Dow +0,13%, S&P 500 +0,27%, Nasdaq +0,83%, Russell -0,86%, SOX +0,09%, Eurostoxx +0,74%, SMI +0,47%.
While the political world on both sides of the Atlantic is tearing itself apart and barking at the top of its voice, the stock market caravan passes by, imperturbable.
21st all-time high at the bell for the Nasdaq Composite Index (CCMP), driven in particular by Tesla, Apple and Amazon. The former is benefiting from a note from Wells Fargo, which is adding it to its list of tactical ideas. 5th consecutive session of increase for the stock, which is back above its 200-day moving average and clears the technical path that had been blocking it until then. Note that the Nasdaq100 (NDX) is not ending its session on a record. The SPX podium of the day is made up of tech, consumer discretionary and financials. The oil majors are doing well, with a barrel of WTI Light Crude rising to $83.58. Semiconductors are still lagging behind. The market is therefore starting the second half of 2024 as it started the year, with a bang (except for small caps). Trading volumes are certainly limited, but movements are happening and those who are absent are wrong. Optimism prevails in the trading rooms, enthusiasm around intelligence seems still relevant, the prospects of rate cuts by the Fed also, especially since recent macroeconomic statistics have shown a slightly less vigorous job market and a decline in consumer demand. The second quarter corporate earnings season begins in a few weeks, it will be necessary to ensure on this part, in the meantime the players seem incorrigibly optimistic, stocks tend to perform well in a presidential election year, with both candidates promising the moon and more.
So, all is well in the best of all possible worlds, on the surface. Volatility remains low with a VIX at 12.22, the put call ratio is once again on the mat, at 0.56. The players have clearly let their guard down once again. The S&P500 Equal Weighted Index (SPW) lost 0.79% yesterday while the SPX rose 0.27%, the few bold ones who joined the generals on the hill on Friday are already back on the plain. At the same time, the increasing probability of a Donald Trump victory on November 5 after Joe Biden’s disastrous performance in last week’s debate seems to please stock holders, but the bond market is also becoming aware of this new situation and has pushed bond yields up by 20 basis points in a few days, the US 10-year is trading this morning at 4.44%, it is testing its 50-day moving average, if it breaks it it will then look at 4.53%.
The Dollar Index (DXY) is holding at 105.93, its next resistance is at 106.10, its support at 105.16. The EUR/USD pair is moving this morning at 1.0730. Gold is back at $2330 an ounce, its 50-day is moving at $2338, this is its next resistance.
Note that tomorrow, Wednesday, Wall Street will only trade for half a day, and then remain closed on Thursday, which will be the United States’ Independence Day (the teases whisper that it will also be Rishi Sunak’s). A shortened week, therefore, which hardly attracts trading volumes, plus on Friday the important monthly report on employment in the United States will be published.
On the macro front, U.S. manufacturing activity contracted in June for a third straight month, according to the Institute for Supply Management’s (ISM) monthly survey. New York Fed’s John Williams says he’s confident the Fed can bring inflation back to 2% (thanks for that epic speech). Today, CEO Jerome Powell speaks at the ECB’s Sintra conference.
A word on Europe where July begins with a 0.74% increase in the Eurostoxx and especially a 1.01% rebound in the Parisian CAC40, relieved at the prospect that the National Rally will not obtain an absolute majority in the National Assembly during the second round this Sunday, which remains to be confirmed, that said, nothing is decided. The bond market is also easing, the spread between the 10-year OAT and its alter ego the Bund is evolving this morning at 73 basis points. We will note in passing the German inflation figures, published yesterday, which are lower than expected, that can only do good, especially since Christine Lagarde is also at Cintra and will speak at the same time as her colleague Jerome.
At Hogwarts, little Donald Mallefoy receives an immunity cloak from Professor Snape and his colleagues on the school’s supreme council. The problem is, it’s really hard to imagine Joe Biden as Harry Potter to calm Donald’s ardor.
On the macroeconomic menu today, inflation and unemployment in the eurozone at 11:00 a.m., before the JOLTS survey on American employment at 3:30 p.m.
Blackstone to sell Japanese dietary supplement maker Alinamin to MBK for $2.2 billion, Nikkei reports. Tesla deliveries set to fall for second straight quarter, analysts estimate. BlackRock launches stock ETF with 100% downside coverage. French competition authority prepares lawsuit against Nvidia. Givaudan fully acquires Italian b.Kolormakeup & Skincare. Richemont appoints new CEO at Cartier. Eni expects to raise $4.3 billion from asset sale, Bloomberg reports. Moody’s affirms Volkswagen’s issuer rating due to robust portfolio. Fitch affirmed Novartis’ long-term ratings at AA- on Monday. Logitech founder offers to replace Chairman Wendy Becker. Prysmian completes acquisition of Encore Wire. Vontobel makes minority investment in British infrastructure manager Ancala Partners.
Tonight and this morning in Asia, the indices are trading in a scattered order. Tokyo gains 1.15% at the bell, Hong Kong gains 0.2%, Shanghai loses 0.03%, Seoul loses 0.84% and the Nifty50 gains 0.08%. The SPX future falls by 11 points and Europe opens slightly lower.
