56%, S&P 500 +1,81%, Nasdaq +2,06%, Russell +1,57%, SOX +2,51%, Eurostoxx -0,66%, SMI -0,04%.
After the now famous “Liberation day” of the past week, Donald Trump establishes the “retropedage but not too much day” this weekend. Realizing that the price of an iPhone could increase to 3500 dollars (all this is planned and thoughtful, let us remember), the President of the United States announces exempt smartphones and customs duties of 145% now applied to China. We are therefore delighted to look at the opening of the Apple action this afternoon. Note in passing that this segment alone corresponds to 20% of Chinese exports to the United States, it is therefore anything but anecdotal. Who you know hastens to specify that it is not a total exemption but that a surcharge of 20% will concern these products. He adds that no country is drawn from the case, especially not China, from which President Xi Jinping believes that “protectionism leads anywhere” and that a trade war will make no winner. We are starting to better understand the strategy of the respective blocks. The United States threatens everything to negotiate, China is starting to get upset and retaliated while the European Union seems to adopt a more wait-and-see posture and want to put these 90 days of a contribution break. For its part, Switzerland was working on a massive investment plan of 100 to 150 billion francs in the United States.
For the past ten days, Wall Street has gone through one of the important lowering phases of its history, then one of the most beautiful increases never seen. Over the past week, the main American indices recovered 5.7% for the S & P500 (SPX) and 7.4% for the NASDAQ100 (NDX). The Friday session is marked by a general rebound, the 7 magnificent are sought after again, the podium of the day of the SPX consists of materials, tech and energy. The exchange volumes are again weak while volatility, even if it fell 8% (the VIX at 37.56), remains high. The actions will probably continue to be stranded according to the planned and thoughtful impulses of DJT. It is probably on the side of the bond market and foreign exchange that you now have to focus your attention. The persistent weakness observed on US treasury bills on Friday is not necessarily auspicious, the yield of 10 years deals this morning at 4.46%this morning, we understood that it was this segment of the market which whistled the end of the recess of Donald last week, its evolution is to be followed closely.
We will also carefully look at what the dollar does, whose upward trend facing the euro started in 2008 seems to be in the process of reverse. The EURT/USD pair is evolving this morning at 1.1388. The greenback was also considerably weakened against the Swiss franc, breaking the significant level of 0.84 at the end of the week to currently evolve at 0.8186, a level which brings us back to January 15, 2015, which we remember very well in the Cambist community.
Apart from the American bond market, we will also follow the Fed, which seems to have started a communication operation. Jerome Powell sends his employees to get messages across. The president of the Boston Federal Reserve, Susan Collins, declares that the Fed is ready to ensure the operation of the financial markets if necessary. His colleague from the New York FED, John Williams, indicates that the central bank will act to avoid the risk of stagflation. Although this seems obvious, the public announcement marks a step in the more active commitment of the Fed.
Nothing special to get into the tooth on the macro-economic menu of the day.
Holcim shareholders will rule on May 14 on the split of Amrize. Sandoz launches a legal action against Amgen in the United States. KKR is about to buy OSTTRA for about $ 3 billion, according to Bloomberg.
This morning and this morning in Asia this morning, the indices treat up, reassured by the announcements of the weekend. Tokyo gained 1.18%in the bell, Hong Kong advances by 2.12%, Shanghai increased by 0.76%, Seoul rises by 0.95%and the NIFTY50 wins 1.92%. The future SPX recovers 1.3% while Europe opens up 2%.
Despite the rebound in actions this morning, the feeling on the markets remains fragile. The dollar, a key barometer of last week’s turbulence, is down against all its G10 counterparts, the Bloomberg index displaying a fifth decline. Meanwhile, treasury bills know, at best, a timid recovery. American yields at 10 years have dropped from a base point and those at 30 are slightly higher. Last week, they each increased by almost 50 base points. Let’s not lower custody.
