Nobody saw this -1.5% correction in the US indices coming. There were no warning signs of such a wave of risk aversion (the VIX jumped +9% to 13.70)... but in the last 2 hours of the session, the S&P500 and Nasdaq fell by -1.5%, the Russell-2000 by -1.9% and the Dow Jones by just under 1.3%.

The S&P500 has suffered its worst correction since September 26, and is also the most brutal trend reversal below a peak since January 6, 2022.

The polarity reversal began mid-session with no obvious catalyst... other than the testing of major resistances, against a backdrop of "extreme complacency", which has become Wall Street's daily routine since the "4 Witches" session.

At 8pm on December 20, the main US indices were in record territory, in the green for a 10th consecutive session: the S&P500 was flirting with its annual zenith (+0.1% at 4.774Pts), as did the Nasdaq-100 (+0.2%), which set a new all-time record at 16,835Pts... and the Nasdaq Composite gained +0.3% in the wake of the "Fantastic 7", which were all in the green in the morning (with Alphabet's share price soaring +3%).

Wall Street welcomed the rebound in consumer confidence to 110 (vs. 103 expected, with the fall in inflation reassuring), as well as the +0.8% rise in sales of existing homes in the United States last month compared with October, to 3.82 million annualized and seasonally adjusted (SA), according to the National Association of Realtors (NAR).
The median sale price reached $387,600, up 4% year-on-year, and the stock of unsold existing homes fell by 1.7% month-on-month to 1.13 million at the end of November, or 3.5 months at the current rate of absorption.

These "robust" figures did not affect the easing in long-term yields (-6pts on the 10-year to 3.90%, then -11pts to 3.8500% at 10 p.m.): this was pure Goldilocks, with the economy more than resilient but yields continuing to ease: a veritable daydream.

Wall Street swears by the FED's supposedly salvific action, despite all the "caveats" expressed in the face of a consensus of 6 to 8 rate cuts in 2024 (when the FED is forecasting only 3)... and UBS anticipates between 10 and 11 (justifying a further 10% rise in US indices over the coming months).

Tonight, the mood is one of hangover, except for Micron, which regained after the close the 4.2% it had lost during the session.
The "technos" segment, which had gained 57% since January 1st around 6 p.m., was dragged down by ON-Semiconductors (-4.2%), Tesla (-3.9%), Marvell (-3.6%), AMD and Applied Materials (-3.3%), Nvidia (-3%) and

. The "Fantastic 7" were relatively unscathed: Apple and Microsoft held up rather well (-1% and -0.7%), Meta shed -0.3%, Alphabet even gained +1.2%.

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