The Paris Bourse confirms its heaviness (-0.5 to 7,930, in ultra-low volumes of 1.2 billion euros) despite US indices remaining in the green (+0.1 to +0.2%, Nasdaq-100 back above 18,000).

The CAC40 remains less than 1% away from the 8,000Pts reached intraday on Friday (7.976Pts) and slightly behind the other European markets, with only -0.15% for the Euro-Stoxx50 and even a new all-time high for the DAX40 (+0.15% at 17,450), despite the German economy lining up a 3rd quarter of recession, with growth forecasts virtually reduced to zero for 2024 by the government.

The CAC40 was not penalized by the news (no market movers on Monday), but by the decline in shares such as Carrefour (-4%), Veolia (-2.2%), Teleperformance and Alstom (-2%).

Since the start of the year, the Paris market is already up 5.5% - a move so strong that some investors may well be tempted to start taking some profits.

On Wall Street, the major US indices also set new intraday records on Friday, largely due to the strong performance of the technology heavyweights, with Nvidia at the forefront.
And after 17 weeks of gains - and new absolute records - Wall Street looks set for an 18th, continuing the longest bullish streak since 1972, with a concentration ratio (weighting of the top 10 capitalizations) not seen since 1929, and well beyond the tech-related peaks of 1999/2000.

Just because the markets are at all-time highs doesn't mean we should expect investors to start tiring," moderates Craig Fehr, strategist at Edward Jones.

"Still, it seems reasonable to think that the markets will catch their breath in the short term, given the speed and scale of the recent upward rally," he warns.

In particular, caution may be called for ahead of the release of US inflation figures, which could influence the Federal Reserve's next monetary policy decisions.

Thursday will see the release of monthly figures for the PCE consumer price index in the USA, one of the statistics most closely watched by the Fed and expected to rise by 0.4% month-on-month in January.

"Ideally, we would need a PCE core index of around 0.2% per month for several months for the Fed to feel sufficiently comfortable with the inflation dynamic to lower key rates", believes Christopher Dembik, investment strategy advisor at Pictet AM.
US GDP for the fourth quarter will also be monitored on Wednesday, after an initial estimate had put it up by 3.3% at an annual rate, a figure that had beaten most market forecasts.

The bond markets, which had eased late last Friday, are now wiping out all their gains, with the US T-Bond tightening by 25pts to 4.280%, and the deterioration more marked in OATs (+7pts) and Bunds (+6.5pts), at 2.895% and 2.427% respectively.
The dollar is down by an average of -0.2%, while the euro is up by 0.25% to $1.0845.
Oil recovers with a 0.62% rise in London ($82) and New York.

In French company news, Saint-Gobain announces that it has reached a definitive agreement to acquire CSR Limited at a price of A$9 per share, representing an enterprise value of A$4.5 billion (around €2.7 billion).

Arkema reports that it has signed long-term renewable energy supply contracts for its sites in Calvert City (Kentucky), Beaumont (Texas), Chatham (Virginia) and West Chester (Pennsylvania), as well as for all Bostik sites in the United States.

Stellantis announced on Monday that it had signed a framework agreement with the car rental group Ayvens, under which it plans to purchase up to 500.000 vehicles in Europe by 2026.

The Canal+ group, a subsidiary of Vivendi, announces that it has increased its stake in Viu, a leading streaming service present in Asia, the Middle East and South Africa, to 30%, in accordance with the terms of the transaction announced on June 21, 2023.

Copyright (c) 2024 All rights reserved.