Pre-opening
CAC 40: optimism dissipates somewhat
published on 04/11/2022
(CercleFinance.com) – After ending on a note of optimism on Friday evening (+1.3%), the Paris Stock Exchange should start to fall again on Monday at the start of the session, hampered by the decline in oil prices and the strengthening bond yields. Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – luck April – cled 27 points to 6,518.5 points, suggesting an opening in negative territory.
The trend is weakened in particular by the decline in the barrel of oil, which should weigh on energy stocks which have so far been big winners in the 2022 stock market year with a gain of more than 18% for the STOXX Europe 600 Energy index since the 1st January. Fears about global growth linked to the repercussions of the war in Ukraine and the deterioration of health in China, with the implementation of new confinements, raise fears of a drop in demand.
Brent is currently losing almost 2% to come back towards 100 dollars a barrel, while American light crude is down more than 2% around 96 dollars. US ten-year yield which is nearing 2.76%, its highest level in almost three years.’Equity markets are still in the recovery phase after the sell-off at the beginning of March, but investors prefer even defensive stocks and sectors linked to raw materials’, we note at Liberum.
These cautious developments fuel the debate about the risk of a bearish movement on equities in the context of tightening monetary policies, particularly in the United States. According to the latest minutes from the Fed, the American economy would be robust enough to support a rapid monetary tightening, which means that rate hikes could accelerate in the coming months. Beyond the evolution of the war in Ukraine, the declarations of central bankers should therefore constitute an important point of attention markets over the next few weeks.
These elements should provide investors with the opportunity to assess companies’ ability to cope with the new inflationary environment, both in terms of margin and growth. tighter than expected looming between Emmanuel Macron and Marine Le Pen. ‘If Macron’s lead (28%) ahead of Le Pen (24%) the outcome of the first round is more important than that of 2017, the polls go in the meaning of a narrower score in the second round (53%-47%)’, underline this morning the strategists of Danske Bank.
“With a re-election of Macron still far from certain, the markets will closely follow the evolution of the polls during the next two weeks”, explains the Danish bank. According to the Scandinavian establishment, the television debate between the two candidates, scheduled for April 20, could therefore play a ‘decisive’ role in order to convince French readers. (c) 2022 CercleFinance.com. All rights reserved.