CAC 40: caution prevails ahead of several indicators

(CercleFinance.com) - The Paris Bourse should open on a stable note on Tuesday morning, a return to calm favored by the easing of tensions on the bond market and the expectation of a first salvo of economic indicators.


At around 8:15 a.m., the 'future' contract on the CAC 40 index - December delivery - dropped 4.5 points to 7269.5 points, pointing to a session start with no marked direction.

Yesterday, the Paris market got off to a cautious start to what promises to be a particularly busy week, with a series of key statistics on the agenda.

After spending most of the day hovering around its equilibrium point, the CAC finally lost ground in the final minutes of trading on Monday, ending the session down 0.4% at 7,265 points, its lowest level of the day.

After a particularly solid November to date, markets have been affected by the return of a slight risk aversion in the last 24 hours", writes Jim Reid, market analyst at Deutsche Bank.

"There is no obvious catalyst for this bout of weakness (...) but the disappointing economic indicators published in the US have not supported market sentiment", he points out.

Wall Street took a negative view of the announcement of a 5.6% fall in new single-family home sales in the US in October, following an 8.6% jump in September.

However, its deviations remained insignificant until the end, as evidenced by the limited declines of the Dow Jones (-0.2), the S&P500 (-0.2%) and the Nasdaq Composite (-0.1%).

By holding above the 7250-point mark, the Paris index nevertheless managed to at least perpetuate its positive short-term trend.

Nevertheless, investors are likely to be reluctant to take clear-cut positions ahead of the important events of the next few days.

Thursday's publication of inflation figures in Europe and the United States is sure to fuel the debate that has been driving financial markets for months.

A further acceleration in prices would put pressure on central banks at a time when interest rates in developed markets are expected to have peaked.

Investors are also paying close attention to economic indicators, in search of encouraging signs about the economy following the marked slowdown in activity in recent months.

In this respect, the Conference Board's closely watched confidence barometer, to be released this afternoon in the US, should show that US households are still worried about inflation.

In contrast to the gloom on the equity markets, Treasury bonds are off to an excellent start this week, with yields easing sharply on both sides of the Atlantic.

In the US, the ten-year yield fell to 4.39%, its lowest level since the end of September, as the prospect of slower growth prompted investors to seek refuge in bonds.

Oil continues its erratic movements just a few days ahead of an OPEC+ meeting, which specialists believe could reveal some dissension within the cartel.

Brent North Sea crude is currently nibbling 0.2% at $80.2 a barrel, while US light crude (WTI) is advancing 0.3% above $75.

In a note released yesterday, BofA strategists said they expected oil prices to rebound next year due to the restocking movement affecting commodity markets.

The American investment bank estimates that Brent should reach an average level of $90 in 2024, while WTI is expected to average around $86 over the coming year.

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