The Paris Stock Exchange is optimistic as it starts the week, with CAC index futures rising to 7295 points. Despite a 0.3% weekly decline, investors hope for a recovery during the quieter trading period ahead of Thanksgiving. Key economic indicators, including eurozone inflation data and Germany’s Ifo index, are anticipated. In the U.S., GDP estimates and PCE inflation figures will be closely monitored, while ‘Black Friday’ will reveal consumer spending trends as the holiday season approaches.
Positive Outlook for the Paris Stock Exchange
The Paris Stock Exchange is set to begin the week on an optimistic note this Monday morning, as traders anticipate a relatively quiet market due to the upcoming American Thanksgiving holiday.
As of 8:15 AM, futures for the CAC index are showing a promising rise to 7295 points, reflecting an increase of 29 points. This suggests a continuation of the modest rebound that initiated in the past few sessions.
Market Trends and Economic Indicators
On Friday, the Paris market closed up by 0.6% at 7255 points; however, it still faced a weekly decline of 0.3%, marking the fifth consecutive week of downturns.
With American stock markets closing on Thursday and only partially reopening on Friday, the trading week will be shorter in the U.S. This time of year typically sees decreased trading volumes, which tends to prolong the trends established in prior weeks.
European investors are hopeful that the quieter week in New York might present a chance to recover from the underperformance compared to the U.S. markets over recent months. Notably, the S&P 500 index has significantly outpaced the Euro STOXX 50 this year.
Market participants have shown limited reaction to the recent escalation of tensions surrounding the Ukrainian conflict but remain vigilant for any economic developments within Europe. The upcoming inflation data for the eurozone in November is particularly crucial, as it is expected to affirm that a return to the European Central Bank’s 2% inflation target is nearing.
Alexandre Hezez, a strategist at the Richelieu group, notes, “The ECB will have no option but to adopt a more accommodating stance to address the cyclical inflation challenges that will normalize inflation.” More aggressive rate cuts than anticipated could weaken the euro, which recently hit two-year lows against the dollar, while potentially boosting European export values.
The Ifo business climate index for Germany, set to be released this morning, is expected to reflect the challenging conditions facing Europe’s largest economy, further contributing to the underperformance of European stocks.
On Wall Street, investors will focus on the second estimate of the U.S. GDP for the third quarter, initially reported at 2.8%, which will be announced on Wednesday, ahead of the Thanksgiving weekend. Additionally, they will look for the PCE inflation figures on Thursday, a key indicator for the Federal Reserve.
These inflation figures, along with the anticipated minutes from the Federal Reserve’s last monetary policy meeting on Tuesday, could play a pivotal role in shaping expectations for a potential rate cut in December.
Lastly, the retail sector is poised to capture investor interest on Friday during ‘Black Friday,’ a significant shopping event that will provide insights into consumer spending as the vital holiday season approaches. Companies like Dell, HP, Autodesk, Best Buy, and Abercrombie & Fitch are also set to release their quarterly earnings on Tuesday, adding to the week’s financial landscape.