Dow +0,78%, S&P 500 +1,00%, Nasdaq +1,51%, Russell +0,40%, SOX +2,84%, Eurostoxx +0,81%, SMI +0,40%.
The past week marks the return of a certain form of serenity to the market, which applauds with both hands the report on American consumer prices on Wednesday, which came out a tad below expectations. This is enough to delight the speakers who had apparently accepted the idea of a reboot of Dame Inflation. This general relaxation is accompanied by the American banking sector and its more than encouraging results, as well as by a most unexpected return to favor, the moribund luxury sector is popping the champagne after Richemont published sales ten times higher than expectations. Is the US debt ceiling about to be reached? whatever, Aunt Janet will sort it out for us, we’re not going to bother with such details… In the end, all the main stock indices progressed last week, the S&P500 index (SPX) put a At the end of 3 consecutive weeks of decline, it is doing slightly better than the Nasdaq100 (NDX), the latter having to deal with tech behemoths that are less in shape than usual. In Europe we are witnessing historic weekday records for the German Dax and the British FTSE 100, while Paris had a very good week, gaining almost 4%.
The report on American inflation allows bond yields to fall, the US 10-year goes from 4.81% on Tuesday to 4.6270% this morning, it tests its support of 4.63%, if it then breaks it it will look at 4.50%. The decline in bond yields has been almost universal across the globe over the past week, the dollar for its part remains strong, the EUR/USD pair is trading this morning at 1.0313, its main support is at 1.0226. Gold remains above 2700 dollars, oil trades at 77.93 dollars per barrel of WTI Light Crude, volatility falls by 18% last week, the VIX returns to 15.97, illustrating the general relaxation of the market sentiment.
The Fed Funds remain in the most total vagueness, nothing very concrete is expected about the Fed in the rather near future, we will now integrate the return to business of who you know this Monday, January 20, irony of calendar, on this very day when the United States remembers Martin Luther King Jr, they give up opening Wall Street for the occasion. Note also that this Monday is also Blue Monday, a nickname given to the supposedly most depressing day of the year by an advertising campaign in 2005, irony of the calendar when you hold us…
It’s been a long time… Last week the European stock markets experienced a certain euphoria. Although many analysts still favor Uncle Sam, portfolio rotation appears to be underway. Europe has outperformed the American indices since the start of the year (Eurostoxx50 +5.32% compared to +1.96% for the S&P500). European indices suffered from uncertain political contexts (notably in Germany and France) as well as their dependence on still anemic Chinese growth. European growth has stagnated but has not deteriorated, while market sentiment towards the stocks of the old continent has reached a level of extreme pessimism, this is often a contrary sign. At the same time, the ECB is expected to cut its rates at least two or three times this year (according to the Fed Funds) while the Fed remains in the dark. Certainly forecasts for growth in corporate profits remain lower in Europe compared to the United States, but the valuation of the SPX is currently 24.4 compared to 15 at the Eurostoxx, while the dividend yield of the SPX is at 1. 25% vs 3.12% for the Eurostoxx. The X factor of the American stock market remains tech, with AI in the lead, of which Europe is rather lacking.
-Over the week Goldman Sachs jumped +11.55%, Caterpillar +10.11%, while Apple (-2.79%) and Walt Disney (-1.10%) suffered profit taking. Quarterly results also favor Wells Fargo (+6.7%), Citigroup (+6.5%), JPMorgan (+2%), Goldman Sachs (+6%) and Morgan Stanley (+4.1%), but Bank of America fell -0.9%. The regulatory relaxation planned in the United States is well received, unlike Europe and Switzerland, forced to apply Basel III from 2025. JPMorgan remains popular with a return on equity of 22%
Donald Trump is preparing to invoke emergency powers to boost U.S. energy production, according to people familiar with him. It’s part of a series of steps he will take hours after being sworn in today as the 47th president. Chinese Vice President Han Zheng, who plans to attend the inauguration, calls for stronger negotiations with the United States in a meeting with JD Vance.
The FTC approves commitments to validate Chevron’s $53 billion takeover of Hess. The operation remains suspended from the appeal filed by Exxon Mobil. Intel soars 9% on Friday amid a new rumor about a possible takeover. The US Department of Health will grant $590 million in funding to Moderna to develop messenger RNA vaccines against influenza pandemics.
This night and this morning in Asia, the indices are trading up, except for Seoul which is down 0.14%. Tokyo advances by 1.17%, Hong Kong advances by 1.79%, Shanghai gains 0.08% and the Nifty50 gains 0.61%. The future SPX takes 8 points and Europe opens up 0.2%.
Focus on the first decisions of the 47th President of the United States today, American stocks return to business tomorrow.
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