Wall Street rallied nicely on Monday: it was very 'red' at the opening, with the 'VIX' soaring +13% to around 22... but in the end, the indices closed broadly directionless (the Dow Jones gained an unexpected 0.85%, the S&P500 gained 0.15% and the Nasdaq was down to -0.4% (from -1.5% around 3.45pm), while the VIX lost -15% to finish at -2% (what a way to regain control of volatility!).).

Nvidia weighed -2%, Apple lost -1% and Meta -1.2%, and shortly after the close, Abercromby & Fitch plunged -15% on the publication of its most disappointing quarter since 2022.

Wall Street seems to have lost interest in the continuing rise in interest rates: US '10-year' T-Bonds (+1.5Pt) peak this evening at 4.795%, while the '30-year' (+1Pt) oscillates between 4.9670 and 4.97%, a curse for the real estate sector.

Wall Street is gearing up for a decisive week marked by the publication of quarterly results by several US economic heavyweights, which will set the tone for the sessions to come.

The major US banks will be in the spotlight during this first week of the earnings season, with publications by Citi, Goldman Sachs, JPMorgan and Wells Fargo scheduled for Wednesday, followed by those of Bank of America and Morgan Stanley the next day.

Comments from these leading financial institutions will provide investors with interesting reading on the current state of the economy, consumer spending and the economic outlook in the USA.

According to FactSet, US corporate profits in the S&P 500 index are expected to have risen by an average of 11.7% year-on-year in Q4, their biggest increase since the end of 2021... but this average masks colossal disparities, with 70% of profits concentrated on a dozen companies, and 75% on the top 20, while most of the companies in the 'S&P480' (the S&P500 minus the 20 titans of the stock market with over $500 billion in 'capi') will post 'on average' declining results over 12 months.

As we saw last Friday with the solid US employment figures, good statistics are no longer enough to push the market higher, as they are synonymous with less monetary easing.

The results "season" will therefore determine whether the New York Stock Exchange can regain upward momentum, given that the S&P 500 is currently trading at 21.5 times earnings, well above its ten-year historical average (18.2)... and the Nasdaq-100's PE stands at 47.5 (+59% in 1 year), i.e. twice above its historical average of 23.6, and just 1.5 points from the absolute record.
The reopening of the earnings season will not, however, completely overshadow what is currently at stake on the other side of the Atlantic, between uncertainties over Donald Trump's future policies, the reawakening of inflation and tensions over bond yields.

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