Major U.S. stock indexes finished the week higher, rebounding from a sharp sell-off at the end of the prior week. Value stocks outperformed growth shares by the widest weekly margin since September, driven in part by outperformance in the energy sector amid higher oil prices and some profit-taking in large-cap tech stocks. The financials sector also posted strong weekly gains, aided by some earnings upside surprises. On the macro side, year-over-year US core inflation (less food and energy) slowed in December to 3.2% versus 3.3% in November and lower than expected. This number provides optimism that the Fed is still making progress on bringing down inflation following several months of elevated readings, which keeps the door open for potential rate cuts later in the year. Stocks advanced following the release while U.S. Treasuries yields decreased across most maturities. The dollar ended the week lower but bounced back to end just above pre-payrolls levels. Gold rallied for the third straight week back up near record highs while oil prices ended the week higher. Bitcoin topped $105,000 for the first time in a month on hope that Trump will announce a Strategic Bitcoin Reserve on Day One. The pan-European STOXX Europe 600 Index ended the week 2.37% higher as slower-than-expected inflation on both sides of the Atlantic raised hopes that central banks can keep cutting interest rates this year. Chinese equities rose as the economy improved despite persistent deflationary pressures.
Have a great week-end
Charles for the team