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A few days before the end of the year, the Paris Bourse sets a new record

324519821 / m.mphoto – stock.adobe.com

The CAC 40 ended the year with a bang. The Christmas “rally” crowns an already prosperous 2021 vintage.

The year ended in style on the Paris Stock Exchange. The CAC 40 climbed 0.76% on Tuesday and broke its all-time high at the close, to 7,181.11 points, overcoming fears related to the spread of the Omicron variant. During the session, he climbed to 7,187.76 points, a level also unprecedented. His previous records in session (7,183.08 points) and at the close (7,156.85 points) dated from mid-November. Since the start of the year, the CAC 40 has climbed by more than 29%, unheard of in 20 years.

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Last week, British studies showed that infections with the Omicron variant of Covid-19 are less likely to cause hospitalizations, compared to the Delta variant, which seems to have reassured investors.

In addition, the restrictive measures put in place by governments to deal with the explosion of contaminations have less impact on economic activity than the confinements imposed at the start of the pandemic. In France, the government has decided in particular to make teleworking “compulsory” three days a week for positions which allow it, to ban standing concerts and to ban standing consumption in bars. The isolation rules for patients and contact cases will also be “adjusted” by the end of the week to avoid paralysis of the country.

Investors are now looking towards 2022 and are fucking optimistic. They anticipate a continuation of the rebound in economic growth and upward trend in company results.

Window dressing

The market is also benefiting from the traditional portfolio wrapping operations at the end of December. As the end of the year approaches, the managers are strengthening positions on the stocks that show the best stock market performance. This “window dressing” allows professionals to present a more attractive portfolio when closing accounts and thus hope to attract new clients. This perfectly legal strategy gives the market a boost during the confectioners’ truce, it is the traditional end-of-year rally.

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