2024-01-22 09:45:31
Will or will not lower its rates in March? Speculation is always rife between the speeches of some and the anticipations of others. Last week, the Fed brought its hawks out of the woods, just like the ECB during the World Economic Forum in Davos, to calm the fervor of the fierce supporters of a rapid reduction in key rates. If fixed income investors seem to have taken their share, the stock market prefers to focus on the good news related to AI. Before being overtaken by reality?
In the absence of comprehensive economic statistics, investors have mainly focused on company results and for once, they prefer to see the glass half full rather than half empty. Despite a certain reminder from the main central bankers on the future trajectory of key rates, the stock market, especially the American one, is doing well, like the S&P 500 which is recording new historic highs.
However, the message expressed by the rates should not be taken lightly. Last week, we told you that the overflow of 4.07% on the American 10-year bond would mark the end of the downward dynamic initiated since last October. However, this relaxation was precisely accompanied by a surge in the stock market. Deprived of this support, the latter will have to find other support (in addition to AI?) if it wants to continue its bullish rally. In the meantime, the next resistances to watch for on rates are respectively at 4.23/25% before 4.40/43%, the maximum being the 4.60% that we put forward during our central scenario for the year 2024.
Source Bloomberg
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