A deluge of absolute records for a solid-gold "3 Witches" session... just like the previous one, which crowned seven weeks of consecutive gains with a series of annual (but not yet absolute) records.

The S&P 500 shattered the previous record of 4,800 with a gain of 1.23% to 4,840 points... but this performance almost pales in comparison with the +1.95% of the Nasdaq-100, which exploded above 17,000 to 17.314, in the wake of the SOX (semiconductor index), which broke its all-time record of 580 (dated 12/27/2023) with a supersonic bang: +4 points at 601, with the opening of a second consecutive gap (for the first time since 11/01/2023, but that was for cheap buybacks after a -10% correction).

A bullish spiral worthy of the dot.coms is getting out of control on a number of "hot issues", such as Nvidia (+4.2% to $595). The stock has posted +23% since January 1, for a capitalization of nearly $1,500 billion (+$200 billion), i.e. more than 25 times the expected sales of $58 billion by the end of 2024 (and 100 times earnings).

Nvidia is now being followed by AMD: +7.1% this Friday and +18.5% since January 1... which is paying 'only' 10 times its estimated sales for 2024 and 40 times its earnings.

Broadcom also soared by +5.9%, Applied Materials by +4.8%... and Microsoft (+1.2% this Friday and +6% since January 1) confirms its position as the world's leading capitalization at $2,965 billion (for a PER of 33) ahead of Apple (+1.5% $2.962 billion), which has lost 0.5% this year.

And these record highs -surfing on the 'A.I.' theme- are set against a backdrop that is quite out of the ordinary -and certainly exceptional- since the week is ending with a sharp rise in rates across the Atlantic -across the entire curve- following the spectacular reversal in expectations of monetary loosening favoured by investors since the end of November.

Even going back decades, it's hard to identify historical records coinciding with yield rises of 25 to 27 basis points in 72 or 96 hours... and even harder when the horizon for a rate cut suddenly moves back several weeks.

The tension of the last 48 hours is reinforced by the +9 point jump in Michigan's confidence index to 78.8 this month, the highest since July 2021, while economists were forecasting a much less pronounced rise to around 70.
The survey component measuring consumers' judgment of the current situation rose to 83.3 from 73.3 the previous month, while that measuring their expectations came in at 75.9, after 67.4 in December.

How could the Fed justify cutting its key rates after a figure so close to euphoria (the Michigan index is now only 7% off its all-time high reached in 1978), and which backs up a strong rise in retail sales (+0.6% in December) and weekly unemployment back to its lowest level in 50 years?... synonymous with full employment and persistent wage pressure...

The US 10-year T-Bond deteriorated to 4.17% before easing back to 4.14%... but this did not prevent it from achieving its worst weekly performance since mid-October 2023, while the 2-year deteriorated by +2 basis points to 4.37%, i.e. 25 basis points over the past week.

Lastly, the 'VIX' fell by -6% to 13.3, whereas 48 hours earlier it had validated a warning signal by rising to 14.8, its worst score since peaking between November 9 and 14. A "trap" signal that catches the most cautious off-guard... and provokes a kind of "FOMO" (a wave of impulsive buy-backs "at any price").

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