Investor response to Iran’s attacks last week was not expected and as usual demand for safe haven assets soared and risk appetite almost disappeared, leading S&P500 futures to fall by around 1.7% in January less than two hours, while Gold, Yen and oil rose significantly. But as soon as the first news of the absence of victims from the attacks began to emerge, and then with Trump’s Twitter statements about being “all right” without aggravating the confrontational rhetoric, the feeling turned almost as quickly as it had fallen. Only the movements in the various assets were reversed in their entirety as there was room for Wall Street to have reached new historical highs that day, which paints well the scenario of the strength that the Bulls show at this stage, especially in the technology sector.
On Friday more from a consolidation rather than a correction perspective, indices on both sides of the Atlantic depreciated slightly after data from non-farm payrolls, which were nevertheless worse than expected and less robust than those of the last month, they were not bad enough to question the strength of the labour market, with the 145,000 jobs created in December. And so, investors start the week prepared to give the upward movement a little more gas, especially if the first phase of the US-China trade deal is actually signed on Wednesday and if earnings start to come out of the earnings season. Without rising to major concerns, which should not be difficult given that the outlook has not been optimistic as usual and as such should be dashed and even the expected contraction in earnings for the fourth quarter of 2019 could lead to growth.
