2023-12-11 16:14:00
(CercleFinance.com) – The Paris stock market (+0.45% to 7,560) resumes its inexorable advance 4 days before the ‘4 witches’ session with a new absolute record for the CAC40 ‘GR’ (at 22,867 points).
For the CAC ‘PX1’, while trade has barely exceeded EUR 1,250 billion exchanged at 5 p.m., a record close is looming over the next few hours (only 0.2% less than that). to reach 7,573).
And annual or historical records continue to fall for the DAX (at 16,790) or the Euro-Stoxx50 (+0.4%, around 4,540 points).
Investors are showing unwavering confidence in the continuation of the ‘end of year rally’, despite meetings of the American Federal Reserve (13/12) then the European Central Bank (ECB 14/12).
The major central banks recently ended their cycle of rate increases, but their more accommodating approach does not seem sufficient in the eyes of the markets, which are now anticipating rapid rate cuts, convinced that Mr J. Powell or Ch. Lagarde are the unwavering allies of holders of ‘risky’ assets.
The publication on Friday of better than expected employment figures for the month of November confirmed the scenario of a ‘soft landing’ for the American economy, which makes monetary easing less urgent… but it is already forgotten.
Wall Street has been applauding the emergence of a ‘Goldilocks’ scenario for 6 weeks and records are also falling for the Dow Jones (36,335) and the S&P500 exceeds that of July 17 at 4,607 Points to establish a new one at 4,609: a record of closing appears likely if the good moods at mid-session last until 10 p.m.
In Europe, the indices have matched or beaten the S&P500 since January 1: an imminent rate cut is hoped for while the European Central Bank (ECB) is urged to do more in the face of an economy that is undeniably flirting with recession.
‘The markets consider that the first rate cuts could take place as early as March and that the ECB could make nearly six rate cuts of 0.25% in 2024,’ notes Alexandre Baradez, head of market analysis at IG France.
For the strategist, these expectations are probably too aggressive knowing that underlying inflation in the euro zone is currently hovering around 3.6%, still far from the 2% target established by the central bank.
The Bank of England, whose announcements are expected on Thursday as for the ECB, does not seem in any hurry to join the ‘doves’ camp either.
With central banks which do not seem ready to agree with current market forecasts, the return to reality could prove complicated for investors already in euphoric mode.
Beyond central bank announcements, the fall ‘rally’ will be tested by leading economic indicators, including the latest figures for inflation and retail sales in the United States.
In Europe, the preliminary PMI indices for the month of December – expected on Friday – will allow us to assess the seriousness of the recessionary threat on the Old Continent.
In the meantime, dead calm on the bond market with Bunds and OATs frozen at their Friday levels (2.268% and 2.82%), T-Bonds showing +2.3Pt at 4.270%.
In the news of French companies, Alstom announced this weekend the inauguration of the Citadis Dualis tram-trains on line T12 of the Île-de-France Mobilités network which since yesterday has linked two major centers of Essonne, Évry- Courcouronnes and Massy-Palaiseau.
Arkema announces that it has signed a 20-year contract with EDF Renewables for the supply of 20 GWh/year of electricity from solar energy, a partnership which will begin in 2026 and will cover 70% of the electricity consumption of the eight Bostik sites in France.
Saint-Gobain announces that it has signed an available credit line of four billion euros maturing in December 2028, including two extension options of one year each, which replaces two available lines of 2.5 and 1.5 billion maturing December 2024.
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