January concluded positively for the stock market, with the CAC40 index rising nearly 4% to around 7,720 points. Strong performances from Stellantis and Teleperformance boosted gains, while US indices showed modest increases. Global economic indicators reflected optimism, with significant rises in the Dow Jones and Nasdaq. The luxury sector thrived, aided by encouraging news and lower inflation expectations. Meanwhile, oil prices stabilized, and various corporate developments unfolded, including Renault’s new joint venture.
Market Performance Overview
The stock market has wrapped up January on a high note, with the CAC40 index climbing nearly 4%, now hovering around 7,720 points! This ‘3 witches’ session saw the CAC40 soaring by an impressive 1.2% after a robust jump of 2.1% the previous day, largely fueled by strong performances from Stellantis and Teleperformance, which rose by 4% and 2.5% respectively. As January concludes this Friday, it boasts an impressive overall gain of 6%, particularly noteworthy compared to the modest 1% rise in US indices, which saw the S&P500 stagnate at zero as of Thursday evening.
Global Economic Indicators
On Wall Street, the ‘3 witches’ session is met with positive gains: the Dow Jones is up by 0.8%, the Nasdaq has climbed 1.4%, and the S&P500 approaches the significant 6,000-point mark. Meanwhile, the DAX40 and FT100 have reached historical peaks of nearly 21,000 and 8,500 points, respectively, despite challenging market conditions. Speculative assets have seen a significant surge, particularly cryptocurrencies, with Bitcoin soaring to $104,500, a notable increase from $90,000 at the week’s start.
Recent gains are attributed to a robust luxury sector performance, bolstered by encouraging news from Richemont and lower-than-expected consumer price indices in the US for December. This has solidified anticipations for potential rate cuts from the Federal Reserve. Additionally, the CAC40 is benefiting from the current political stability provided by the Bayrou government, which has alleviated fears of renewed political turmoil.
On the macroeconomic front, the US Federal Reserve reported a 0.9% rise in industrial production for December, exceeding expectations, following a modest gain of 0.1% in November. This increase was particularly influenced by the recovery of production in the aerospace sector after a significant strike at Boeing. Furthermore, the Fed noted an improvement in the capacity utilization rate, now at 77.6%, though it remains below the long-term average.
Housing market statistics reveal a significant 15.8% rise in housing starts in December, reaching 1,499,000 on an annualized basis, although housing permits saw a slight decline of 0.7%. As investors await the final consumer price figures for December in the eurozone, Eurostat’s preliminary estimate indicates a rise in inflation from 2.2% to 2.4%, primarily due to fluctuations in energy prices.
In corporate news, the American oil services firm SLB (Schlumberger) is set to release crucial results midday. Meanwhile, market participants may choose to adopt a cautious approach ahead of Donald Trump’s impending inauguration as the 47th president of the United States, scheduled for Monday. Although many initially welcomed his promises of tax reforms and deregulation, investors seem to prefer a wait-and-see strategy regarding the administration’s next moves.
In the realm of government bonds, the US ten-year yield holds steady at around 4.595%, down 20 points for the week, as it retreats from its earlier peak above 4.80%. Meanwhile, German bond yields have eased slightly, and French OATs have also shown a decrease, narrowing the yield gap between the two countries to 80.5 basis points.
Oil prices continue to hover near last summer’s highs, with Brent crude remaining stable around $81 per barrel, while the euro trades at approximately $1.0300 against the dollar. In the corporate landscape, Renault Group has announced a joint venture with NW, a leader in electricity storage, as part of its new mobility brand, Mobilize. Additionally, Crédit Agricole Personal Finance is expanding its stake in Sline, while Quadient has secured a partnership with a significant American provider of integrated cloud solutions.