No one saw this 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 over the past two hours, the S&P500 and Nasdaq have fallen by 1.5%, the Russell-2000 by 1.9%, and the Dow Jones by just under 1.3%.

The S&P500 is undergoing its most severe correction since September 26, and 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 8:00 pm on December 20, the main US indices were trading in record territory, in the green for a 10th consecutive session: the S&P500 was flirting with its annual zenith (+0.1% at 4.774), as did the Nasdaq-100 (+0.2%), which set a new all-time record at 16,835... 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 soaring to +3%).

Wall Street welcomed the rebound in the Conference Board's consumer confidence index to 110 (the fall in inflation is reassuring), as well as the 0.8% rise in sales of existing homes in the USA last month compared with October.

The median selling 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 are "robust" figures, but they didn't affect the easing in long-term yields (-6 basis points on the 10-year to 3.90%, then -11 bp to 3.85% at 10:00 p.m.), pure Goldilocks: a more than resilient economy but yields that continue to ease.

Wall Street swears by the Fed's supposedly salvific action, despite all the "reservations" expressed about a consensus of six to eight rate cuts in 2024 (when the Fed is forecasting only three)... and UBS anticipates between 10 and 11 (justifying a further 10% rise in US indices over the next few months).

The mood is therefore one of hangover, except for Micron, which regained the 4.2% lost during the session after the close. The "technos" segment, which had gained 57% since January 1st around 6:00 pm, was dragged down by ON-Semiconductors -4.2%, Tesla -3.9%, Marvell -3.6%, AMD and Applied Materials -3.3%, Nvidia -3%.

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

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