published on 02/08/2021 at 10:30 p.m.
Photo credit © Reuters
(Boursier.com) – The American stock market set new records on Monday, with investors betting on an economic recovery this year thanks to the progress of the vaccination campaigns against the Covid-19, the support of central banks, and in the opting for the adoption of a new support plan for the United States. The earnings season continues actively with around 77 S&P 500 companies expected this week, including three members of the Dow Jones, Cisco Systems mardi, Coke wednesday and Walt disney Thursday. Oil Brent on Monday crossed $ 60 a barrel for the first time in over a year.
At the close, the three main US indices signed new all-time highs. The index Dow Jones gained 0.76% to 31,385 points, while the broad index S&P 500 climbed 0.74% to 3,915 pts, and the Nasdaq Composite, rich in technological and biotech stocks, rose 0.95% to 13,987 pts.
Elsewhere in the world, financial markets also ended up, welcoming positive signs on the coronavirus pandemic front in countries where vaccination campaigns are most advanced. In Europe,EuroStoxx 50 gained 0.27% and the CAC 40 gained 0.47% in Paris. In Asia, the Nikkei jumped 2.1% and the Shanghai composite finished up 1%.
On Wall Street, ten of the 11 sector indices of the S&P 500 ended in the green on Monday, starting with energy (+ 4.1%), basic materials (+ 0.8%), financials (+1 , 2%), industrial (+ 0.9%), technology (+ 1%) and communication services (+ 0.4%).
Oil companies have jumped in the wake of crude prices: Marathon Oil and Occidental Petroleum soared by about 13%. Otherwise, Tesla Motor rose 1.3%, as the California automaker surprised by saying it acquired as much as $ 1.5 billion worth of bitcoin in January. The news also sent bitcoin above $ 43,000 (+ 14%), a new record high.
8 in 10 US companies exceeded earnings expectations
Investors have so far been generally reassured by the results of companies in the 4th quarter of 2020, as well as by their forecasts. About 60% of the members of the S&P 500 have already published their accounts for the quarter ended at the end of December, and among these companies, the vast majority, around 80%, did better than analysts expected, both in terms of earnings and sales.
This week, investors will watch approximately 77 S&P 500 earnings announcements. Akamai, Cisco Systems, Coty, DuPont, Gartner, Yelp, Lift or Mattel, will be there on Tuesday. Under Armour, Altice USA, Western Union, Coke, Criteo, CME Group, Zynga or Uber Technologies, publish Wednesday. Borgwarner, Molson Coors, Duke Energy, Kraft Heinz, Walt disney (after closing), Kellogg, Expedia, Tyson Foods, PepsiCo and Verisign, announce Thursday. Friday will be a quieter day, with results from Moody’s, Dominion Energy, American Axle and Newell Brands.
Markets bet on rapid adoption of Biden plan
Equity markets are also finding a catalyst for the adoption of the 1.9 trillion dollar stimulus plan the Biden administration, seen as the engine of the reflation eagerly awaited by investors. Friday, the American president affirmed that he intended “to act quickly” to pass his plan of 1.900 billion $, while the elected Republican ones are dragging their feet in the Senate.
Joe Biden has given himself the means to dispense with a bipartisan agreement, by securing a Senate vote last week (controlled by the Democrats by 51 votes to 50) authorizing him to pass the plan by a simple majority and not two-thirds. So even if the president says he would prefer to reach a bipartisan agreement on his plan, he could also ignore it if the talks got bogged down.
Janet Yellen as reinforcement in the face of a failing job market
For her part, US Treasury Secretary Janet Yellen said on CNN on Sunday that if Congress approved the Biden plan, the United States should return to full employment next year. On the other hand, without a bailout “the unemployment rate will remain high for years to come”, she warned.
Friday, the employment figures in January were disappointing, with only 49,000 job creations and the figures for previous months were revised down sharply. In December, the American economy thus destroyed not by 140,000 as initially estimated, but 227,000 jobs …
“I’m afraid the job market is stagnatingMs. Yellen said in another interview with CBS commenting on the latest jobs report. “We have 10 million Americans who are out of work. Four million have left the labor market (…) We are in an abyss as regards the labor market, and (we are) still far from leaving it “”, she also warned.
In Europe, Christine Lagarde, the President of the ECB, said that the issuing body would maintain important stimulus measures but that governments should continue budget spending to protect an economy in difficulty by the health crisis.
Brent returns to $ 60 for the first time since January 2020
Oil prices continued their “rally”, at their highest for more than a year, still supported by hopes of recovery and by OPEC + ‘s voluntarism to control its production, and maintain a market in excess of demand in order to absorb global stocks and support prices.
The March Crude Oil Barrel Futures WTI again gained 2% to $ 57.97 on the Nymex, while the Brent April maturity advanced 2.1% to $ 60.56, crossing the $ 60 threshold for the first time since January 2020.
Oil prices have now gained over 17% (for Brent) and 19% (for WTI) since the start of the year.
