Good morning, today is Wednesday, October 18th, and we begin as usual with an analysis of the stock markets. Yesterday, the American indices closed virtually unchanged: the S&P, Nasdaq, and Dow Jones showed minimal variations. Nasdaq was the only one to experience a slight loss of 1030 points. This morning, the major futures of the American stock markets are moving into slightly negative territory, with the Dow Jones down by 0.05%, Nasdaq by 0.27%, and the S&P by 0.18%. In Europe, the indices are slightly positive but relatively flat, while in Asia, the indices were mixed, with Shanghai closing in the red despite positive data on Chinese growth.
As for bonds, we saw an increase in yields yesterday, with the two-year rate reaching 5.20% and the ten-year Treasury at 4.85%. The euro/dollar remained stable this morning at around 1.7511-1.0583.
From a macroeconomic perspective, there is positive news with retail sales in the United States surprising to the upside, with a monthly growth of 0.7%, surpassing analyst expectations of 0.3%. American consumers continue to spend more than anticipated. In China, GDP data showed an annual growth of 4.9%, and data on consumer spending were positive, with a 5.5% annual growth and a 4.5% increase in production. These figures indicate that the Chinese economy appears to have recovered from the 2023 crisis.
Regarding corporate earnings, Goldman Sachs disappointed with a 33% decrease in annual profits, causing a 1% drop in shares. In contrast, Bank of America reported a 10% increase in annual profits and a 2.9% rise in revenues, leading to a 2.33% increase in share prices.
Today, data from SML, the leading European technology leader in semiconductors, were in line with expectations. However, the shares were penalized by forecasts for 2024, indicating a year of transition with no growth, resulting in a 5% drop in share prices.
The day will also see the release of data from Tesla and Netflix at market close. Overall, it appears that the prospect of a “soft landing” desired by the Federal Reserve is materializing, but conflicting data on retail sales could prompt the Fed to maintain a restrictive policy to curb inflation. The situation appears to have improved in 2023.
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