Market: record high for the 'Dow' despite record high rates and $.

(CercleFinance.com) - It had been a fortnight since Wall Street had posted a new record close: this was the case this evening for the Dow Jones, with a +0.
96% gain and a closing high of 44,296pts.

It all came down to the last minute, as the 'Dow' beat its previous record of November 11 by +3 index points (or 0.001%).

The 'S&P' gained +0.35% to 5,969.969, but this enabled the index to finish the week at its highest level, and 0.5% off its all-time best close.

The Nasdaq advanced by just +0.16%, held back by Nvidia, which dropped -3.4%, Palo-Alto -3.6% and intuit -5.6%.

Note Tesla's +3.8% rise (while Bitcoin is close to the symbolic $100,000 mark (at $99,350), i.e. +43% since Trump's election.

Datadog (+7.7%) and Zoom (+5.8%) were the biggest gainers.

Wall Street's rise was not assured this Friday, as the $ gained as much as +1% during the session and returned to levels not seen for 2 years, with rates continuing to rise over the past week (the 'risk premium' is increasingly negative on S&P equities compared to bonds, with an average yield of 4.40% on the '2-year' and '10-year').

The past week has seen the performance differential widen a little more in Wall Street's favor: US indices have posted a comfortable gain of +1.5% on average, while the Euro-Stox50 has stagnated at 4,790 after breaking through the 4.740 support on several occasions over the past week.

One of the 'facts of the day' was the -0.75% fall in the euro to $1.0400 (and even 1.0335 during the session), which marked the breaking of the October 3, 2023 support level of 1.0465 and its return to its lowest level since November 30, 2022.

The dollar was strengthened by the afternoon publication of 2 US indices, which were the opposite of those published in Europe.

US private sector growth accelerated in November, according to the S&P Global composite PMI, which came in at 55.3 in flash estimate, a 31-month high, after 54.1 in final estimate for the previous month.

Business production expectations for the coming year are at their highest level since May 2022, buoyed by the prospect of lower interest rates, improved economic growth and a more pro-business administration.

On the downside, US household sentiment improved in November, but by less than the initial estimate, according to the final results of the University of Michigan's monthly survey published on Friday.

The confidence index rose to 71.8, after 70.5 in October, whereas an initial estimate had put it at 73 two weeks ago, which economists were expecting to be confirmed.

On the bond front, T-Bonds are easing by -2.3pts to 4.412%, but the '2-year' is symmetrically tightening by +2.5pts to 4.375% (+7pts weekly), which means that the curve could invert again as early as Monday (a technical sign of recession).

Inflationary risks are increasing this week, as oil continues to climb towards $71.3 (+1.8% and +7% weekly), against a backdrop of geopolitical uncertainties, despite questions about global growth.

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