CAC 40: towards a calm session with the absence of Wall Street

(CercleFinance.com) - The Paris Bourse is expected to trend lower on Thursday morning, as Wall Street closes for the day of national mourning in honor of President Jimmy Carter, who died on December 29 at the age of 100.


At around 8:15 a.m., the CAC 40 future contract - January delivery - on the CAC 40 index was down 20.5 points at 7,438 points, heralding a note of heaviness at the opening.

The buoyant trend that had prevailed in Paris since the start of the year ran out of steam yesterday as US equities wavered amid concerns about a new trade war.

According to CNN, Donald Trump intends to declare a national economic emergency in order to quickly implement his plan for "universal tariffs" to reduce the country's trade deficit.

After holding steady all morning, the Paris market fell sharply at midday, although it managed to limit its losses to around 0.5%, to 7,452 points, by the end of the morning.

The absence of US investors should limit movements on all markets and prompt investors to exercise relative caution.

After last year's underperformance, investors could nevertheless be tempted to return to buying European equities in search of bargains.

We believe that low valuations and investor positioning, the fall in the euro, as well as potential reforms in Germany, a peace agreement in Ukraine and more support measures in China should improve Europe's risk/return profile", wrote Barclays' strategists yesterday.

The recent fall in the euro could also stimulate the trend by offering opportunities to position themselves on the most export-oriented stocks.

The general climate remains unfavorable to the single currency, with political uncertainty and sluggish growth, two factors which argue in favor of additional monetary support from the ECB.

On the foreign exchange market, the euro is stabilizing this morning at around 1.0305, having hit a new low of almost three years against the greenback last week, at 1.0265.

On Wednesday, US indices ended with no clear direction (+0.2% for the Dow Jones, -0.1% for the Nasdaq) at the end of a session in which red dominated for a long time.

The publication of the minutes of the Federal Reserve's latest monetary policy meeting had no impact on the session.

According to the minutes, the central bank's decision-makers believe that the risks surrounding a reawakening of inflation have increased, justifying a cautious approach to monetary policy decisions over the coming quarters.

Against this backdrop, the news looks set to be relatively light, with a slim agenda for the session ahead, apart from a final handful of statistics such as industrial production in Germany and retail sales in the eurozone.

After rising sharply yesterday, benchmark US government bond yields stabilized at the end of the session, with 10-year paper easing slightly to 4.69%.

The same movement was seen on the European market, where the yield on the ten-year German Bund fell to 2.52%, while the French OAT for the same maturity tightened to 3.35%, giving a spread of 83 basis points.

After halting yesterday the upward movement that had been underway since the end of 2024, the oil market is attempting to move forward again this morning, following the announcement of a sharp drop in US crude inventories.

The price of a barrel of US light crude (West Texas Intermediate, WTI) has thus recovered 0.2%, climbing back towards $73.5.

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