L’or gained 1.2% to $ 1,834.20 an ounce for the April futures contract on Comex. The yellow metal had given up 2% last week, abandoned by investors again seduced by risk taking. Themoney maturity March gained 2.1% to $ 27.57 an ounce on Monday, after a very volatile week.
On the foreign exchange market, the dollar index is little changed at 90.96 points (-0.09%) against a basket of currencies, as is the euro which points to $ 1.2050 on Monday (+ 0.07%). Calm also reigns in the bond markets, where sovereign rates stabilized on Monday, the yield of the T-Bond a 10 ans evolving at 1.17% (+1 basis point), and that of Bund German 10-year ending at -0.45% (stable).
VALUES TO FOLLOW
The airline industry has seen a strong rebound after Democratic officials tabled a new $ 14 billion aid package, which would allow companies to continue paying the salaries of thousands of employees until the end of September 2021, according to information released Monday by ‘Reuters’. The project should be examined from Wednesday in committee. The action Delta Air Lines climbed 5%, whileUnited Airlines Holdings a pris 5,2%, Southwest Airlines a pris 4,3%, American Airlines advanced 3.3%, Jetblue Airways took 4.2% and Alaska Air Group jumped 5.3%. Listed funds US Global Jets (+2,8%), ETFMG Travel Tech (+ 3.2%) and the SPDR S&P Transportation (+ 2%) also gained ground.
Tesla (+ 1.3%). The Californian manufacturer of electric cars has just declared to the SEC, US financial policeman, the acquisition of Bitcoin for a particularly large aggregate amount of $ 1.5 billion in January 2021. Tesla specifies that it could acquire and hold assets periodically or over the long term. According to Bloomberg, the California manufacturer is even considering starting to accept bitcoin as a form of payment for its products in the near future, subject to applicable laws and initially on a limited basis. The company claims to have acquired Bitcoin “for more flexibility, in order to better diversify and maximize the investment of its cash.”
This information propelled Monday the bitcoin above $ 43,000 (+ 14% in 24 hours) while on Wall Street, the highly speculative listed “blockchain / crypto stocks” have climbed, like Marathon Patent Group (+ 42%) or Riot Blockchain (+40%).
AstraZeneca (+ 0.6%). South Africa has decided to no longer use the AstraZeneca vaccine, citing a study showing that it is not very effective against the variant which circulates mainly in this country. Other countries, however, have reaffirmed their confidence in this vaccine, which has been approved by health authorities in the United Kingdom, the European Union and the United States, where this South African variant is hardly present. In France, the Minister of Health Olivier Véran received on Monday a first injection of the AstraZeneca vaccine.
Driven by crude prices, oil stocks listed on Wall Street have soared, like Marathon Oil (+13%), Occidental Petroleum (12,8%), ExxonMobil (+4,3%), Chevron (+2,5%), Morgan children (+4,1%), Apache (+ 10%) or even Transocean (+ 3.7%). The listed fund SPDR Energy Select Sector jumped 4.2%.
Apple (+0,1%). Hyundai Motor fell 6.2% on the Seoul Stock Exchange on Monday, as the South Korean automaker said it was not in discussions with Apple over a potential autonomous vehicle. This clarification comes a month after the confirmation of preliminary talks with the American tech giant. Last week, the Hyundai title was boosted by the rumor of a major agreement with Apple on this coveted segment of the autonomous car. Recent rumors have revolved around a possible deal with Hyundai’s Kia subsidiary to assemble the Apple Car in the United States. So it would not be …
Hasbro (-4.2%), one of the American toy giants, announced for its fourth quarter accounts exceeding market expectations. Quarterly net income reached $ 105 million, or 76 cents per title, from $ 96 million a year earlier. Net income improved 4% to $ 1.72 billion, with a positive currency impact of $ 12 million. Revenue in North America increased 16%. Hasbro Gaming grew 21%, compared to a 20% increase in TV / Film / entertainment and a 7% increase in franchises. Operating profit was 186 million, while adjusted operating profit rose 51% to 261 million, or 15.2% of revenue. Adjusted net income was $ 175 million, or $ 1.27 per share.
Walt disney (+ 4.8%) is at an all-time high before its quarterly accounts. The American entertainment giant, which is currently enjoying the undeniable success of its Disney + subscription streaming video service, will publish its latest accounts after market on Thursday evening. The market consensus is currently 42 cents per share deficit for the quarter ended, for $ 15.91 billion in revenue. Over the fiscal year, the consensus is $ 1.51 bpa for more than 70 billion billings.
Cisco Systems (+ 1.8%) also announces its financial results this week, after market tomorrow. The quarterly consensus stands at 75 cents of adjusted earnings per share for $ 11.92 billion in revenue.
Pfizer (-0.3%) asked for the green light for the use in Brazil of the covid vaccine designed and developed in partnership with the German BioNTech (+1,6%).
Twitter (+ 2.5%). India has asked the social media network to shut down 1,178 sites it says are supported by Pakistan or administered by sympathizers of a Sikh separatist movement, according to two Indian government sources quoted by Reuters.
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