(CercleFinance.com) – It was a ‘100% green’ week which ended Friday evening, with five consecutive sessions of increases and strong scores ranging from +5.2% to +7.5% weekly for equity indices, against a backdrop of easing on the bond markets.
The good series continued with the Dow Jones which recovered +0.66% (+5.2% weekly), the S&P500 +0.94% (+6.1% weekly) and the Nasdaq +1.38 % (+6.6% weekly). The Russell-2000 significantly outperformed the other indices with +2.71% (and +7.5% over the past week) after falling so far behind since January 1st.
In addition to ‘small and mid-caps’, the two big winning sectors of this week of easing of rates were the builders of individual houses and the banks with +10.9% and +11% respectively, while the big losers were the pharmaceutical sector and the oil companies.
Defensive stocks were abandoned while Hassan Nasrallah’s speech did not call for the outbreak of a war, thus reassuring the markets which above all feared the opening of a new front on the southern border of Lebanon.
Investors therefore approached the weekend with confidence, without mentioning a new ‘weekend of all dangers’ and remained on the good impression created by the spectacular recovery of the bond markets in three sessions following the ‘dovish’ inflections of Jerome Powell’s speech.
The relaxation which extended over nine sessions emerged as the opposite – or the exact symmetry – of the last bullish segment from October 12 to 23. For T-Bonds, the ’10-year’ fell by 13 basis points to 4.545% and a floor was even recorded at 4.481%.
The upward dynamic in yields thus seemed to reverse downward on T-Bonds while the Fed’s ‘pivot’ was now anticipated from June 2024 and no longer in September 2024, against a backdrop of signals of weakness in the economy. American.
Indeed, the latter only generated 150,000 non-agricultural jobs in the month of October, a number lower than market expectations, and the unemployment rate increased by 0.1 point to 3.9%, according to the monthly report. of the Department of Labor.
Likewise, the ISM services index also came out well below expectations: it fell to 51.8 last month, after having stood at 53.6 in September, when economists expected a more decline. limited to around 53.
Copyright (c) 2023 CercleFinance.com. All rights reserved.