The Paris Bourse is stabilizing its losses on this 3rd Monday of the year, and the CAC40 (-0.7%) - which erased the 0.6% gained last week - will no doubt preserve the annual low of 7,400/7,390 reached on January 11th.

The day's few sales are weighing more heavily in a context of particularly tight trading (900MnsE traded at 1/2 hour to close) in the absence of US operators.
Wall Street will remain closed on January 15, a day of public holidays and celebrations (Martin Luther King's Day).
European markets (-0.55% on average) are not benefiting from the +0.9% rise in the Tokyo Stock Exchange this morning, which has gained 7% in a straight line since January 4 (6 consecutive sessions of gains), with the Nikkei climbing back above 36,000 during the session, driven by investor expectations that the Japanese economy will emerge from deflation.

OATs (2.733%) and Bunds (2.194%) fell on Monday by +5 and +6pts, Italian BTPs by +6.5pts, while the ECB seems very reluctant to let the markets expect a rate cut before next autumn (whereas many are hoping for one at the start of the 2nd half of the year).


Stock markets are likely to become more animated tomorrow as the flow of quarterly results intensifies on Wall Street this week, monopolizing investor attention in the absence of major economic events.

Fourth-quarter earnings releases are particularly eagerly awaited due to the high valuation of the S&P 500, which trades at 19.5 times expected earnings, compared with a ten-year average of 17.6 (and the 'Fantastic 7' have P/Es ranging from 29 to 80 times earnings).

In the US, Morgan Stanley and Goldman Sachs will publish their accounts on Tuesday, followed by Alcoa the next day and oil services group SLB on Friday.

Note that the U.S. election primaries have begun with the IOWA caucus (Trump is the clear favorite in this ultra-conservative state).
"Barring any last-minute surprises, all the polls indicate that Trump is in a position to win the Republican nomination", stresses Christopher Dembik, investment strategy advisor at Pictet AM.

The economic agenda promises to be calmer, with the highlight being the retail sales figures for December, which will provide a gauge of the health of consumer spending in the USA.

The 'figure of the day' was published mid-morning in Europe: industrial production, seasonally adjusted in October and November 2023, fell by 0.3% in the eurozone and by 0.2% in the EU, according to Eurostat, following declines of 0.7% and 0.5% respectively between September and October.

In the eurozone, production of durable consumer goods fell by 2%, while production of non-durable consumer goods rose by 1.2%.
Over 1 year, the decline is close to -6.5% in the Eurozone, which largely explains the contraction in GDP growth expected in Q4 (GDP of -0.1% in Germany and the EU).

Uncertainty surrounding the timing of the Fed's first rate cut could also continue to generate volatility, while the latest inflation data argue for a delay.

However, the US markets are currently banking on a 70% chance of a first easing in March, followed by two further cuts in May and June, expectations which some analysts consider too aggressive.

Only the next Federal Reserve meeting, scheduled for the end of the month, will provide some visibility on the future evolution of monetary policy.


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