Dow -0,28%, S&P 500 +0,25%, Nasdaq +0,81%, Russell +0,54%, SOX +0,69%, Eurostoxx +0,53%, SMI -0,09%.
Wall Street ends its week with new historic records (S&P500 – SPX and Nasdaq100 – NDX). Will the Christmas rally take place? That of Donald Trump is clearly on the rise, the SPX achieves its 18th session of increase on Friday in 24 since the American presidential election. Optimism prevails in the trading rooms after the publication of the monthly report on employment in the United States, which reassures the greatest number of people about the American economy but also about the monetary policy of the Fed, the market now forecasts an 83% chance of a 25 basis point cut on December 18. Today’s SPX podium is made up of discretionary consumption, communication services and to a lesser extent tech. We will note the stellar performances of Lululemon, DocuSign and Ulta Beauty, while the magnificent seven do not evolve in unison, Tesla and Amazon are responsible for maintaining the rating, the others remain on the sidelines, or even retreat a bit (Nvidia ). Despite their all-time highs, the SPX and NDX are not overbought, the equally weighted S&P500 index (SPW) fell 0.1% on the day, volatility fell sharply, the VIX lost 5.6% and returns to 12.77, its main support is at 10.62. Same phenomenon on the bond market, whose volatility has recently fallen, on Friday the MOVE fell by an additional 9% and closed at 83.20, its lowest level since May. The US 10-year yield fell to 4.15%, it has now broken its 200 and 50 day moving averages downwards, the next levels to observe are 4.05% (50% Fibonnacci retracement of the rise of 3 .59% to 4.50%) then 4.03% (100-day moving average).
The world’s geopolitical situation is even a little more complex this morning, the market seems to be worrying about it like its last shirt. So we have tensions between Beijing and Washington, war in Ukraine and Russia, an ongoing Arab-Israeli conflict, a major political crisis in France, a meltdown in South Korea and the fall of the Assad regime in Syria. The central banks are out in the coming days. The Reserve Bank of Australia (tomorrow) and the Bank of Canada (Wednesday) will precede the European Central Bank (Thursday). The latter raises great expectations while France and Germany are in intensive care convalescents. We will also monitor the statistics on inflation with the publications of price developments in November in the United States (Wednesday).
The macro from the past week tells us that the American economy continues to do well. For the first time in months, the manufacturing sector activity index came out above expectations at 48.4. Below 50 we consider that the sector is still in contraction. The employment report is generally in line with expectations with 227,000 creations in November compared to an estimate of 220,000. On the other hand, wages (+4% at an annual rate) continue to grow at a rate higher than the target set by the Fed for inflation (2%).
In terms of currencies, the dollar is regaining color at the start of the week, the EUR/USD pair returns to 1.0560, technically pressure remains present on the euro, we will particularly monitor the zone 1.0500 – 1.0497 while that towards the top it is the 50 days which plays the role of resistance, it is currently evolving at 1.0740.
Syrian President Bashar Al-Assad took refuge in Moscow after the advance of rebels in Damascus and the overthrow of his regime. Israel moved troops into Syrian territory while U.S. airstrikes hit ISIS targets, reflecting concerns about further upheaval in the Middle East due to the power vacuum.
-China’s Consumer Price Index (CPI) rose 0.2% year-on-year in November, as factory prices continued to fall. Stronger stimulus measures are needed to support the economy, according to Bloomberg Economics.
Donald Trump tells NBC that he has no plans to replace Jerome Powell when he returns to the White House.
Volkswagen and its employees clash in the latest round of negotiations over factory closures. AstraZeneca announced positive results from its Phase 3 trial of a new combination formulation for the treatment of leukemia. Boeing’s top lobbyist is leaving the plane maker. Super Micro Computer gets additional time to file its delayed annual report. Chevron CEO says there have been no discussions with President-elect Trump on Venezuela. BYD is on pace to exceed its 2024 sales target, and could even surpass Ford and Honda in terms of sales figures. Xiaomi plans to launch a third vehicle model in 2026.
This night and this morning in Asia, the indices are trading in scattered order. Tokyo gains 0.18% at the bell, Hong Kong jumps 2.74%, Shanghai loses 0.05%, Seoul falls 2.78% and the Nifty50 drops 0.16%. The future SPX rose by 4 points and Europe opened up 0.43%. Gold rebounds to $2,650 per ounce and oil remains weak, a barrel of WTI Light Crude is trading at $67.87.
