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 climbed 0.15% and the Nasdaq limited its losses to -0.4% (versus -1.5% around 3.45pm), while the VIX lost -15% to finish at nearly -2% (what a way to regain control of volatility!).).

Nvidia weighed in with -2%, Apple lost -1%, Meta -1.2% and shortly after the close, Abercrombie & 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: 10-year US T-Bonds (+1.5 basis points) peak this evening at 4.795%, while 30-year bonds (+1 bp) are fluctuating between 4.967 and 4.970%, a curse for the real estate sector.

The US markets are gearing up for a decisive week marked by the publication of quarterly results from several of the US economy's heavyweights, which will set the tone for the sessions to come.

The major US banks will be in the spotlight in this first week of the earnings season, with publications from Citi, Goldman Sachs, JP Morgan 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 S&P 500 corporate earnings 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.

With the S&P500 now trading at 21.5 times earnings, well above its ten-year historical average (18.2)... and the Nasdaq-100's PE at 47.5 (+59% in one year), twice its historical average of 23.6, and just 1.5 points shy of the all-time record, the earnings season will tell us whether the New York Stock Exchange can regain upward momentum.

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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