(CercleFinance.com) – And 15! Wall Street brilliantly completed the longest series of weekly increases in the last 52 years (it’s stratospheric) and finished at the zenith on the eve of the weekend, which was a very positive indication in terms of ‘momentum’ (the main compass of ‘algos’).
And operators feel perfectly ‘comfortable’ with this bullish rally, precisely because it shows no sign of fragility: at no time do they suppose that such perfection of the bullish ‘trend’ is not natural and that the indices could be completely controlled, and any ‘pullback’ literally neutralized.
Commenting on these cascading records on the US indices (three consecutive on the S&P500 and the Nasdaq-100, two for the Dow Jones), the managers qualify the perpetual upward movement as justified: 80% of the 300 companies having published have revealed results better than expected, which is above the average of 75%.
Questioned – after the closing at the zenith of the day – about the fact that the market is highly valued, most of the managers replied that they would take advantage of the slightest ‘breath’ to strengthen their portfolios.
Lacking ‘stats’ to inspire Wall Street, Sam Altman, the boss of Open AI, is talking about fundraising of $7,000 billion (yes, seven thousand billion) to carry out his development projects: he has not specified over what period the biggest call to the market in history and the industrial era should take place… it is in any case comparable to the quantity of money printed by Western central banks during the period Covid.
The main US indices – with the exception of the Dow Jones which fell -0.14% to 38,671 – smashed new absolute records and not timidly, since the S&P500 (+0.57%) is hoisted in session in contact with 5,030 (i.e. +1.4% weekly and more than +5% in 2024). The Nasdaq-100 climbed +1% to 17,962 (+2.2% weekly, +6.85% since January 1 and +26% since October 30, 2023) and the 18,000 are within reach from this Monday .
The Nasdaq Composite soared +1.25% to 15,990 (+2.3% weekly and +6.5% since January 1, or +65% annual rate!) in the wake – obviously – of Nvidia with +3.6% and already +45% in five weeks (its capitalization jumped towards $1,800 billion).
The other stars of the day were Nvidia’s rivals: Applied Materials with +6.9%, Lam Research and MongoDb with +5.5%, the founder KLA with +5.1%, without forgetting ASML +2.9%, Palo Alto +2.7%, Datadog +2.6%, NXP +2.5%, AMD and Intel +1.9%. The titans of the rating, ‘GAFAM’, shone again with Microsoft +1.6%, Alphabet +2% and Amazon +2.7%.
The past week has also revealed significant disparities in global growth, with the American economy displaying insolent health, far ahead of Europe and China which tend, at best, to stagnate.
With the prospect of much more sustained activity than expected, a ‘soft landing’ in the United States in 2024 becomes almost improbable: it is not even certain that the Fed will ‘pivot’ in May if the labor market remains at the zenith (wage rise in sight) and if inflation resurfaces.
In the meantime, Wall Street continues to ignore tensions in the interest rate market, with the most optimistic seeing it as proof of the robustness of the American economy. The yield on T-Bonds continues to soar with a rate that exceeds 4.18% over 10 years, the highest since the start of the year.
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