Major US stocks indexes declined during the week, although the S&P 500 Index held up best, falling just 0.2%. Stocks opened sharply lower to start the week in response to the prior Friday’s announcement from Trump stating that the U.S. would be implementing 25% tariffs on imports from Mexico and Canada, along with 10% levies on Chinese imports, as of February 1. However, by the end of Monday, Trump had agreed to postpone tariffs on Mexico and Canada for 30 days, which helped stocks recover some of their early losses by the end of the week. Earnings season was another notable driver of sentiment; according to data from FactSet, 77% of S&P 500 Index companies that have reported Q4 results have posted consensus-topping earnings, with an average growth rate of 16.4% (compared with estimates for 11.9% earnings growth). Of the companies that have reported thus far, 63% have also surpassed sales expectations. On the US macro side, Manufacturing activity expanded for the 1st time in 27 months while the labor market shows signs of gradual cooling. The softer-than-expected employment data seemed to help drive positive returns for U.S. Treasuries as yields across most maturities decreased. The pan-European STOXX Europe 600 Index ended 0.60% higher while Hong Kong Hang Seng Index advanced 4.5%, its best weekly performance in four months, driven by gains in technology companies. Gold surged up to yet another record high while crypto ended the week on the downside.
Have a great week-end
Charles for the team