CAC 40: slight gains at the start of a shortened session

(CercleFinance.com) - The Paris Bourse is set to open slightly higher on Tuesday morning, in what promises to be a tight market ahead of the shortened and usually featureless Christmas Eve session.


At around 8:15 a.m., the CAC 40 future contract - expiring in January - was up 26 points at 7,313 points, suggesting a fairly positive start to the session.

However, trading volumes are likely to be very thin due to the Christmas break, with no major indicators on the agenda and many investors on vacation.

There's not much to report on the stock market front either.

As was the case yesterday, the European stock exchanges due to open today should continue to sail along quietly, with low volumes and reduced volatility.

In Europe, the Frankfurt, Milan and Zurich stock exchanges are already closed.

The Paris market will close at 1:00 p.m., the London market at 12:30 p.m. (local time), while Wall Street will also benefit from a lighter trading schedule, closing at 6:00 p.m. (New York time).

With just a few days to go before the end of the year, the CAC 40 is down 3.5% for the year, reflecting both the political uncertainty that has prevailed in France for the past six months and the worsening economic outlook in Europe.

On the other side of the Atlantic, the S&P 500 is up 25% since January 1, thanks to the strength of AI-related stocks, solid economic growth and the Federal Reserve's more flexible monetary policy.

Despite yesterday's appointment of a new government by François Bayrou, analysts expect further political instability in France in 2025, and a prolongation of decoupling from the US.

'The gaps are likely to widen', warned one trader recently.

The 'America First' theme could boost US growth - in the short term at least - while tariffs would penalize Europe", according to the professional.

According to Edmond de Rothschild's teams, European equities are now trading at historical discounts of 40% to their US counterparts, twice the 20-year historical average.

The latest year-end portfolio rebalancing is not benefiting the euro, which continues to trade below 1.04 against the dollar and is heading for an annual decline of 6% against the greenback.

Some nervousness remains on the bond market, as evidenced by the rise in the yield on 10-year Treasuries, which is now flirting with the 4.60% threshold, its highest since May.

Still hesitant, oil prices rose slightly, with Brent advancing by 0.3% to nearly $73 a barrel and US light crude (West Texas Intermediate, WTI) gaining 0.4% to $69.5.

Over 2024 as a whole, black gold prices will finally have given up some ground due to abundant supply and the Chinese economy's difficulties in rebounding.

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