After 3 weeks of stagnation, the Paris stock market soared +2.3% on Friday and has been going nowhere since this morning (complete stability at 30 minutes to close), despite a notable improvement in rates: volatility crushed, algorithmic straitjacket, trading confined to a 7,621/7,649 range (and no absolute record in sight).

The tense situation with farmers in France, the unprecedented tug-of-war between Texas (Martial Law), the Republican states in solidarity with Texas and Washington (which is trying to regain control) do not seem to be of the slightest concern to the financial world, for whom quarterly results remain the priority.

In Europe, red dominates but there are no notable differences: -0.25% in Frankfurt, stagnation for the E-Stoxx50.
TotalEnergies (+1%) keeps the CAC40 and E-Stoxx in touch with Friday's record levels, while Wall Street is still looking for a trend after 90 minutes of trading (Dow Jones -0.1% and S&P500 at equilibrium).

Investors are gearing up for another busy week, with an avalanche of quarterly results in the technology sector, interspersed with leading indicators and Fed decisions.

The US central bank has made it clear that it plans to cut interest rates in 2024, and the question now is to determine when, by how much and at what pace.

The Federal Reserve will announce its decisions on Wednesday evening, ahead of a press conference by Chairman Jerome Powell.

While no major announcements are expected, market participants will be on the lookout for indications of how its monetary policy will evolve, especially as recent economic figures have surprised with their strength.

Powell should leave the door open to the possibility of a rate cut in March, while avoiding reinforcing the probability of such a scenario for the time being", says Jim Reid, market analyst at Deutsche Bank.

According to the FedWatch tool, only 48.6% of traders now anticipate a rate cut in March, with 50.4% expecting a further "status quo".

The week will also be marked by the releases of heavyweights Microsoft, Apple, Alphabet, Amazon and Meta, which will be particularly closely scrutinized as the Nasdaq moves to record levels.

Given that these five stocks account for over 24% of the S&P 500's total weighting, investors could start to clear out if the news isn't good.

This week promises to be one of the busiest of the US earnings season, with a total of 106 S&P components due to present their fourth-quarter accounts.

Of the companies that have already reported, 69% have posted earnings ahead of analysts' expectations, compared with an average of 77% over the last five years.

Investors are also likely to be cautious as they enter a week packed with indicators, both in the USA and Europe.

In this respect, the most eagerly awaited data will certainly be the US employment report for January, which will shed light on the evolution of the labor market, much watched by the Fed.

But the Eurozone's GDP figures for the fourth quarter, on Tuesday, followed by consumer prices in the region, expected on Thursday, will also be closely watched.
On the bond front, the start of the week is comforting: last week's losses have been fully erased since this morning, with -5 basis points on T-Bonds at 4.112%, and a similar detente is taking shape on our OATs at 2.726% and 2.237 on Bunds.
Italian BTPs are doing better, down 7.3 basis points to 3.75%.
On the currency front, the dollar is recovering, while the euro is losing -0.3% to $1.082.
Brent crude oil is consolidating by -1.2% to $82.7, but the trend remains bullish. Gold, on the other hand, gained +0.8% to $2,036, aided by lower interest rates.
In French company news, SMCP (Sandro, Maje, Claudie Pierlot) now expects a slightly weaker annual performance than previously forecast. It now anticipates sales of around 1.23 billion euros for 2023, i.e. +3.8% growth at constant exchange rates (instead of 'mid-single-digit' growth), and an adjusted EBIT margin of between 6.4% and 6.6% of sales (instead of 7% to 9%).

Eutelsat (-15%) announces a revision of its financial targets ('profit warning') for the 2023-24 financial year, now expecting sales in the range of 1.25 to 1.3 billion euros (previously 1.32 to 1.42 billion).

Finally, Renault Group announces the effective arrival, on January 29, of Valérie Gillot as Director of Group and Business External Communications, a position to which she will report directly to Stéphanie Cau, Director of Communications.


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