The Paris stock market is faring better than expected, losing just 0.1% to 7,420, compared with nearly -1% (to 7,354) this morning: US indices have reopened lower, but not as sharply as initially expected, and their decline is limited to -0.5% on the S&P500 and -1.1% on the Nasdaq, while the Dow Jones is up +0.5% to 42,150Pts.

Wall Street seems to have lost interest in the continuing rise in interest rates: the '10-year' US T-Bond (+1Pt) peaked at 4.785%, while the '30-year' (+1.5Pt) oscillated between 4.9700 and 4.978%, a curse for the real estate sector.
In another sign of nervousness, the VIX is soaring +8% towards 21, while the S&P500 is off by no more than 0.5%.
This doesn't "fit" with the VIX's high level of tension: is a further decline to be feared?

Wall Street is gearing up for a decisive week, marked by the publication of quarterly results by a number of US economic heavyweights, which will set the tone for the coming sessions.

The major US banks will be in the spotlight in this first week of the earnings season, with publications by Citi, Goldman Sachs, JPMorgan and Wells Fargo scheduled for Wednesday, followed by those of Bank of America and Morgan Stanley the next day.

Comments from these leading financial institutions will provide investors with interesting reading on the current state of the economy, consumer spending and the economic outlook in the USA.

According to FactSet, US corporate profits in the S&P 500 index are expected to have risen by an average of 11.7% year-on-year in Q4, their biggest increase since the end of 2021... but this average masks colossal disparities, with 70% of profits concentrated in a dozen companies, while most of the companies in the 'S&P480' (the S&P500 minus the 20 titans of the stock market with over $500 billion in 'capi') will post 'on average' declining results over 12 months.

As we saw last Friday with the solid US employment figures, good statistics are no longer enough to push the market higher, as they are synonymous with less monetary easing.

The results "season" will therefore determine whether the New York Stock Exchange can regain upward momentum, bearing in mind that the S&P 500 is currently trading at 21.5 times earnings, well above its ten-year historical average (18.2).

The reopening of the results season will not, however, completely overshadow what is currently at stake on the other side of the Atlantic, between uncertainties over Donald Trump's future policies, the reawakening of inflation and tensions over bond yields.

The results season also begins in a climate of growing trade uncertainty, a week ahead of the inauguration of Donald Trump, who will officially become the 47th President of the United States next Monday.

During his campaign, he stated his intention to tax Chinese goods by up to 60% and goods from other countries by 10%-20%.

The implementation of long-lasting 'universal' tariffs (at 10/20%) would be a negative factor for equities, especially for retailers, carmakers, technology companies, semiconductor manufacturers and certain industrial groups.... not to mention the impact on final prices paid by consumers.

In view of these uncertainties, and with valuations becoming less attractive, investors are wondering whether the time has not come to take profits on US stocks, worried that a major correction could occur in the months ahead.

In a note published last week, Goldman Sachs strategists estimated a 30% probability that world stock markets would fall by at least 10% within three months, and by more than 20% within 12 months.

Against this backdrop, gold is consolidating by -0.9% at $2,665, after recovering last Friday to levels close to its all-time highs set over 2 months ago.
The dollar is proving firm, however, setting a new annual zenith against the euro, which fell to around 1.0180 and is now down -0.4% at 1.0200.
The $ Index gained 0.5% to break through the 110 barrier (at 110.20).

The general tension in interest rates (+2.7Pts on our OATs to 3.45%, +1.5Pt on Bunds to 2.5830%) is beginning to affect cryptos heavily, with Bitcoin down 4% (below $91,000), Solana and Ethereum down 7% (to $3.020) -10% on Cardano (and over 1 week, Solana falls by -20%, Ethereum by -18%).

Oil prices confirm their upward trend, as the Biden administration decided on Friday to impose new sanctions on the Russian energy sector.

Brent still gains almost 1% towards $81 a barrel, WTI +1.1% towards $76.7.

In French company news, bioMérieux announces that it has reached an agreement to acquire SpinChip Diagnostics, a Norwegian company in which the French in vitro diagnostics specialist has held a 20% minority stake since March 2024.

Sanofi reports that the Chinese NMPA has approved its Sarclisa, in combination with pomalidomide and dexamethasone (Pd regimen) for the treatment of relapsed or refractory multiple myeloma in adults who have received at least one prior treatment.


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