(CercleFinance.com) – The upward trend is not ‘dead’ and Wall Street has resources: buyers were quick to ‘pay’ for the first ‘hiccup’ of the year 2024, and even the first decline above -1.5% in a few hours observed since the end of October.
The US indices showed themselves to be resilient, initial gains (+0.3%) quickly tripled, then quadrupled mid-session, with the S&P500 (+1.4% to 5,222) returning to near its absolute records, at less than 0.7%.
In the end, the broad index gained +1.1% to 5,204 (-0.9% weekly), the Dow Jones +0.80%, the Nasdaq index recovered 1.25% (after -1.45% the day before, i.e. -0.9% weekly).
The slogan ‘buy all the dips’ still seems to be relevant in New York and the ‘titans’ and ‘semi’ champions were picked up again with Meta +3.2%, Western Digital +3 .4%, Netflix +3.1%, Amazon and AMD +2.8%, Nvidia and Marvel Techno +2.5%, Microsoft +1.8%.
Still under pressure, Tesla fell by -3.6% with the rumor of the abandonment of the development of a ‘low cost’ Tesla at $25,000 (a niche dominated by its main Chinese competitor BYD)… but shortly after the close the stock rose +2.5% with the mention of a new project: the ‘robotaxi’.
The publication of the US ‘NFP’ at 2:30 p.m. was eagerly awaited… and the American economy created more jobs than expected in March, according to the monthly report from the Department of Labor published Friday.
The monthly ‘NFP’ report recorded 303,000 non-agricultural jobs created last month in the United States, compared to 270,000 (revised from 275,000) in February, while the consensus collected by Reuters predicted only 200,000.
The unemployment rate fell to 3.8% in March, from 3.9% the previous month (Reuters consensus unchanged at 3.9%).
The increase in average hourly wages – a closely monitored component – accelerated to +0.3% in March, after +0.2% in February (consensus of +0.3%) but its progression slowed slightly to 4.1% against +4.3% (annualized) the previous month, which coincides with the consensus of 4.1%.
It is probably this last point which has revived Wall Street’s optimism since wages are ‘not slipping’, quite the contrary, after the acceleration observed in 2023.
Investors only took 24 hours to digest the statements of Neel Kashkari, the president of the Minneapolis Fed.
He warned that ‘if inflation continued to follow successive sequences of decline then occasional bursts, the question would arise as to whether we should not abandon any rate cut this year’.
If some strategists only see a slight slump within an underlying trend which remains bullish, others evoke a prelude to a correction which is now inevitable.
‘The strong start to the year signed by the stock markets increases the risk of renewed volatility in the short term,’ warns Larry Adam, investment director at Raymond James.
“The latter usually experience between three to four sequences of correction of at least 5% per year, and the last one currently dates back to September 2023,” he recalls.
The bond markets remain ‘heavy’ with T-Bonds which returned to re-test the crucial resistance of 4.405% (+10Pts), the ‘2 years’ climbing towards 4.751% (i.e. +11Pts) and a ’30 years’ taking +8 Points to 4.552%.
With the crossing of 4.3900%, the scenario of a return to 4.500% becomes more and more plausible.
Geopolitical tensions in the Middle East and the decline in Russian refining capacity continue to maintain pressure on oil: the barrel of ‘Brent’ (+1.2%) sets a new annual record at $91.6, the ‘WTI’ ‘ also reached a zenith at $87.5 (+4% weekly).
The ‘geopolitical fact’ continues to push gold upwards (+1%) beyond $2,330 (new zenith, or +4% weekly), silver crosses $27 (+8% weekly).
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