CAC 40: investors still lack inspiration

(CercleFinance.com) - The Paris Bourse is expected to open in the green on Thursday, following in Wall Street's footsteps, even if investors are likely to opt for a cautious approach ahead of a busy weekend.


At around 8:15 a.m., the 'future' contract on the CAC 40 index - July delivery - was up 12.5 points at 7,638.5, heralding a rather positive start to the day.

The Paris market had ended Wednesday's session with a loss of 0.7% at 7609 points, continuing to underperform its European and American counterparts.

But the New York Stock Exchange has also been erratic in recent days, affected by the extreme volatility of the Nvidia share, which alternates between profit-taking phases and cheap buybacks.

With 48 hours to go before the end of the first half of the year, the markets seem to lack inspiration and fuel, and yesterday's gains proved unconvincing.

The Dow Jones index gained 0.05% to 39,127, the S&P 500 0.15% and the Nasdaq 0.50%.

Market participants seem to want to stay on the sidelines and avoid committing themselves before a weekend that promises to be rich in economic and political events.

Tomorrow's publication of the PCE price index, the Fed's preferred measure of inflation, could offer some visibility on the evolution of monetary policy in the United States.

On the political front, Joe Biden and Donald Trump will be sharpening their weapons ahead of their first televised debate, scheduled for tonight on CNN, in the run-up to November's presidential election.

With less than five months to go to the polls, polls are predicting a particularly close election (46% of voting intentions for Trump, 45% for Biden), hence the importance of this confrontation.

In France, too, candidates will be throwing their last energies into the campaign to mark the first round of the early legislative election, to be held on Sunday.

Beyond the upcoming composition of the National Assembly, investors remain primarily concerned by the budgetary issues of the opposing forces, which threaten to derail public accounts.

Thursday's session will also be busy on the indicators front, with US durable goods orders, jobless claims and the third estimate of first-quarter GDP due out in the early afternoon.

On the bond market, the 10-year yield on US government bonds, which had been little changed since the start of the week, rose above 4.31% on the eve of the inflation figures.

Its German equivalent ended Wednesday up at 2.45%.

The yield spread between the Bund and the French 10-year OAT nevertheless widened, to around 78 basis points.

Oil prices retreat following the announcement of a slight weekly rise in crude oil inventories last week in the United States.

Brent crude loses 0.1% below $85.2 a barrel, and West Texas Intermediate (WTI) more than 0.1% below $80.8.

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