(CercleFinance.com) – Wall Street completes a 6th consecutive increase, the bullish mechanism having been relaunched in ‘turbo’ mode on Wednesday evening by this press conference by the head of the FED which plunged the markets into a bath of unbridled euphoria. .. and purchases in ‘FOMO’ mode, not only on stocks but also on bonds, with -30 Points on the ’10 year’ in 36 hours flat.
The Dow takes +0.44% to 37,250 (new record), S&P500 +0.27 to 4,720 +0.18% the Russel-2000 takes +2.7% and ends at the last second – on the final bell – on the symbolic mark of 2,000 Points.
Never has the day before the ‘4 witches’ session been so ‘bullish’ in the 21st century, with a new absolute record on the Dow Jones and annual highs on all the indices (the Russell-2000 has just joined the stock market party which is in full swing).
Note that the regional banks index soared by +4.8% after a similar increase the day before: a real mini-crash on the rise with clearly a wave of panic redemptions of ‘shorts’ (the sector being in great difficulty since March 10).
The main locomotives on Wall Street on the eve of the ‘4 witches’ were ‘rate’ stocks like Zions Bancorp +9.2%, Beazer Homes +8.9%, Comerica +8.5%, MCD Holdings +8%, Boston Property +7.2%, Pulte Group +7.1%, US Bancorp +6.7%, Morgan Stanley +6.5%, Wells Fargo +5.6%… and Goldman Sachs +5.7% (we imagine Dantesque trading gains in the 4th quarter).
Over the past year, the ‘SOX’ (the semiconductor barometer) remains without rival: it has gained +64% since January 1, +255% over 5 years (and +28% since October 27).
The bullish rally that began 7 weeks ago will remain for posterity the most perfectly straight ever observed in the 21st century.
And this is not only true for stocks but also for bonds because December 13 was a real fireworks display on US T-Bonds: -30Pts on ‘2033’ T-Bonds in 24 hours (between 4 .21% and 3.91%, including -21Pts on Wednesday and -9Pts this Thursday), which represents -110Pts in 7 weeks.
The US ’30 year’ which serves as a reference for real estate is no longer far from falling below 4% (4.0300% at its lowest against 4.31% on Wednesday morning).
Expectations of rate cuts are evolving at breakneck speed: in mid-November, there were 3 rate cuts, on December 12 there were 6 cuts, and it is now 8 or 9 by the end of 2024 (i.e. -200Pts … but there are already anticipations circulating at -250!).
Yet the Fed said it only expected three rate cuts in 2024… but Wall Street seems to have heard 3… squared!
As for American indicators, the robustness of the economy cannot be denied: retail sales in the United States increased by 0.3% sequentially in November 2023, where the consensus expected a slight decline, after a decrease of 0.2% the previous month (revised from an initial estimate which was -0.1%).
The Department of Commerce, which publishes these figures, specifies that excluding the automobile sector (vehicles and equipment), American retail sales increased by 0.2% last month, after stability in October: the weekend of ‘Thanksgiving + Black Friday’ sales gave a saving boost to retail sales.
The Department of Labor announces 202,000 new registrations for unemployment benefits in the United States the week of December 4, a figure down by 19,000 compared to the revised figure for the previous week (221,000, compared to 220,000 initially announced).
The four-week moving average stood at 213,250 last week, down 7,750 from the previous week’s revised average.
Finally, the number of people regularly receiving compensation increased by 20,000 to stand at 1,876,000 in the previous week, the most recent period available for this statistic.
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