The good signals are multiplying, with double-digit growth for the Chinese economy, as well as solid results for major companies. Yesterday, Wall Street set a new triple record, with the crossing of symbolic thresholds. The Dow Jones broke through the 34,000 point mark at the close, less than five months after it had erased the 30,000 point mark. The 20,000-point mark only goes back to 2017. As for the Nasdaq 100, here it is above 14,000 points, also on a new high. The S&P500 signed, at 4170 points, a new high. European indices are also doing well.
This surge continues to fuel debates on the timing of entry into financial markets. Savers who had little to invest in 2017 when the Dow was - already - at its peak, missed an opportunity to double down. From a long-term investment perspective, one should enter without delay to jump on the bandwagon and gradually and methodically strengthen one's positions, diversifying one's risk. Of course, this does not protect anybody from air gaps, crises and cycles, but the longer the investment horizon, the more the risk tends towards zero. There is little to oppose to this except ideology and theories of collapse.
China has shown what the statistics for the coming weeks will look like. Its Q1 GDP grew by 18.3%, in line with economists' expectations, whose projections ranged roughly from 12 to 22%. The country had slowed earlier than others in 2020, being the home of the epidemic. GDP for the first quarter of 2020 had contracted by 6.8%, providing a particularly favorable basis for comparison. The Chinese economy has been driven by strong infrastructure investment and domestic consumption. The US will produce its first GDP estimate for the period on April 29 and the EU on April 30. However, Q2 GDPs will benefit most from the base effect in the Western world.
The financial performance of companies in the first quarter seems to confirm analysts' projections: the beginning of the year is very dynamic, excluding sectors directly affected by the health restrictions. After LVMH and the American banks earlier this week, L'Oréal, Daimler and Publicis have confirmed the trend since yesterday.
Economic highlights of the day
European inflation for March, US housing starts and building permits for March and the University of Michigan's consumer confidence index for April.
Overnight, the Chinese GDP figures for the first quarter were released. The country's economic growth jumped by 18.3% compared to last year. This is a record, but it should be remembered that at the same time last year, the Chinese economy was at a complete standstill.
The euro is down slightly at $1.1984. The ounce of gold is consolidating its gains from the previous day at USD 1781. Oil is steady with Brent at USD 67.09 and WTI at USD 63.5. The yield on the 10-year U.S. government bond falls to 1.58%. Bitcoin is down to USD 60,960
*Morgan Stanley reported Friday a quarterly profit more than doubled year-over-year and exceeded expectations at $3.98 billion, thanks to strong mergers and acquisitions and trading activity. The stock was down slightly in pre-market trading after the announcement.
* Anthony Fauci said Thursday he hopes health officials will quickly decide to lift the suspension on the use of the Johnson & Johnson’s Covid-19 vaccine.
* The Australian Federal Court ruled Friday that Google misled consumers about the collection of personal data via mobile devices using the Android operating system, exposing the group to financial penalties.
* PPG Industries reported better-than-expected quarterly results Thursday night and said it expects continued growth in the second quarter.
* Cryptocurrency-related stocks are falling in pre-market trading, such as bitcoin, after Turkey's central bank banned the use of cryptoassets to purchase goods and services citing the risks involved.
* Eli Lilly announced Friday that it has filed to rescind the FDA's green light for its bamlanivimab antibody-based COVID-19 treatment, which will now be used in combination to achieve greater efficacy against variants.