CAC 40: economic indicators will set the tone

( – The Paris Stock Exchange should open higher on Monday morning pending the publication, this week, of several indicators which will allow investors to better find their way around the markets.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – February delivery – advanced by 28.5 points to 7681 points, suggesting a continuation of last week’s favorable movement.

Buoyed by the well-received results of luxury giants Hermès and Kering, the Parisian index rose 0.7% last week to get closer to its historic highs established the previous week.

On Wall Street, the S&P 500, for its part, managed to achieve a 14th week of growth out of 15 and ended Friday’s session comfortably above the major psychological threshold of 5,000 points.

‘If it is true that the figure of 5000 points remains quite artificial and that it only constitutes a psychological barrier which monopolizes attention, it testifies to the strength and resilience of the market in the face of an adjustment in interest rates. interest of historic magnitude’, underlines Angelo Kourkafas, strategist at Edward Jones.

Since January 1, the S&P 500 has already increased by 5.4% after gaining more than 22% last year.

Investors are counting on the series of economic indicators expected in the coming days in order to maintain the upward momentum in place since the start of the year.

The markets hope to move forward thanks to statistics as investors like them: reassuring about the state of the economy, but not sufficiently vigorous to justify a postponement of rate cuts.

The strength of the American economy has surprised in recent weeks, particularly in terms of employment, which tends to suggest that growth remains solid across the Atlantic despite fears of a coming recession.

The resilience of activity has so far eclipsed the tensions on the bond compartment, with a yield on ten-year Treasuris peaking at nearly 4.19%, the highest since the start of the year.

In Europe, activity seems to have stalled since the summer, which seems to justify the discount in terms of valuation displayed by the shares of the Old Continent compared to their American counterparts.

The market will take note tomorrow of the consumer price index in the United States, which should have slowed down in January, thus confirming the prospect of an upcoming monetary easing.

Other important indicators will follow, such as import prices and retail sales on Thursday, before Michigan consumer confidence on Friday.

On the other hand, better-than-expected indicators could dampen enthusiasm for stocks, lest it prompt the Federal Reserve to delay future rate cuts.

Several Fed officials have recently pushed back the horizon of easing rates, with perhaps no more than two to three rate cuts envisaged for 2024, given the singularly robust growth.

The other hoped-for catalyst could come from companies, with the fourth quarter results publication season expected to continue in the coming days.

Although announcements should be made fewer in the United States, several leading groups such as Coca-Cola, Kraft Heinz, Cisco and Applied Materials have planned to reveal their accounts this week.

On the contrary, the pace will accelerate in Europe, and particularly in France where publications from EssilorLuxottica, CapGemini, Airbus, Schneider Electric, Safran, Stellantis, Pernod Ricard, Orange, Stellantis and Renault are expected in the coming days.

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