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Wall Street: stable to bearish, despite falling rates -10Pts

( - Wall Street closes without direction, with the S&P500 giving up a tiny -0.
06% while the Nasdaq Composite gains +0.36%.

On average, this leads to a slightly bullish bias on the broad indices, but this impression is cancelled out by the Dow Jones, which erodes -0.22%.

Note that the Dow Transport - often considered a good barometer of real activity - fell by -1.5%, a marked divergence from the other indices... and the Russell-2000, which had distinguished itself on the upside the previous day with +0.7%, lost all its gains with -1.38% at 1,865Pts.

Investors are therefore taking no initiative (the session was described as "not very active" at the final bell) 72 hours ahead of the eagerly-awaited monthly employment report (the "NFP" to be published on Friday)... at a time when investors are convinced that job creation will begin to reflect an economic slowdown which will confirm the FED's intention to 'pivot' and change its line of thinking, as a prelude to a possible rate cut as early as March 2024.

The day's US figures were fairly neutral: growth in the US service sector rose by more than expected in November, according to the monthly survey by the Institute for Supply Management (ISM).
The index stood at 52.7 last month, compared with 51.8 in October, while economists were expecting a figure of 52.3.

The employment component rose to 50.7, compared with 50.2 last month, while the new orders sub-index remained stable at 55.5.
The sentiment index for inventories rose to 62.2, after 54.4 in October, a level deemed far too high by the Institute for Supply Management.

With no real link to the above figures, the bond compartment experienced a wave of euphoria, with dizzying spreads (-10pts on the '10 yr' falling to 4.1600%, -9pts on the '5 yr' to 4.15%) reflecting panic buying by investors who may be 'on the wrong side'.

Indeed, many feel that -75pts on the '10-yr' in 5 weeks is going a bit too fast (too fast, too hard: the Fed's warnings are not being taken seriously enough).

Caution might have prevailed on the eve of the ADP private-sector employment survey, but buyers of Treasuries are convinced that hiring will begin to reflect an economic slowdown that will reinforce the FED's intention to 'pivot' and change its tune... a prelude to a possible rate cut as early as March 2024.

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