QuiCQ 04/12/2024
Rien ne va plus!
"Comment voulez-vous gouverner un pays qui a deux cent quarante-six variétés de fromage ?"
— Charles de Gaulle
As today’s subtitle and quote of the day suggests, main focus of macro investors today will lay on France and its government confidence vote. Macron was optimistic yesterday that his government can survive. Poor lad.
Equities in the meantime continue their happy path higher, at least on the surface, with the S&P 500 hitting its 55th all-time high this year. A short glance under the hood reveals however that the equal-weight version of the same index has been down for a second consecutive day. Whilst not an outright warning sign of impending market weakness, it at a minimum indicates that the rally may be weakening again. This is not least witnessed in only 154 stocks up yesterday versus 347 down and only three out of eleven sectors printing green.
Oil is probably worth mentioning, which “thanks” to rising geopolitical tension (Syria/Lebanon/South Korea/fill in your favourite conflict here) got a two-and-a-half percent lift of its key support level:
Whispers around extension/expansion of oil production cuts just before the OPEC meeting may have added to upside prize pressures.
With oil up, it does not surprise us to see US yields a bit firmer too, with the Tens trading at 4.23% again after having hit a intraday-session low of 4.16%.
Staying with bond yields, the Swiss 10-year Conf yield hit a multi-year low yesterday below 0.20% (!), having dropped sharply since the break of support we had highlighted in one of our writings:
A lot of safe-haven buying going on here?
Currency markets had a second, less volatile session, with exception of the South Korean Won of course:
And finally, Bitcoin seems to have good support at $95,500 and may be poised for another 100k attempt soon.
With the French government facing a confidence vote today, and a lot of question marks arising concerning the long-term sustainability of the country’s finances, the OAT-Bund spread is trading at levels not seen since the European Sovereign Debt Crisis:
Let’s observe the reaction function of this spread after the outcome of today’s vote - whatever the outcome …
