The Paris Bourse (+0.5%) beats an all-time record. On the eve of the end of the calendar month, this has become a habit, and not by chance, as strategies expiring on the 30th or 31st are now very 'crowded'.
The CAC40 climbed towards 7,680 (above what was expected 3 months ago for the end of 2024) in the wake of a cascade of records set on Wall Street (6 in 7 sessions).
After 3 weeks of stagnation (from January 4 to 24), the Paris market has just gained +4.5% in less than ten days.
What's striking is the absence of buyers, with less than 830MnsE traded in over 7 hours: it's going up in a staggering vacuum... but in the absence of any challenge from 'sellers' (a species that has been totally extinct for years, now only venturing into a few troubled issues).
On Wall Street, the initial losses have been made good, and the S&P500 (4,929, a new intraday record) could attempt a 7th record in 8 sessions... and why not test the 5.000 tomorrow if the FED gives a 'boost' by showing itself to be very 'dove'?

"The prevailing sentiment on the stock market is optimism", sums up Christopher Dembik, investment strategy advisor at Pictet AM.

Even if there are uncertainties about monetary policy, which are likely to be confirmed by the Federal Reserve this week, investors consider that the economy is sufficiently solid and that corporate results are on target", adds the analyst, who considers equities "resilient and unavoidable".

While there is little doubt that the Fed will maintain the status quo tomorrow, market participants will be looking to Jerome Powell's speech for clues as to the timing of future rate cuts.

On the indicators front, Friday's publication of the monthly US employment report will provide further information on the US economy.

For the time being, the European markets (+0.5%) are laughing at the poor 1st estimate of gross domestic product for the fourth quarter in the euro zone.

In France, GDP remained stable in the fourth quarter (-0.02%), according to data published this morning by Insee, after having already remained unchanged in the third quarter. On average over 2023, French GDP grew by 0.9% (after +2.5% in 2022 and +6.4% in 2021).

Investors are also awaiting the results of tech giants Microsoft, Alphabet and AMD, due this evening, on which they are placing high expectations (valuations are in the stratosphere: no disappointment will be tolerated).

This is an extremely important session for anyone wishing to know whether the stock market rally, which is essentially the result of confidence in tech stocks, will continue", says Christopher Dembik.

"There will be no room for error, as the results season has so far been fairly average", adds Alexandre Baradez, head of market analysis at IG France.

He points out that US equities are currently trading in an expensive environment, with the S&P 500 paying 20 times expected earnings (50 times for GAFAM + Nvidia), despite persistently high interest rates.

Yesterday's improvement in bond yields fizzled out in Europe, where yields fell by an average of +3.5 basis points.
In the US, T-Bonds stabilized at around 4.09%, unable to offer real support to equity markets as they did on Monday.

Brent crude was stable at around $82.5 a barrel. The euro is also stable against the greenback, at around $1.08/E.

In French company news, Seb announces the construction of its first professional equipment hub in Shaoxing, in China's Zhejiang province, which should be operational by 2025 and will include an R&D center, purchasing and a production site.

Engie announces the signing of a power purchase agreement (PPA) with Amazon for 123 MW from Ocean Winds' Moray West offshore wind farm, off the coast of Scotland, bringing the total to 473 MW when the site becomes operational later this year.

Last night, Egide forecast sales growth of 8.7% in 2023, but warned that geopolitical factors would have a slowing effect on its business this year, a prospect that caused its share price to fall sharply.


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