A 100% "green" week, with a 9th consecutive session of gains, in the wake of luxury stocks, with the CAC40 up to the 8,000 mark (+1%) and flirting with +8% since January 1st.
Since mid-January, our "Fantastic 4" of the luxury sector have rediscovered their role as driving forces, with +5% for Kering, +3% for L'Oréal, +1.5% for LVMH and +2.3% for Hermès (all-time record at 2,700 euros), in the wake of Burberry (+15% in London), whose results, "less worse than expected", have been hailed by the markets.
The Euro-Stoxx50 (stable at 5,215) set a new record this morning at 5,260Pts, maintaining a +0.2% lead: after underperforming US stocks last year, and indeed for several years, European equities have been enjoying a comeback in recent weeks, driven by valuations deemed undemanding.

In reality, European equities are clearly at a discount to US equities - the STOXX Europe 600 and S&P 500 are at a 40% discount," points out Christopher Dembik, Investment Strategy Advisor at Pictet AM.

A slightly hesitant opening on Wall Street calmed the initial euphoria, but with +0.4%, the CAC40 gained around +3% over the week, as did the E-Stoxx50.

The Nasdaq gave up just over 0.2%, the Russell-2000 -0.6% (less appetite for risk), the Dow Jones in turn turned downwards (-0.2%).
But optimists will remember that the S&P500 (-0.1% to 6.110) set a new record at 3:35 p.m. on Friday, at 6,128 p.m.

Wall Street was slightly dampened this afternoon by a number of US figures, notably the marked slowdown in US private-sector growth in January, according to S&P Global, whose composite PMI index came in at 52.4 in flash estimates, compared with 55.4 in final figures for December.

The slowdown was concentrated in the services sector, where output grew at its slowest pace since last April, while manufacturing output returned marginally to growth after five months of decline.
The second disappointment was the fall in US consumer confidence to 71.1 in its final version, compared with 74 in December, after a first estimate of 73.2, which economists were expecting to be 73.

Joanne Hsu, the report's author, explains this first drop in the index in the space of six months by the deterioration in households' propensity to purchase durable goods and the prospect of rising unemployment.
At the same time, one-year inflation expectations have risen from 2.8% to 3.3%, back above the 2.3% to 3% range in which they were found in the two years preceding the pandemic.
According to the UMich, some 47% of survey participants say they expect the unemployment rate to rise in the coming year, a figure at its highest since the recession linked to the Covid epidemic.

Finally, sales of existing homes in the U.S. rose 2.2% in December 2024 from the previous month, to a seasonally adjusted annual rate of 4.24 million, according to the National Federation of Realtors (NAR).

'Consumers clearly understand the long-term benefits of homeownership. Job and wage gains, as well as rising inventories, are having a positive impact on the market', according to Lawrence Yun, chief economist at the NAR.
The median sales price of existing homes rose 6% from December 2023 to $404,400, and the inventory of unsold existing homes stood at 1.15 million, representing 3.3 months of inventory at the current run-off rate.

There were also figures from Europe, and they were more positive: the preliminary PMI HOCB index measuring private sector activity in France rose slightly above 48.3, but remains well below 50... and activity remains languid in the Eurozone.

These figures confirm what we already know, namely that the eurozone economy is stagnating, the UK is mired in stagflation and the US economy continues to outperform its peers by a wide margin", stresses Michael Brown, market strategist at Pepperstone.

The analyst points out, however, that many uncertainties remain, mainly linked to developments in US trade policy, which could derail the current stock market rally.

'It's not in anyone's interest to take on too large a position at the moment, knowing that a setback could occur at any time with the possibility of a Trump tweet sending the market tumbling again', he warns.

The US bond market is turning around after the PMIs and the U-Mich, with T-Bonds falling back from 4.66% to 4.600% (-3.6Pts).
On the other hand, the trend remains heavy in Europe, with Bunds at 2.538% (+2.5Pts) and OATs at 3.304% (+1Pt)... note that the OAT/Bund spread is contracting to less than 77 basis points.
The euro confirmed its comeback, gaining 1% against the greenback, to $1.0520.

In London, Brent crude rose by 0.5% to $78.2 a barrel.

In terms of earnings, investors will be following the publications of American Express and Verizon, expected at lunchtime.

In Europe, Ericsson announced this morning that it had posted a "solid end to the year" in 2024, with sales up 2% in Q4 and net income up to SEK 4.9 billion from SEK 3.4 billion a year earlier.

In the news for French companies, Stef posted cumulative sales for 2024 of 4.8 billion euros, up 8.1% (+2.8% on a like-for-like basis), including nearly 1.26 billion for the fourth quarter, up 8.8% (+3.4% on a like-for-like basis).

GL events gained 4% the day after the events specialist announced sales of 431 million euros for the fourth quarter of 2024, an increase of over 4% and higher than the 410 million expected by Oddo BHF.

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