CAC40: hope returns for a soft US customs policy

(CercleFinance.com) - Wall Street's upward reopening comes as no surprise, after Friday's bullish impulse, but with a +1% gain on the S&P500 and +1.
5% on the Nasdaq, that's already a rise of 2.5 to +3% in 2 sessions, making for a thunderous start to the year.

The Paris Bourse also gained +1.5%, as did the Euro-Stoxx50, and from 12:00 onwards, these indices experienced a spectacular upward acceleration (up to +2.3% around 7.450 for the CAC40) - which came as a complete surprise - and resembled a sort of delayed Christmas present for markets which had ended the year on a heavy note (all the losses of the second half of December were wiped out in one fell swoop).

A "gift" in the form of an article in the Washington Post, which understands - via indiscretions from its advisors - that Donald Trump would abandon his plan for prohibitive universal tariffs, targeting only "crucial imports".

The CAC40, which was struggling on Friday to save the 7,300 mark, climbed back to 7,400 in the wake of STMicro (+6.6%), Stellantis (+4.5%), Dassault Systèmes (+4.3%) and Hermès (+3.8%).
The Euro-Stoxx50 posted +1.3% to 4,945, Frankfurt +1%... London, on the other hand, lagged behind, with a decline of -0.1%.

What a contrast to the start of the session (a gloomy mood after the publication of the PMIs), since from the analysts' point of view, the year 2025 looks set to be a difficult one for the CAC, between stalled economic growth, stubborn political uncertainty and a stall vis-à-vis Wall Street.

"There is little chance of the Paris index being helped in the near future by a possible economic recovery in China", warns Christopher Dembik, investment strategy advisor at Pictet AM.

For the professional, the technical elements also argue in favor of a continuation of the downtrend that began last May.

"The CAC 40 is moving well below its 200-day moving average, with the risk of a further decline to 7,000 points if the negative trend persists", he warns.

On the statistics front, the HCOB composite PMI index of overall activity in the eurozone remained below the 50 mark in December, but recovered from 48.3 in November to 49.6, signalling a slowdown in the contraction of private sector activity to a marginal pace.

In France, the HCOB PMI composite index of overall activity stood at 47.5 in December.
Up from the ten-month low recorded in November, it nevertheless signals a contraction in private sector activity for a fourth consecutive month.

The week ahead will also be marked by the release, on Wednesday, of the 'minutes' of the US Federal Reserve's monetary policy meeting.

The minutes may provide investors with more information on the reasons behind this decision, and may give an indication of the pace of rate cuts to be expected this year.

As a reminder, US stock markets will be closed tomorrow for the national day of mourning in honor of former President Jimmy Carter, who died on December 29 at the age of 100.
On the bond front, the panorama is mixed: our OATs are easing by -2.5% to 3.27%, Bunds are stretching by +2.8pts to 2.453% and Italian BTPs are easing by -1.5pts to 3.5819%.
The OAT/Bund spread is down to +82pts, so we can breathe a little easier.
US T-Bonds are back on the rise, with +2.5pts to 4.623%.

The reversal of expectations in terms of customs tariffs pushes the Dollar down -0.8% against the Euro, which climbs to 1.0380, while the '$-Index falls back -0.7% to 108.15.

In French company news, Unibail-Rodamco-Westfield (URW) announces the sale of a 15% stake in Westfield Forum des Halles, a major 77.600 m2 shopping center in the heart of Paris, to CDC Investissement Immobilier, for a net sale price of 235 million euros.

Following on from the agreement signed last November to sell its meals-on-wheels business, Fleury Michon has confirmed the definitive sale of this business to Kumo, once the conditions precedent have been lifted.

ArcelorMittal announced on Monday that it had decided to discontinue its long steel production activities in South Africa, in the face of economic conditions deemed too unfavorable.

Finally, Biophytis announced that the listing of its ordinary shares and warrants on Euronext Growth, and of its American Depositary Shares (ADS) on the OTC market, has been temporarily suspended with effect from the opening of trading.

This suspension takes place prior to the conclusion of a refinancing transaction, details of which will be communicated when trading resumes in the coming days", explains the biotech company specializing in age-related diseases.


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