CAC40: slight rebound at the start of a shortened session

(CercleFinance.com) - The Paris Bourse began the trading session higher on Tuesday morning, in a market that was expected to be tight at the start of the short and usually featureless Christmas Eve session.
The CAC40 index climbed 0.5% to 7310 points.

Trading volumes are expected to be very thin, however, 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 that will be 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 2:00 pm, the London market at 12:30 pm (local time), while Wall Street will also benefit from a lighter regime, with a scheduled close at 6:00 pm (New York time).

With just a few days to go before the end of the year, the CAC40 is down 3.2% 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 more flexible monetary policy adopted by the Federal Reserve.

Despite yesterday's appointment of a new government by François Bayrou, analysts expect continued 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 a historic 40% discount to their US counterparts, twice the 20-year average.

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

Nervousness remains on the bond market, as does the rise in the yield on 10-year Treasuries, which is now flirting with the 4.60% threshold, its highest level since May.

Still hesitant, oil prices are back on a slight uptrend, with Brent advancing 0.3% to nearly $73 a barrel and US light crude (West Texas Intermediate, WTI) gaining 0.4% to $69.5.

For 2024 as a whole, black gold prices will finally have lost some ground due to abundant supply and the difficulties of the Chinese economy to rebound.

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