Dow -0,06%, S&P 500 +0,55%, Nasdaq +1,24%, Russell -0,08%, SOX +2,84%, Eurostoxx +2,36%, SMI +0,58%.
The atmosphere was rather joyful yesterday morning on the trading floors. Foxconn (which manufactures electronic products for large tech companies, notably Apple) has published robust sales, the Washington Post publishes an article indicating that Donald Trump has softened his position on customs barriers, an article denied by the main interested party but the “damage” is done and the market begins to believe it, a leak organized by the president-elect’s team to test the market? For its part, Microsoft announces massive upcoming spending in artificial intelligence infrastructures and the CES in Las Vegas, the Consumer Electronics Show, the annual high mass of geeks begins, the CEO of Nvidia Jensen Huang presents a new generation of graphics cards based on the Blackwell architecture, which offer major advances in performance and energy efficiency.
Luxury, automobiles and the inevitable tech start their trading day under the best auspices. The European tech pops the champagne in video (ASML +8.69% on the session), the bulls purr with ease until the time of our snack where the soufflé begins to fall and sends the indices to close at the lowest of the day, or almost. The Dow Jones ended its Monday slightly down, the SPX still increased by 0.55% and the Nasdaq100 (NDX) advanced by 1.09%. The equally weighted S&P500 index (SPW) falls a bit, we find ourselves once again in the scenario “after tech the flood”. It doesn’t take much more for Nouriel Roubini’s followers to emphatically declare that a market that fails to preserve its morning gains doesn’t really inspire confidence, that all this is going to end badly and that we would do better to go and burrow deep in a cave in Montana. Certainly, certainly, and during this time the Nasdaq Composite has already increased by 2.87% since January 1, Nvidia by 11.2% (did I tell you that Nvidia’s PEG is less than 1?), Broadcom by 1 .97%, Meta 7.6%, Amazon 3.8% and Alphabet 3.95%. Only Apple and Netflix declined slightly.
In summary, the bullish wave observed since October 2022, even if it sometimes takes breaks, remains in place, at least at the start of 2025, despite the rolling eyes of the bond market, the yield of the 10 US rates are at 4.62%, or 100 basis points higher than in mid-September, while the Fed recently lowered its key rates. However, we know that inflation refuses to convincingly return to a downward path and that Donald Trump returns to business in 13 days and with him his inflationary policy. Technically, we will look at the next resistance of the US 10-year at 4.73%. Note in passing that the 2/10 year US spread is positive by 36 basis points, it has not reached such a level since May 2022, it indicates a potential easing of fears of recession in the market, a future stabilization of the Fed’s monetary policy and improved growth prospects. Interesting configuration of the bond market therefore, to follow closely.
The Dollar regains some ground, the EUR/USD pair returns to 1.0409 after touching 1.0226 on January 2. That said, the technical configuration of the euro does not encourage us to throw ourselves into its arms with our eyes closed.
Gold is regaining some color, the ounce goes back to 2644 dollars, its short-term support is located at 2626 dollars, this is where its 100-day moving average is currently moving.
Oil is also doing better, the barrel of WTI Light Crude has risen to 73.30 dollars, it sees its next resistance at 75.51 (200 days). Institutional managers are becoming bullish again on black gold, we observe that hedge funds have increased their long positions by 41% in three weeks, at the same time shorts are covering themselves more and more.
-On the macro front, November factory orders fell more than expected in the United States, signaling a slowdown in manufacturing demand. However, the services sector continues to show strong momentum, with record optimism for 18 months and an acceleration in new orders. Recent Treasury auctions show mixed demand, with significant issuance expected this week. Finally, the Fed continues to take a cautious approach, suggesting that it is not rushing to cut interest rates despite signs of strength in certain economic sectors. Recent economic data reflects a divergence between a pressured manufacturing sector and a robust services sector. The Fed favors caution in its approach and markets closely monitor bond issues to gauge investor expectations.
In Canada, Mark Carney says he is considering entering the race to replace Justin Trudeau. Mr. Carney, who is chairman of Bloomberg Inc., and Chrystia Freeland top a list of contenders. a radical overhaul.
Janet Yellen told Chinese Vice Premier He Lifeng of her “serious concerns” about cyberattacks, a week after the United States said Chinese hackers had broken into Treasury networks.
On today’s macroeconomic menu, European inflation for December (11:00 a.m.) will precede the US services ISM and the JOLTS survey (4:00 p.m.).
BTG Pactual is reportedly in talks to buy Julius Bär’s Brazilian operations for around 1 billion reais, or 150 million Swiss francs. AbbVie cuts its profit forecast for 2024 due to the cost of its acquisitions. Walt Disney will merge its Hulu+ Live TV service with FuboTV, forming a major new streaming entity 70% controlled by Disney. Deere is banking on autonomous tractors with new machines. BlackBerry rose 8% yesterday thanks to its QNX unit’s collaboration with Microsoft. The United States adds Tencent and CATL to the list of Chinese companies suspected of helping Beijing’s military. United States Steel and Nippon Steel are asking the courts to validate their merger after Biden’s veto. LG Electronics is partnering with Microsoft to use the American’s AI technology in its consumer products.
This night and this morning in Asia, the indices are trading up except Hong Kong, which is down 1.35% (thanks Tencent). Tokyo gains 1.97% at the bell, Shanghai advances 0.71%, Seoul advances 0.14% and the Nifty50 rises 0.54%. The future SPX trades in a very slight decline and Europe opens down 0.3%.
