(CercleFinance.com) – Wall Street should take a break on Monday after its historic peaks reached last week while awaiting some important meetings, in particular Friday’s employment report.
Half an hour before the opening, contracts on the S&P 500 indices and the Nasdaq 100 fell between 0.1% and 0.5%, announcing a start to the session in the red.
The major New York indices recorded new highs last week, peaks which can be explained by the optimism surrounding future rate cuts and by the good performance of the big technological heavyweights.
A certain caution should, however, prevail this Monday before the monthly report on job creation that the Labor Department will publish on Friday.
Given the strength of the job market in recent months, these figures are likely to influence market expectations regarding the evolution of the monetary policy of the Federal Reserve, which will meet in two weeks.
The consensus expects an average of 200,000 job creations in February after the fireworks of January, which resulted in 353,000 new positions, double market forecasts.
The week which begins will also be animated by a speech on Wednesday by Jerome Powell, the president of the Fed, before the Financial Services Committee of the House of Representatives.
Investors will also continue to monitor political news, with the organization of primaries tomorrow in around fifteen states, a crucial day known as ‘Super Tuesday’.
The victories of Joe Biden and Donald Trump are widely expected in their respective camps, which means that the two candidates should meet again on November 5.
This busy schedule could be a good excuse for investors to take a little profit and perspective.
‘In the short term the markets seem, it is true, overbought’, recognizes Alexis Bienvenu, fund manager at LFDE. “We could suspect the effect of a form of bubble on major technology stocks,” he adds.
The professional notes, however, that these robust performances are firmly anchored in economic fundamentals, knowing that American growth has continued to surprise during 2023.
In this context, BofA strategists have revised upwards their end-of-year target on the S&P 500 index to bring it to 5,400 points, i.e. an upside potential of 5% compared to current levels.
Those at Goldman Sachs are counting on an S&P index of 5,200 points at the end of 2024, the equivalent of a potential increase of 4% due to an expected increase of 8% in the profits of American companies this year.
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