(CercleFinance.com) – The Paris Stock Exchange should move upwards on Friday at the opening while awaiting the start of the results season in the United States, which begins today while the markets are experiencing a complicated start to the year.
Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – delivery at the end of January – increased by 64 points to 7456 points, suggesting an opening in the green.
Investors should, however, refrain from taking too many risks in the face of current geopolitical turmoil, and as the quarterly results season is due to start today.
While the higher than expected inflation figures published yesterday in the United States did not provoke much reaction, the markets will rely on company results to try to get back on track.
Since January 1, the CAC 40 index has fallen by more than 2%. The start of the 2024 financial year has not been much brighter on Wall Street, where the Nasdaq has so far lost 0.3% this year.
The American banking groups JPMorgan Chase, Wells Fargo, Bank of America and Citigroup will be the first components of the S&P 500 index to publish their quarterly results at lunchtime.
In total, profits of S&P companies should have increased by 1.3% year-on-year in the fourth quarter, according to estimates collected by FactSet.
For financial services, results are expected to fall by 21% over the last three months of the year, in particular due to the recent halt in the rise in interest rates.
The results which will be revealed over the coming weeks will above all make it possible to know whether it is appropriate to revise the forecasts established for 2024 and possibly review the valuations of listed companies.
‘A moment of pause is probably necessary, in order to take stock of the valuations reached recently,’ says Florian Ielpo, analyst at Lombard Odier Investment Managers.
‘Our risk appetite indicator currently concludes that there is a period of declining appetite for risk-taking,’ underlines the professional.
After its recent records, the S&P 500 index trades at 19.2 times its expected earnings, compared to a ten-year average of 17.6, according to FactSet data.
In addition to the first company publications, a certain number of macroeconomic indicators are on the agenda this Friday, including industrial production prices for the month of December in the United States.
On the energy market, oil prices remain on an upward trend, still supported by tensions in the Red Sea, while the United States and the United Kingdom carried out overnight strikes against the installations of the Houthi rebels in Yemen.
The price of a barrel of Brent from the North Sea thus climbs 2.2% to 79.1 dollars while its American equivalent, a barrel of West Texas Intermediate (WTI), rises 2.4% to 73.7 dollars, which should carry the values linked to energy.
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