CAC 40: towards a livelier session than yesterday

(CercleFinance.com) - The Paris Bourse is set to continue its upward trend on Tuesday morning in the wake of yesterday's new record highs on Wall Street, as the context remains favorable for equity markets.


At around 8.15am, the 'future' contract - October delivery - on the CAC 40 index gained 14.5 points at 7,619 points, heralding a continuation of the previous day's upward trajectory.

After stagnating below its equilibrium point for a long time, the Paris market managed to turn things around on Monday afternoon, finally climbing 0.3% towards 7602 points, to return just above the 7600-point threshold.

Today's session promises to be livelier than the previous day's, both in terms of corporate results and economic indicators.

Investors will be paying particular attention to the lunchtime publication of the accounts of American giants Bank of America, Citigroup and Johnson & Johnson.

A major salvo of earnings releases is expected this week
as 43 S&P 500 companies, including six from the Dow Jones, will publish their accounts, among them Netflix, American Express and Procter & Gamble.

Investors are expecting pleasant surprises in order to reassure themselves about the current high level of valuations, with the hope of revising upwards their earnings forecasts for major US companies.

In addition to the usual financial metrics, we'll be paying particular attention to announcements concerning share buybacks", explains Christopher Dembik, Investment Strategy Advisor at Pictet AM.

"In recent months, this has been a massive support for equities", recalls the analyst.

"This generally induces inflation in financial assets", explains the professional.

Christopher Dembik stresses that "structurally, everything points to a continued rise in global equities, particularly US equities".

Investors could also react to the publication of the New York Fed's Empire State index at 2:30 p.m.

In Europe too, the macroeconomic agenda looks set to be busy, with the ZEW index of German investor sentiment and eurozone industrial production figures due later this morning.

In New York, U.S. stock markets remain unstoppable, with last night's record-breaking performance confirming the bullish trend that has been underway since August 5.

The S&P 500 index regained more than 14% over the past two months, setting its 46th annual record on Monday evening.

The Nasdaq was not to be outdone, climbing 0.8% the previous day to come within 0.7% of its all-time high of July 10.

Nvidia's return to zenith status had a lot to do with this, as the manufacturer of AI processors yesterday saw its market capitalization rise to $3,360 billion, just behind Apple ($3,520 billion), but ahead of Microsoft ($3,120 billion).

Buoyed by the strength of technology stocks, the Tokyo Stock Exchange rallied by more than 1.1% on Tuesday, giving it a gain of almost 25% over the past 12 months.

The bond market continued to look gloomy against a backdrop of renewed risk appetite, with the yield on ten-year US government bonds hovering around 4.10%.

On the oil market, Brent crude suffered heavy profit-taking (-3.6% to $74.6/barrel) as OPEC once again lowered its demand forecast for 2024 and 2025.

West Texas Intermediate (WTI) crude lost nearly 3.7% to $71.1/barrel.

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