Paris stock exchange is poised for a lower opening after five consecutive gains, with the CAC 40 futures down 12.5 points. Investors await Wall Street’s reopening post-inauguration of President Trump, whose speech eased concerns about protectionism. The euro rose against the dollar, while Asian markets posted gains. Analysts predict potential benefits for Paris stocks due to Trump’s return, despite possible market volatility. Key economic indicators, including Germany’s ZEW index, are anticipated, and oil prices are experiencing profit-taking.
Paris Stock Exchange Anticipates Lower Opening
The Paris stock exchange is set to start lower on Tuesday, following a streak of five consecutive gaining sessions. Investors are awaiting the reopening of Wall Street after a long weekend that featured the inauguration of new U.S. President Donald Trump.
As of 8:15 AM, the futures contract for the CAC 40 index, with a February maturity, has dropped by 12.5 points to 7744 points, indicating a cautious return after the recent upward momentum.
Inauguration Speech and Market Reactions
Today’s session is expected to bring more activity to the stock markets, particularly with New York reopening after the ‘Martin Luther King Day’ holiday. Currently, futures contracts on major indices indicate a potential recovery in the market’s performance.
Investors were reassured by the inauguration speech of the 47th President of the United States, which addressed their concerns regarding potential protectionist measures from Joe Biden’s successor. While the new president expressed a commitment to prioritizing America, specific details about new tariffs were not clarified on his first day back in office.
This context has led to a decline in the dollar against the euro, with the single currency rising towards 1.0370. Asian markets showed positive trends on Tuesday, with the Nikkei index of the Tokyo Stock Exchange gaining 0.3%.
Bruno Lamoral, a portfolio manager at DPAM, noted that equity investors are optimistic, as promised tax cuts and deregulation policies are likely to enhance corporate profits. Analysts suggest that the Paris stock exchange could benefit from the excitement surrounding Trump’s return to the Oval Office.
Christopher Dembik, an investment strategy advisor at Pictet AM, recalled the high volatility and significant increase in the S&P 500 during Trump’s first presidency. He emphasized that the new administration aims to bolster its dominance in AI, particularly by ensuring affordable and continuous energy access, which could positively impact technology stocks.
However, the unpredictability of the new president may lead to increased market volatility, especially in the early days of his administration. Historically, January is a favorable month for stocks, often referred to as the ‘January effect,’ where traders initiate their first buying positions of the year. The CAC 40 is following this trend in 2025, currently showing an increase of nearly 4.8% since the beginning of January.
On the macroeconomic front, market participants will be looking out for the ZEW index of investor confidence in Germany, which is expected to provide insights into economic sentiment ahead of the anticipated elections in February.
With American markets closed, the bond market remains relatively stable, leading to a slight decrease in the yield on the ten-year German Bund, which is now around 2.50%. Meanwhile, the yield on the OAT of the same maturity has dipped below the 3.30% mark.
In the oil market, there is some profit-taking occurring with the Brent barrel after reaching a recent peak of over $80. West Texas Intermediate (WTI) crude is down 0.8% to $77.20.