(CercleFinance.com) – The Paris Stock Exchange is expected to be little changed on Monday at the dawn of a week which is to be marked by a meeting of the American Federal Reserve, at a time when the results season is in full swing.
Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – delivery at the end of February – fell by 2.5 points to 7649.5 points, suggesting a stable opening or even a very slight decline.
Investors are bracing for another busy week with an avalanche of quarterly results in the technology sector, interspersed with leading indicators and decisions from the Fed.
The US central bank has made it clear that it plans to cut interest rates in 2024 and the question now is when, by how much and at what pace.
The Federal Reserve will communicate its decisions on Wednesday evening, before a press conference by its President Jerome Powell.
If no major announcement is expected, stakeholders will be on the lookout for indications concerning the evolution of its monetary policy, especially since recent economic figures have surprised by their strength.
‘Powell should leave the door open to the possibility of a rate cut in March, while avoiding increasing the likelihood of such a scenario at the moment,’ says Jim Reid, market analyst at Deutsche Bank.
According to the FedWatch tool, only 48.6% of traders now anticipate a rate cut in March, with 50.4% counting on a new ‘status quo’.
The week will also be marked by the publications of heavyweights Microsoft, Apple, Alphabet, Amazon and Meta, which will be particularly scrutinized as the Nasdaq moves at record levels.
Knowing that these five stocks represent more than 24% of the total weighting of the S&P 500 index, investors could start selling if the news was not good.
The week is shaping up to be one of the busiest of the US earnings season, with a total of 106 S&P components due to present their fourth quarter accounts.
Of the companies that have already published, 69% of them posted profits higher than analysts’ expectations, compared to an average of 77% over the last five years.
Investors should also exercise some caution at the start of a week full of indicators, in the United States and in Europe.
As such, the most anticipated data will certainly be the report on American employment for the month of January, which will shed light on the evolution of the labor market, closely monitored by the Fed.
But euro zone GDP figures for the fourth quarter on Tuesday, then consumer prices in the region, due on Thursday, will also be closely watched.
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