Weekly market update: Rich people problems

European stock markets enjoyed a sunny spell this week, buoyed by whispers of lower-than-expected U.S. tariffs. Though these rumors were swiftly debunked, the markets seemed to bask in the optimism. By Friday, however, investors decided to pocket some gains, as robust U.S. employment figures suggested the Federal Reserve might hold off on rate cuts for a while. Meanwhile, Wall Street, after a brief sprint, stumbled slightly as it braced for next week's U.S. inflation data.

Weekly variations* US 500 5,827  -1.94% WALGREENS BOOTS ALLI... +23.79% CONSTELLATION ENERGY... +20.92% DELTA AIR LINES, INC... +13.47% PG&E CORPORATION -15.83% CONSTELLATION BRANDS... -18.07% EDISON INTERNATIONAL -18.55% DOW JONES INDUST... 41,938.45  -1.86% NASDAQ 100 20,847.58  -2.24% FTSE 100 8,248.49  +0.3% GOLD $2,689.82  +1.86% WTI $76.54  +3.81% EURO / US DOLLAR $1.02  -0.58%

This week's gainers and losers

Gainers: Micron +10.54%: The memory chip specialist surged on the back of results from Taiwanese Foxconn, a key supplier to Apple, which reported a 42% jump in year-on-year sales in December. At the same time, Micron benefited from announcements by Microsoft, which plans to invest $80 billion in AI this year. Ebay +6.96%: In response to EU accusations of anti-competitive practices, Meta is to launch a test in Germany, France and the USA, which will enable buyers to view EBay listings directly on Facebook Marketplace. This will give EBay sellers access to a wider audience. Arcadium Lithium: +7.4%: Arcadium Lithium's shares increased after receiving clearance from the Committee on Foreign Investment in the U.S. for its acquisition by Rio Tinto. The merger, valued at $6.7 billion, has satisfied or waived merger control clearances in several countries, including the U.S. The transaction is still subject to approvals in Australia, Canada, and Italy, along with other customary conditions. Boston Scientific: +4.62%: Boston Scientific's stock saw a significant increase following the announcement of its definitive agreement to acquire Bolt Medical, which specializes in advanced laser platforms for intravascular lithotripsy. The acquisition involves an initial payment of approximately $443 million for the 74% of Bolt Medical not already owned by Boston Scientific. Losers: IonQ -32.32%: Quantum computing stocks, including Rigetti Computing, Quantum Computing, IonQ, and D-Wave Quantum, experienced significant declines following comments from Nvidia's CEO, Jensen Huang. He suggested that "very useful quantum computers" are likely two decades away, which may have dampened investor enthusiasm for the sector.  Greggs -25.54%: The bakery chain notes a slowdown in growth in the last quarter. The market context is complicated and it's doubtful that the coming months will be any better. Edison -18.55%: As the fire wreaks havoc in Los Angeles, Edison is the main supplier of electricity in the areas affected by the disaster, forcing it to cut services to many customers, resulting in a loss of revenue. B&M -12.2%: The British retailer published results that did not satisfy the market, with a slowdown at its Heron Foods subsidiary. Profit forecasts have been revised downwards.

Commodities

Energy: Oil prices continue to rise (third week in a row), buoyed by the cold snap in the USA. Strong demand for heating fuel has pushed up the price of US LNG, as well as that of the oil it substitutes. US supply could also be impacted by the frost affecting production areas as far away as Texas. Against this backdrop, the market is watching Trump's comments on Iran. His administration is likely to be much tougher on Tehran, with new sanctions against Iranian oil on the cards. Brent crude is trading higher at USD 78.70, while WTI is trading around USD 75. Metals: Despite the rising dollar and threats of US protectionism, industrial metal prices rebounded this week. A tonne of copper reached USD 9078 in London (spot price). Beijing's ability to revive its economy and support its real estate sector is one of the central catalysts for 2025. Gold also rallied to USD 2,680, resisting the rise in bond yields. Agricultural products: Nothing to report from Chicago, where wheat and corn diverge, the former stabilizing on the downside (at 534 cents for the contract expiring March 2025) and the latter consolidating on the upside (at 457 cents for the contract expiring March 2025). Cocoa began its first full week of the year down. Nevertheless, concerns about supply from Côte d'Ivoire and Ghana continue unabated.

Macroeconomics

Atmosphere : In December, the United States created 256,000 jobs, compared with the consensus forecast of just 165,000. “Worse still, the unemployment rate fell by 0.1 points to 4.1%. The only positive point was that wages rose by 0.3% on a monthly basis. These statistics did not please investors at all, as they are clearly not going to encourage the Federal Reserve to lower its key interest rates. Bond yields surged following the announcement, with the US 10-year gaining 10 basis points to 4.78%. Conversely, this insolent resilience of the labor market is weighing on equity markets on both sides of the Atlantic. The year 2025 is not off to an auspicious start, at least if we assume that good economic news is bad news for monetary policy! This could rekindle tensions between Donald Trump and Fed boss Jerome Powell. Crypto : Bitcoin is down 4.4% this week, once again hovering around the $94,000 mark, $13,000 below its all-time high of $108,000 reached on December 17, 2024. The gloom on the cryptocurrency market can be explained in part by lowered expectations of an interest rate cut in the United States. Indeed, bitcoin has historically enjoyed its best periods in low-rate environments, and the strength of US employment figures reinforces the idea that the Fed could wait several months before making another rate cut. This situation is prompting investors to turn away from risky assets, and cryptocurrencies are among the first victims. Now, crypto-investors are eagerly awaiting Trump's inauguration on January 20. Although the president-elect has appointed several crypto-friendly figures, such as Paul Atkins as head of the US stock market regulator or David Sacks as crypto advisor to the White House, questions remain as to his ability to quickly institute a truly crypto-friendly policy. Find out in the coming weeks.

Rich people problems The Trump effect ran out of steam on the equity markets this week. Fears of continued high US interest rates took over, after a new series of economic indicators raised fears of overheating. With just ten days to go before the inauguration of the new US President, investors will be looking ahead to the first quarterly results published on Wall Street, particularly those of the big financial stocks, led by JPMorgan and Wells Fargo from next Wednesday. We wish you an excellent year on the stock market.

Things to read this week

Emerging markets and their difficult monetary equation In the past, developing countries preferred to borrow in US dollars, to finance their imports and major infrastructure projects, which were generally entrusted... Read more The profit bubble or why this time it's really different Since October 2022, the US equity market has risen by over 60%. This impressive rise is largely due to the performance of the magnificent 7. A handful of... Read more Corporate valuation: Big mistake! Kennecott is an American company infamous for a financial operation that cost it dearly in the 1970s. In this case study in corporate valuation, taught by... Read more

*The weekly movements of indexes and stocks displayed on the dashboard are related to the period ranging from the open on Monday to the sending time of this newsletter on Friday. The weekly movements of commodities, precious metals and currencies displayed on the dashboard are related to a 7-day rolling period from Friday to Friday, until the sending time of this newsletter. These assets continue to quote on weekends.