Wall Street ends the week in highs with a rise close to 2%

With height and without fear. So he quotes one more day Wall street. The main indices of the New York Stock Exchange revalidate their historical highs for the fifth time in the year and end the week with increases close to 2%. The Dow Jones exceeds 29,348.10 points at the close, after picking up 0.17% compared to Thursday, and earning 2.8% so far this year. For its part, the S&P 500 rises 0.36% and stands at 3,328.14 units, while the Nasdaq 100 advances 053%, to 9,173.73 integers.

Total optimism in the markets this week. The exchanges on both sides of the Atlantic have advanced at their maximum, while oil, gold and bonds have stabilized. The definitive signature of trade agreement between the United States and China, the good data from the manufacturing industry in the Asian giant and the first business results on Wall Street they have given wings to the stock exchanges, after a dubious start of the year before the crossing of military attacks between the United States and Iran.

The VIX is close to 12 points, minimum that had not been visited since November and already accumulates a fall of 2.9% in 2020.

The debate for the investor is now between maintaining the position or reducing it if it has a high exposure to equities since, in any case, the increases are limited in the coming months. According to the BER (Profitability Expectations Barometer prepared by the Economist), almost one third of all expected profitability on the stock market in 2020 would have been achieved. Also in this line is the technical analysis.

The news that sponsored the purchases on the stock exchanges in the last session of the week was the announcement of some key macroeconomic data in China. The GDP growth in 2019 was 6.1% which, despite being the lowest rate of the last 30 years, has been sufficient to achieve the objective of the Government of the Asian giant. Likewise, industrial production, retail sales and investment in fixed assets exceeded expectations.

“The US indexes have been running for 16 consecutive weeks on the lows of the previous week,” said Joan Cabrero, director of Strategy for Ecotrader. That is why the question is inevitable: when will the trend change?

The expert says that there will be no special concern as long as the S&P 500 does not close a session under the 3,265 points or the Nasdaq 100 below 8,966 points. Although in the short term he believes that the transfer of the 3,289 and 9,035 integers, respectively, would be a “sign of buyer exhaustion.”

“So that we can talk about a relevant buyer exhaustion that less than demand that this bull series be broken, something that would give us reasons to reap benefits in the North American market,” defends the technical analyst.

'Brent' oil ends the week below 65 dollars

The reference crude futures in Europe are listed on the $ 64.9 per barrel towards the end of the day, which represents a 0.5% rise compared to Thursday, but a slight decline compared to last week. As far as exercise goes, the Brent loses about 1.6%.

For its part, the futures of West texas they reach $ 58.6 per barrel this Friday, although in the whole of the week they lose around 0.7% of their value. In the first days of the year, US crude accumulates losses of 4%.

“Oil drops for the second consecutive week according to the signs that the offer is abundant they compensate for the optimism that followed the signing of the trade agreement between China and the United States, “they report from Bloomberg.

The text of the agreement reflects Beijing's commitment to buy $ 52.4 billion in energy products Americans During the week that ended, it was announced that oil reserves in the United States at the Cushing, Oklahoma storage facility, which is used as a reference, increased for the first time in ten weeks.

The euro loses the level of $ 1.11 for the first time in the year

The European currency falls a slight 0.4% compared to Thursday, to the area of ​​the $ 1,109. In the whole of the week, the euro depreciates around 0.25% against the US banknote and 1.1% so far this year. It is the first time this year that the common currency loses the level of $ 1.11, something that had not happened since December 26.

On the other hand, the pound sterling is left with hardly any changes compared to last week, although it recedes 0.1%, until it falls to the level of 1,174 euros. So far this year, around 0.8% depreciates against the euro.

The next BoE meeting will be on January 30, the last one to be chaired by current Governor Mark Carney, and the last to be held before the United Kingdom formally leaves the European Union.

“Under Carney's mandate, the Bank of England has been mired in a problem of communication with the markets, generating expectations that it has not met, as happened in February 2018 when the market anticipated an imminent rise in interest rates before certain comments from the Monetary Policy Committee in that regard, “explains David Page, director of Macro Research & Core Investments at AXA Investment Managers.

The expert of AXA IM predicts “a growth of 1% by 2021 in the wake of recent international tensions”, something that could lead the Bank of England to impose “a rate cut between 0.25% and 0.50% in January”.

As for metals, gold rebounds 0.7% compared to Thursday, and remains practically flat compared to last Friday's close. The refuge reaches $ 1,560.7 per ounce and earn 2.5% in 2020.

A week of quarterly accounts

Investors have had a battery of references to take advantage of this week. On the economic level, the key event came on Wednesday, January 15, when the United States and China sealed Phase 1 of their trade agreement.

All analysts agree that Phase 2 negotiations will be much more complicated, but the market for now seems more than compliant.

Also, this week began the business results season. Morgan Stanley, JP Morgan Chase and Goldman Sachs have been some of the companies that have already been accountable and, with them, have caused different reactions in the market.

Among the firms that have behaved better in the stock market during the last seven days are Perrigo, which advances about 19%, and Morgan Stanley, which rises 10%. On the other end are Wells Fargo, which loses about 7%, and Bank of New York Mellon, which leaves around 9%.

The US companies intensify their presentation of results of the last quarter of 2019. Next week will be the turn of Netflix, Halliburton, IBM and United Airlines (Tuesday), Johnson & Johnson and Baker Hughes (Wednesday), Comcast, Intel and American Airlines (Thursday) and American Express (Friday).

In Europe, the presentations by Bankinter and STMicroelectronics (Thursday) and ASML (Wednesday) stand out.

Finally, it should be remembered that Wall Street will not open on Monday, January 20, For being a holiday in the United States in memory of human rights defender Martin Luther King Jr.

For readers who want more: Ecotrader, the investment strategy portal of elEconomista.es