Dow + 1.98%, S&P 500 + 1.86%, Nasdaq + 1.59%, Russell 2000 + 1.10%, SOX + 0.55%, Eurostoxx + 1.40%, SMI + 1.39% .
The week got off to a good start for the Bulls, with the S & P500 (SPX) and its Nasdaq100 (NDX) counterparts successfully defending Friday’s close, while the Celtics put Hit in their place, but I’m distracted… The momentum that came in Friday night therefore remains present in the trading halls. We quickly realize that the Bears are not going to start the week in a good mood, the fault of JP Morgan, which announces that it will benefit from net interest income more than expected, while the return on its capital remains very stable. The result of the race: the JPM title soars by 6.2% and entails its sector, the KBW Bank index wins 4.1%. Dow Jones purrs with ease, he counts Goldman Sachs among its members, and GS is very important in the respectable index, which remains a “price-weighted index”, a real anomaly today, but respect for seniors … In the process With an optimistic and reassuring outlook, JP Morgan CEO Jamie Damon says the US economy remains strong despite the “opposing forces” of rapid inflation and the strengthening of the Federal Reserve. “Strong economy, big storm clouds,” says Mr. Damon, “they can dissipate.” It will be clear that the market is breathing a huge breath of fresh air thanks to the head of the Bank of New York, and this is doing my faith a great benefit, it has been a long time.
Joe Biden does not stay away and communicates at any cost, in a purely “Biden” style, his spin doctors have to change shirts about every two hours. It all starts well when the President of the United States says he plans to abolish certain customs duties from China to fight inflation, which is good for the appetite for risk. Indeed, it was more difficult when Joe Biden announced that the United States would support Taiwan in military uniform if China went on the offensive. A battalion of angels is passing … let’s clarify that the United States has never spoken in this direction until yesterday morning. As a result, the army of good old Joe’s doctors is working to turn the pedals back, we all deny, and the pill passes, surprisingly. However, it is interesting to note that the market almost did not flinch from this announcement yesterday morning, which is a sign of its current ability to sustainability?
The US indexes are close to their maximum for the day, the SPX podium of the day consists of finance, energy and technology, a strange triumvirate, which is closely followed by consumer stocks of commodities. So, yesterday we returned to the market en masse, 11 sectors of the SPX are progressing, and the Russell3000 index, which is 98% of all that can be invested in the US stock market, is gaining 1.73%. Trading volumes remain low, but the movement is, SPX successfully defended its support at 3815 points on Friday night, it is now at 3973 points and still has a long way to go before it is in safe territory, it must recover to 4114 points , the lowest figure in the session of February 24 (the day of Russia’s invasion of Ukraine). Interestingly, the demand for protection against falling stocks is growing significantly and reaches a level that has not been since March 2020, this is a good sign for the market, the fact that players are protecting indicates a lack of complacency, investors are not vigilant. The US stock market is also benefiting from oversold conditions, weaker sentiment than ever before, and too weak a position. Finally, given that the end of the month is approaching, rebalancing activity may be beneficial for stocks.
The bond market is quite calm, the yield on 10-year US bonds is up to 2.83%. Gold stabilizes at 1851 dollars per ounce, oil remains at 108.75 dollars per barrel of light oil WTI, while the situation on the currency side is moving significantly, the dollar is developing, especially against the euro, as confirmed by declarations of ECB President Christine Lagarde , which announces that the European Central Bank may abandon its policy of negative rates at the end of the third quarter, which is a very aggressive position, forcing the pair EUR / USD to 1.0676. traded at 1.0600 before the announcement. It should be added that the dollar is what is called “close trade”, everyone has it. Its strong recent rise involves releases, especially since we are concerned about the growth of the United States, the results of Walmart and Target have cast doubt on people’s minds.
The market remains in a very volatile mood, as evidenced by the current level of volatility (VIX is trading at 28.48). China is often setting the tone today, as always confused by its COVID-19 zero-spread policy. Last night’s announcement that Hong Kong is unlikely to quarantine hotels until July is bad. At the same time, Beijing is announcing a number of measures, including tax credits, benefits for permanent organizations and investment plans.
Esther George expects the central bank to raise interest rates to 2% by August, which is 100 basis points higher than today. “The inflation we are experiencing now is clearly too high and too broad to be reduced,” she said, adding that in sectors such as air transport and hairdressing, prices had risen despite declining demand. This year, Ms. George is voting in the FOMC.
Since mid-February, consumer discretionary stocks have been among the worst in Europe, with carmakers, luxury and retailers losing up to 25%. But according to Bloomberg, there may be hope. The 12-month P / E (price / earnings) ratio of the MSCI Europe Consumer Discretionary index is close to 10, a level that is often an indicator of lower-level proximity.
Return of PMI indices, which measure the optimism of procurement managers, for the May party for major economies. The United States will also have the Richmond Fed Index and new housing figures (16:00). Jerome Powell and Christine Lagarde are due to speak at two separate events, but this will take place after the closure of the European Parliament.
Richemont: Jefferies remains on the buying side, the target price is reduced from 140 to 125 francs. Bank of America continues to buy with a reduction in the target price from 175 to 170 francs. Photo: after the session, the effect is reduced by 31% after the disappointment quarterly. Zoom video: the stock jumped 17% from the session after a quarter better than expected. According to the data, Broadcom can pay about $ 140 per share for VMWare Wall Street Journal. Samsung has invested $ 356 billion over five years in strategic sectors such as semiconductors or biotechnology. Nestlé’s Health Science division is buying Brazilian organic, natural and plant-based food maker Puravida. In Brazil, Bolsonara fired the third head of Petrobras in a year. Jose Mauro Coelho was appointed only 40 days ago. According to CNBCAirbnb is expected to cease operations in mainland China. Roche is partnering with biotechnology company Kalivir Immunotherapeutics. Starbucks leaves Russia. Daphry continues the concession with Heathrow Airport. Deutsche Lufthansa and MSC are believed to be leading the bid for the Italian company ITA Airways. Toyota will cut its global production plan by 100,000 units in June. Khalid completes the acquisition of Cosabella.
Tonight and this morning in Asia, indices are trading in the red, sentiment is suppressed by nightly reports of covid. Tokyo lost 0.94%, Hong Kong fell 1.99%, Shanghai lost 1.83% and Seu lost 1.57%. The yield on the future SPX is 1.4%, and Europe fell 1% at 9 am. Instability remains the queen, so does patience.