In fact, investors don't really care about early rate cuts, as long as the economy holds up. For two years now, they've been promised a hard future and a recession, but none of that has materialized.

On Friday, two sparks have set the market alight. First, TSMC, which announced higher-than-expected targets on January 18. The Taiwanese company, which is the world's leading chip producer, has awakened the market's appetite. In the same vein, US company Super Micro Computer raised its own forecasts, sending the stock up 36% over the session, pulling the whole sector along with it. Financiers believe that the increase in targets is a sign that the sector's other big players will not disappoint, starting with Nvidia, which also soared on Friday. Beware, however, of the super-bubble that could super-explode in the face of super-investors. The S&P500 semiconductor sector index gained 8.4% last week. That's three times more than the Nasdaq 100 (+2.9%). The S&P 500 reached an all-time high.

Meanwhile, European indices fell last week. BE Semiconductor and ASM International did gain over 10%, but the two biggest European players in semiconductors, STMicroelectronics (+2%) and Infineon (-0.2%), didn't shine nearly as brightly as their American peers. Probably because there are more about automotive chips than artificial intelligence chips. I'd like to take this opportunity to add that the automotive sector isn't exactly going great at the moment, with doubts about the transition to electric vehicles and the slowdown in new vehicle sales. All this to say that over the past week, the STOXX Europe 600 lost 1.6% and none of the main European indices closed in the green, even if the Dutch AEX and its semiconductor production machine heavyweights ASML and ASM International didn't come far from rising.

So that's the picture for the start of the week, with the Japanese market adding its sixth consecutive week in the green.

In the United States, Ron DeSantis quit the Republican primary campaign and endorsed Donald Trump. Will Nikki Haley also be throwing the towel this week?

Lots of corporate results this week, starting tomorrow, including Johnson & Johnson, Netflix, Tesla, ASML, SAP, Visa and LVMH.

The macro agenda includes rate decisions by the Bank of Japan (Tuesday) and the European Central Bank (Thursday), a salvo of PMI indicators (Wednesday) and US PCE inflation (Friday).

In the Asia-Pacific region this morning, trends are mixed. Japan continues to rise, while China continues to slide (-2% for the Hang Seng). India and South Korea are down slightly, in stark contrast to the optimism prevailing in the US markets. Taiwan and Australia gained 0.7%. European leading indicators are bullish and futures on Wall Street are in the green.

Today's economic highlights:

The dollar is flat at EUR 0.9179 and GBP 0.7872. The ounce of gold is stable at USD 2021. Oil is little changed, with North Sea Brent at USD 78.23 a barrel and US light crude WTI at USD 73.26 The yield on 10-year US debt falls to 4.11%. Bitcoin falls to USD 40,600.

In corporate news:

  • Macy’s on Sunday rejected a $5.8 billion takeover offer from a consortium of investors including Arkhouse Management and its partner Brigade Capital Management, citing concerns over the financing and valuation of the deal.
  • Boeing - The U.S. Federal Aviation Administration (FAA) recommended on Sunday that Boeing 737-900ER operators visually inspect the exit doors to ensure that the component is properly secured. The stock was down 1.8% before the opening.
  • Occidental - The US Federal Trade Commission has requested additional information and documents from the group and Crownrock relating to their pending merger, the two companies said on Monday.
  • Meta Platforms - Instagram and Facebook users in Europe will be offered more choice over how they use Meta Platforms' services in order to comply with the European Digital Markets Act, the social media company said Monday.
  • Choice Hotels International continued its $8 billion hostile bid for Wyndham Hotels & Resorts on Monday, naming a slate of directors to replace the eight members of Wyndham's board, according to people familiar with the matter.
  • Microsoft said on Friday that it had detected a cyber incident in late November on January 12 and was investigating the extent of the incident.
  • JetBlue Airways and Spirit Airlines announced on Friday that they would appeal a judge's decision this week to block the planned merger of the two airlines.
  • Archer-Daniels-Midland fell 8.5% after putting its CFO on administrative leave, effective immediately.
  • Exxon Mobil filed a complaint with a Texas court on Sunday to prevent a climate proposal by activist investors from being put to the vote at the company's general meeting in May.
  • SolarEdge Technologies said on Sunday that it would lay off around 16% of its global workforce, some 900 employees.

Analyst recommendations:

  • Advanced Micro Devices: Haitong International Research Ltd maintains a neutral recommendation with a price target raised from USD 112 to USD 145.
  • Admiral Group: Mediobanca downgrades to underperform from neutral with a price target raised from GBX 2415 to GBX 2549.
  • Applied Materials: Berenberg maintains its buy recommendation and raises the target price from USD 175 to USD 215.
  • Archer-Daniels-Midland: Baird downgrades to neutral from outperform with a price target reduced from USD 96 to USD 61.
  • Atlassian Corporation: Citigroup maintains its buy recommendation with a price target raised from USD 215 to USD 280.
  • Aviva: Mediobanca upgrades to outperform from neutral with a target price raised from GBX 494 to GBX 549.
  • Cae: Scotiabank downgrades to sector perform from sector outperform with a price target reduced from CAD 36.50 to CAD 31.
  • Cenovus Energy: Jefferies maintains its buy recommendation and reduces the target price from CAD 34 to CAD 27.
  • Cloudflare: Citigroup remains neutral recommendation with a price target raised from USD 66 to USD 82.
  • Dr Horton: Seaport Global downgrades to neutral from buy.
  • Fifth Third Bancorp: D.A. Davidson maintains a neutral recommendation with a price target raised from USD 29 to USD 37.
  • Ibm: Stifel maintains its buy recommendation and raises the target price from USD 144 to USD 183.
  • International Flavors & Fragrances: Morgan Stanley upgrades to overwt from equalwt with a price target raised from USD 81 to USD 90.
  • Kla Corporation: Berenberg maintains its buy recommendation and raises the target price from USD 540 to USD 670.
  • Lowe's Companies: Oppenheimer downgrades to market perform from outperform with a price target reduced from USD 275 to USD 230.
  • Lululemon Athletica: HSBC downgrades to hold from buy with a target price of USD 500.
  • M&G: Mediobanca downgrades to neutral from outperform with a price target raised from GBX 254 to GBX 255.
  • Micron Technology: Cathay Securities Corp., Taipei maintains a buy recommendation with a price target raised from USD 80 to USD 100.
  • Norfolk Southern: Bernstein upgrades to outperform from market perform and raises the target price from USD 230 to USD 272.
  • Pultegroup: Seaport Global maintains its buy recommendation and raises the target price from USD 97 to USD 117.
  • Regions Financial Corporation: D.A. Davidson maintains its buy recommendation and raises the target price from USD 19 to USD 23.
  • Sage Group: Barclays downgrades to underweight from equalweight with a price target reduced from GBP 10.50 to GBP 9.85.
  • Segro: Citi upgrades to buy from neutral with a price target raised from GBP 7.74 to GBP 10.69.
  • Servicenow: JMP Securities maintains its market outperform recommendation and raises the target price from USD 665 to USD 825.
  • Tfi International: Scotiabank upgrades to sector outperform from sector perform with a price target raised from CAD 180 to CAD 215.
  • The Home Depot: Oppenheimer downgrades to market perform from outperform with a price target reduced from USD 360 to USD 345.
  • Union Pacific: Bernstein upgrades to outperform from market perform with a price target raised from USD 229 to USD 280.
  • Western Digital: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 52 to USD 73.