The Paris Bourse will close December with a new all-time closing record, above 7,577 and above 7,600Pts, close to the zenith (7,654) tested the previous day.

The New York Stock Exchange continues its bullish run in this "4 Witches" session (Nasdaq gains 0.5% to 14.825, the Dow Jones surpassed the previous day's records), crowning one of the most stubbornly bullish stock market months since the beginning of the 21st century (+5% over the last 4 100% positive weeks, and no -1% retracement in between for the S&P500).

The prospect of an imminent rate cut in the USA continues to fuel investors' risk appetite... but the 'VIX' (-2.5% at 12.20) indicates a very high level of 'complacency', and RSIs have never been so 'stretched' in 4 years (December 2019).

Stakeholders estimate the probability of a rate cut in the USA at 60% in March, according to the CME Group's FedWatch barometer. This is lower than the previous day (64.7%), but much higher than a month ago (24%).

The markets also detected in Jerome Powell's comments a "Goldilocks" scenario, i.e. robust growth and inflation almost under control: a real fairy tale.

The latest indicators published this Friday are rather mixed, but they do not call into question the scenario of a soft landing for growth.

The Empire State index - which measures manufacturing activity in New York State - fell by 24 points in December to -14.5.
But this was offset by the rise in private sector growth: S&P Global published a composite PMI index of 51 flash estimates, compared with 50.7 final estimates for the previous month.

The acceleration in production is supported by a faster increase in new orders since July", points out S&P Global, adding however that cost pressures are mounting.

US industrial production also rebounded by 0.2% in November, following a 0.9% fall the previous month (revised from an initial estimate of -0.6%), driven in particular by a 7.1% rise in the automotive sector.

Excluding this strong increase, which reflects the end of strike action in this sector, manufacturing output itself contracted by 0.2% month-on-month, according to the Federal Reserve, which publishes these figures.

The capacity utilization rate in US industry improved by 0.1 percentage points to 78.8% in November, a level 0.9 points below its long-term average (1972-2022).

Confirmation of the rebound in oil prices should be the other driving force behind the day's advance.

With a 0.5% gain to $72 a barrel, US light crude (WTI) is heading for its first week of gains after six consecutive weeks of decline, which should support energy-related stocks, with Brent stabilizing at around $77.6 in London.

After declining over the last few days, the greenback rallied +0.8% against the euro, back to 1.0905, in response to macroeconomic indicators which, in the eyes of investors, reinforce the prospect of an ECB rate cut.

Investors' attraction to equity markets has not dampened their appetite for US Treasury bonds, whose 10-year yield is down a further -3pts to 3.900%.

The easing is even greater in Europe, with Bunds at 2.02% (-8pts) and OATs at 2.555% (-10pts), a dizzying weekly decline of -28pts, and Italian BTPs erasing a further -8.5pts to 3.725%, or -33pts weekly.

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