- The S&P 500 and Nasdaq 100 have reached historic highs driven by AI and hopes for geopolitical agreements.
- Systemic vulnerability persists due to inflation above 3% and excessive liquidity not absorbed by the Fed.
- The foreign exchange and commodities markets are affected by oil volatility and tensions in the Middle East.
The current financial landscape presents itself as a true puzzle. Recently, we have seen how the S&P 500 and Nasdaq 100 They have broken records again, setting historic highs that leave many analysts scratching their heads. This optimism is not isolated, as other indices such as the Nikkei 225 or IBEX 35 Total Return They have also joined this party of record highs, demonstrating that the appetite for equities has returned strongly even though the atmosphere remains quite tense.
Looking at the headlines, the reasons seem clear: stellar corporate balance sheets from the largest companies and the hope that an agreement will be signed. Middle East peace agreementIn fact, Donald Trump's announcement regarding the suspension of assistance to ships in the Strait of Hormuz has fueled the idea that a deal with Iran could be imminent, injecting a dose of confidence into the stock markets. Furthermore, investors are anticipating that the potential arrival of Kevin Warsh to the Fed signify the definitive end of any interest rate hikes.
The hidden risk behind the euphoria
However, it's not all rosy, and some view these numbers with considerable skepticism. It's certainly curious that the stock market is soaring when we still have a annual inflation exceeding 3%Although there is talk of quick truces in the geopolitical conflict, the reality is that the scars on the oil supply chain They don't disappear overnight and will take months to stabilize.
There is a real fear that we are facing growth based more on euphoria over artificial intelligence than on solid foundations. When assets rise at such a dizzying speed without real backing, the risk is that the house of cards will collapse, causing vertical falls in a matter of hours or even minutes. It's a dangerous scenario where blind optimism often takes its toll.
There are more than enough triggers for a collapse. On the one hand, any escalation of fighting in the Middle East could turn the tables. On the other, the Trump's unpredictability and his urgency to avoid a catastrophic electoral defeat could generate political chaos that ends up placing him in the dock of a impeachment trial initiated by the Democrats.
Liquidity and the role of the Federal Reserve
We cannot ignore the elephant in the room: liquidity. The market is inflated by an amount of dollars that the Fed never withdrew, a trend that has been ongoing for some time. This was especially evident in March 2020, when Jerome Powell's unlimited stimulus sent stocks soaring to record highs while companies were closed or half-assist because of the pandemic.
As for the foreign exchange market, the situation is different and more moderate. Here, the one who calls the shots is the... The pattern is repetitive: when there are threats between the United States and Iran, crude oil prices rise, And, as a consequence, the euro, the pound, and especially the yen suffer collapses. In this context, the It has established itself as the safest haven for cautious traders.
Gold, meanwhile, continues to struggle to find a clear direction. While some dreamers hope to see it reach $6.000, the reality is that many bought at $5.600 in January based on overly optimistic forecasts. Currently, the precious metal remains above that level. $4.640, regaining ground thanks to news related to Trump.
Monetary outlook and economic calendar
If we analyze European currencies, the euro and the pound show a moderate upward trendFor the euro to gain real momentum, it needs to break the 1.1765 barrier and head towards 1.1800, while the pound needs to surpass the level of to confirm its strength.
The Japanese yen has given us some scares, strengthening briefly in the Asian session in what looked like official intervention, but those gains evaporated in minutes, quickly returning to the area of This demonstrates that volatility remains the norm in the foreign exchange market.
Looking at the calendar, the first week of May has been fairly flat. ISM services and job vacancies They haven't moved the needle on the market. However, attention is now focused on the And, above all, in oil inventories, which remain the star asset and the engine of much of the current volatility.
The combination of record highs in US indices, unpredictable geopolitics, and massive residual liquidity creates an environment where the This is crucial. Even though the rebound has lasted three consecutive weeks, caution must prevail over euphoria to avoid being caught in a potential sharp price correction.
