🎯 The 5 stories of the week
Retreat or couples therapy?
Caught between China and the United States, EU countries must act to strengthen the bloc's competitiveness. The leaders of the 27 therefore met on Thursday for an "informal retreat” at a castle in eastern Belgium. While the diagnosis of Europe's economic slippage is more or less shared, there are disagreements over what to do about it-especially between France and Germany. The famed Franco-German couple, supposed to be the engine of the zone, is increasingly airing its divisions in public. Emmanuel Macron is arguing for more protectionism and a new round of common debt, while Friedrich Merz believes the focus should be on productivity and trade deals. The bilateral relationship is also being strained by industrial tensions over joint defence projects, such as the FCAS.
In search of AI's next loser
After fully embracing AI's winners, the market has decided to take an interest in the losers. Since the start of the year, the slump in software has morphed into a "SaaSpocalypse”. And this week, other sectors have paid the price in this hunt for fresh blood : wealth managers, data providers, real estate services and transport companies. Against this backdrop, investors are turning again to more traditional parts of the economy, and the Dow Jones is outperforming the Nasdaq.
The Takaichi tsunami
With 316 seats out of 465, Sanae Takaichi has secured the LDP's largest majority in the lower house, just four months after becoming the first woman to lead Japan. The victory will give her room to push through her agenda: at home, an economic stimulus; and abroad, a Japan showing a bit more muscle. Sanae Takaichi has thus become "the most powerful woman in the world”, according to The Economist.
An American economy that is no longer creating jobs?
January's jobs report far exceeded expectations: job creation twice the consensus (130,000 versus 65,000) and an unemployment rate down to 4.3%. But the annual revisions published by the BLS paint a more mixed picture. In 2025, only 15,000 jobs were created on average each month. The US labour market remains in the so-called "low hiring, low firing” balance (low hiring, low layoffs). Despite very weak job creation, the unemployment rate remains at historically low levels.
Europe at its zenith
In an earnings season marked by plenty of punishments, some companies are still managing to stand out. That is notably the case in Europe, where several heavyweights posted strong results (Safran, Hermès, Siemens Energy…). The CAC 40 and the EuroStoxx 600 both reached fresh highs this week.
Best of the rest
If Kevin Warsh has won Trump's confidence to succeed Jerome Powell, he will still need to win over the bond market. History shows that the latter tests Fed chairs.
Every earnings season feels like a statistical miracle: nearly eight out of ten US companies report profits above analysts' forecasts. Is that a sign of chronic US corporate superiority, or of analysts' weakness? Neither. That striking figure mostly says something about how the market works ahead of the release.
