CAC 40: investors remain on hold

(CercleFinance.com) - The Paris Bourse is likely to start trading little changed on Tuesday, with investors reluctant to commit themselves before the publication of the latest inflation figures for the eurozone.


At around 8.15am, the 'future' contract on the CAC 40 index - December delivery - fell by 3.5 points to 7,290 points, heralding a stable or even moderately downward opening.

After losing up to 0.5% yesterday afternoon, the Paris market managed to get back on track before the close, ending the session with a modest gain of 0.1% to 7278 points.

However, the CAC is down 12% since its record highs in May, corresponding to a 3.5% decline since the start of the year.

The factors behind this underperformance are well identified: lacklustre growth, political uncertainty, weak demand from China and disappointing results have penalized the trend in recent months, not to mention Donald Trump's recent victory, deemed unfavorable to European companies.

After this roller-coaster episode, investors prefer to remain in a wait-and-see position, while hoping that a forthcoming bullish catalyst will enable them to catch up with Wall Street.

The publication later this morning of the final figures for inflation in the eurozone in October could provide them with further clues as to the pace of rate cuts to be expected from the ECB.

According to the first estimate published at the end of October, the inflation rate rose from 1.7% to 2% year-on-year in the region last month, due to unfavorable base effects, particularly in Germany.

The data to be published at 11:00 a.m. should enable market participants to clarify their views ahead of the December 12 meeting, at the end of which a further rate cut is expected, the fourth this year.

For the past ten days or so, the New York Stock Exchange has also been moving without much of a trend, in the absence of sufficiently strong elements to sustain the upward trend at work since Trump's victory, whose policies are now beginning to raise a few questions.

While investors initially appreciated the Republican candidate's promises of tax cuts and deregulation, they are now wondering about the inflationary repercussions of his "pro-business" policies.

Fears of a slowdown in the Fed's monetary easing - in the event of a resurgence in inflation - are prompting investors to be particularly cautious.

The suddenness of the recent rise in US government bond yields took many analysts by surprise, and largely contributed to Wall Street's sharp decline last week.

Traders should therefore continue to keep an eye on the bond market, where the rate on 10-year paper eased slightly last night to around 4.41%.

After a roller-coaster week on Wall Street, investors are eagerly awaiting Nvidia's results, which could give the stock market a fresh boost tomorrow evening or, on the contrary, trigger a new bout of anxiety.

Analysts are expecting the AI giant, as usual, to publish better-than-expected accounts accompanied by an increase in targets, especially as the chip designer is beginning to benefit from the recent launch of its new architecture, dubbed 'Blackwell'.

On the oil market, black gold prices eased back from the previous day's soaring prices, due to geopolitical factors following Joe Biden's authorization for Ukraine to carry out long-range strikes on Russia.

At $73.3 a barrel, Brent crude was virtually unchanged this morning.

In this tense climate, gold (+0.3% to $2,622.6 an ounce) is back in favor with investors after a sequence of declines that saw it fall some 9% from its recent highs.

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