The Paris Bourse is set to open in the red on Monday, with investors taking a breather after last week's sharp rebound and ahead of the start of the quarterly earnings season.

At around 8:15 a.m., the 'future' contract on the CAC 40 index - for delivery at the end of January - was down 24.5 points at 7410 points, heralding a rather cautious start to the week.

The Paris market had ended Friday's session down 0.8% at 7,431 points, but ended the previous week with a gain of more than 2%, a performance that was, for once, the antithesis of Wall Street.

Indeed, the US equity markets posted a second consecutive week of declines, with average losses of around 2%, increasingly concerned about the trajectory of future Fed rate cuts.

Wall Street is gearing up for a decisive week marked by the publication of quarterly results from several heavyweights in the US economy, which will set the tone for the sessions ahead.

The major US banks will be in the spotlight in the first week of the earnings season, with Citi, Goldman Sachs, JPMorgan and Wells Fargo scheduled for Wednesday, followed by Bank of America and Morgan Stanley the next day.

Comments from these leading financial institutions will provide investors with interesting reading on the current state of the economy, consumer spending and the economic outlook in the USA.

According to FactSet, US corporate earnings in the S&P 500 index are expected to have risen by an average of 11.7% year-on-year in Q4, their biggest increase since the end of 2021.

As we saw last Friday with the strong US employment figures, good statistics are no longer enough to push the market higher, as they are synonymous with less monetary easing.

The earnings season will therefore determine whether the New York Stock Exchange can regain upward momentum, given that the S&P 500 is currently trading at 21.5 times earnings, well above its ten-year historical average (18.2).

The reopening of the earnings season will not, however, completely overshadow what is currently at stake on the other side of the Atlantic, between uncertainties over Donald Trump's future policies, the reawakening of inflation and tensions over bond yields.

U.S. long yields hit new one-year highs on Friday in the wake of the latest employment report, which turned out to be much stronger than expected.

In terms of macro-economic indicators, market players will be keeping a close eye on U.S. inflation figures for December, due out on Wednesday.

A higher-than-expected reading would put further pressure on US bond yields and penalize equity markets.

In November, the consumer price index (CPI) rose at an annualized rate of 2.7%, compared with 2.6% in October, a level still far from the Fed's 2% target.

The results season also begins in a climate of growing trade uncertainty, a week ahead of the inauguration of Donald Trump, who will officially become the 47th President of the United States next Monday.

The New York businessman's aggressive rhetoric on the international stage has recently caused great concern among investors, amplifying the correction in US equities and the rise in rates triggered by statistics showing the resilience of the world's leading economy.

The president-elect plans to impose particularly high tariffs on all goods imported into the United States, a policy that could boost inflation and limit the Fed's potential for action.

During his campaign, he stated his intention to tax Chinese goods by 60% and goods from other countries by 10%-20%.

The implementation of long-lasting 'universal' tariffs would be a negative factor for equities, especially for retailers, automakers, technology companies, semiconductor manufacturers and certain industrial groups.

In view of these uncertainties and less attractive valuations, investors are wondering whether the time has come to take profits on US stocks, worried that a major correction could occur in the months ahead.

In a note published last week, Goldman Sachs strategists put at 30% the probability of a fall in world stock markets of at least 10% within three months, and more than 20% within 12 months.

Against this backdrop, gold is regaining some of its appeal in the eyes of investors, taking the yellow metal to levels close to its all-time highs reached over two months ago.

Oil prices are also confirming their upward trend, as the Biden administration decided on Friday to impose new sanctions on the Russian energy sector.

This morning, Brent crude is still up 1.6% at $81.1 a barrel, while US light crude (WTI) is up 1.8% at nearly $78, returning to its highest levels since October.

Copyright (c) 2025 CercleFinance.com. All rights reserved.