CAC40: 8th rise in a row, back to 7,500

(CercleFinance.com) - The week got off to a flying start, with the CAC40 gaining almost 0.
9% and breaking through the 7,500pt barrier.
It's the 8th consecutive session of gains, +350pts (almost +5% in a straight line), and the "luxury" sector continues to serve as the locomotive, supported by the banking sector (+2.2% for Société Générale, +2.1% for BNP Paribas).
And this rise is taking place without the support of Wall Street, which is moving without direction, the Nasdaq being weighed down by Nvidia's -2.5% (investigation in China into its competitive practices).

"As might have been expected, there was no stock market psychodrama after the censure", observes Christopher Dembik, Investment Strategy Advisor at Pictet AM.

In fact, since the scenario of the Barnier government's downfall appeared inevitable (3 sessions before the vote), the CAC40 has not stopped climbing!

"The reality is that the market has perfectly understood that a debt crisis in France is a fantasy scenario", explains the analyst.

Although the Paris market got back on track last week, it's far from certain that the Paris Bourse will have a very positive end to the year, says the professional.

'Now that the censorship episode is over, the question is whether a Christmas rally is conceivable for the CAC 40?

"We think it's going to be complicated", he asks.

In his opinion, it would not be entirely surprising for the CAC 40 to end the year below the symbolic 7,000-point mark, which would correspond to a decline of around 7% for the year as a whole.

However, as of today, the CAC40 is only 1% away from turning positive again for the year 2024.
This is obviously a singular counter-performance, given that the Euro-Stoxx50 is up +10.5% (it is back above 5,000 this Monday), the DAX +20.5%... which remains modest compared to the +27 on the S&P 500 or the +32% on the Nasdaq since January 1.

Fears that the ECB will opt on Thursday for a limited 25bp cut in its key rates - rather than a more aggressive 50bp easing - could also weigh on the trend and prevent the traditional "Christmas rally".

Faster rate cuts would, in our view, be better suited to the European economic situation, but the euro's decline seems to be scaring off central bankers", notes François Rimeu, senior strategist at Crédit Mutuel AM.
However, the session was positive for Euro-denominated debt, with -0.5pts on Bunds (2.1100%) and -1.5pts on our OATs at 2.8600%: the OAT/Bund spread continues to contract, now at around 75 basis points (versus 88 basis points 10 days ago).
Across the Atlantic, T-Bonds deteriorated by +4pts to 4.188%, and the 2-year by +3pts to 4.1280%.

In addition to monetary policy, investors are gearing up for Wednesday's release of the US consumer price index, which will be particularly closely watched a week ahead of the Fed's final meeting of the year.

According to consensus, US inflation should have accelerated to +0.3% month-on-month in November, after coming in at 0.2% in October.

On the energy market, oil prices rose again on Monday, buoyed by the reappearance of geopolitical risk and concerns over the unrest in Syria following the fall of President Bashar Al-Assad, but there was no panic, as Brent crude recovered just 1.8% to $72.3 a barrel (a typical day for black gold).

In other French company news, Alstom announced an order worth almost 520 million euros, to supply SNCF Voyageurs with 35 additional RER NG trainsets for the RER E line of the Île-de-France Mobilités network, under the framework contract signed in 2017.

Thales announced on Monday that it had been selected by airport operator Avinor to deploy a drone traffic management system for Norwegian airspace.

Finally, SES said it had been awarded a contract worth up to $117 million by the US Department of Defense to support the operations of the United States European Command (USEUCOM).

Copyright (c) 2024 CercleFinance.com. All rights reserved.