CAC 40: towards a quiet week due to public holidays

(CercleFinance.com) - The Paris Bourse is set to open slightly higher on Monday for the first session of what promises to be a relatively quiet week, due in particular to the upcoming public holidays of Armistice Day and Ascension Day.


At around 8.15am, the future contract on the CAC 40 index - for month-end delivery - was up 15 points at 7959 points, suggesting a moderate advance in early trading.

The Paris market had lost 1.6% last week, but the strength of the US markets - which rallied sharply on Friday on the back of employment figures deemed reassuring - shows that the markets are still showing a clear propensity to rebound.

Some strategists, however, are pointing to increasingly high valuations and a market momentum that is beginning to tighten.

After a very positive first quarter, the CAC 40 suffered a slight setback in April (-2.7%), bringing to an end a positive sequence of five consecutive months of gains.

In the absence of any real catalysts, investors may therefore prefer to stay on the sidelines this week, in favor of the old stock-market proverb: 'Sell in May, then walk away'.

We have re-examined this market adage and found that it is much more than just a cliché", emphasize the teams at J. Safra Sarasin.

"Indeed, performance during the summer months has always been weaker, across all regions, sectors and time periods", reminds the private bank.

We still expect equities to rise between now and the end of the year, but the next few months are likely to follow the usual seasonal pattern, with only a moderate increase", warns the Basel-based bank.

Investors seem to be waiting for just one thing in the near future: for the Federal Reserve to finally decide to cut rates, a prospect that remains shrouded in the utmost vagueness.

The few minor indicators scheduled for this week are unlikely to shed any light on the timetable.

Among the few indicators on the agenda this week, the University of Michigan's consumer confidence index on Friday will provide a clearer picture of current US household morale.

In Europe, the PMI services indexes - which held out some pleasant surprises in their preliminary versions - could turn out to be a little less flattering in their final versions today.

Among the companies that have yet to publish their quarterly results, American entertainment giant Disney, British chipmaker Arm and oil group bp will announce theirs this week.

Several French companies will also publish their results this week, including Alstom, Arkema and Bouygues.

The Paris market will be open on Wednesday and Thursday for the Armistice Day on May 8, 1945 and for Ascension Day, but should be relatively inactive during these two French public holidays.

Volumes should remain limited today as the London Stock Exchange closes for the 'Early May Bank Holiday'.

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