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Fantastic Day

Yesterday was a fantastic day for rebounds (NY up +2%) as US core inflation came in lower than anticipated (+3.2% vs +3.3% expected and previous). The overall inflation rate rose by the estimated 2 tenths, reaching +2.9%, and US banks exceeded expectations (JPMorgan EPS $4.81 vs $4.12; Wells Fargo $1.43 vs $1.33; Goldman $11.95 vs $8.26). This allowed for a small reduction in bond yields for the first time in a while, creating space for stocks to rebound with considerable enthusiasm.

TODAY
We have a bullish outlook for TODAY, starting with 3 positive news items:

TSMC reported results that beat expectations and provided positive guidance for 1Q 2025 this morning.
Richemont's quarterly sales were unexpectedly strong (+10% vs +0.9% expected).
Although it’s early to draw conclusions about US 4Q 2024 results, with 28 companies reporting, the average EPS is already surpassing expectations (+7.8% vs +7.5% expected).
TODAY, we have 2 key indicators to watch:

US Retail Sales at 2:30 PM: +0.6% expected vs +0.7% previous. If they disappoint, it could benefit Wall St; conversely, if they exceed expectations, it may not be as favorable. Intuitively, the latter scenario appears more likely.
Additional US 4Q 2024 results:
12:45 PM: BoA ($0.77; +120.0%)
1:30 PM: M.Stanley ($1.72; +102.3%)
Pre-market NY: UnitedHealth ($6.70; +8.8%)
Tomorrow at 1:00 PM: Schlumberger ($0.90; +4.8%)
All figures appear strong, especially those from the banks.

PRACTICAL CONCLUSION
The upward momentum is likely to persist due to the positive flow of corporate earnings and the slightly decreasing bond yields. The risk lies in US Retail Sales potentially exceeding expectations, which isn’t out of the question. However, that would likely slow the rebounds rather than reverse them into declines. The positive sentiment should last for a few more hours, but it’s probable that we’ll see some non-aggressive profit-taking on Friday.

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